Should I Sell My House Before Divorce

Should I Sell My House Before Divorce - Heidi Dinning

Should I Sell My House Before Divorce

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When it comes to separation and divorce, there are often multiple decisions that need to be made that may cause difficulty and stress. One of the biggest and most impactful decisions that is considered and frequently asked about is what to do with your former family home.

Making the decision to sell your home is a big one and of course, every situation is different, so careful consideration of your own personal set of circumstances will be the driver of your decision.

Read on to explore some of the considerations to keep in mind when it comes to deciding whether or not you want to sell your home before finalizing the divorce.

*Please note: A home sale is a personal decision and this blog is meant to inform, not influence your decision in any way, nor is this in any way legal advice. It is simply perspectives and thoughts to consider.

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Advantages of Selling Before a Divorce

Selling your home before your divorce is complete generally sets you up for an easier time, though there are certain exceptions here. It can also help to prepare you better for life after the divorce, by providing you with more money to restart your life and by making it easier to let go of the past.

Ability to Cash in On Home Equity

Divorce is also the beginning of a new life for you, so to speak. In order to thrive in this new life, you will want to be set up well financially. Your share of the home equity can put you a step in the right direction, especially if you have been building equity in this home for many years.

You could choose to spend that money however you see fit. You could use it to put a down payment on a new home, or you could choose to take yourself on a nice vacation after the stress of divorce proceedings.

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Avoid Capital Gains Tax

As we all know, being married is a benefit when it comes to tax time. When selling your home, still being legally married to your spouse can benefit you as well. If you are a married couple, you may be able to exclude a larger amount of home equity from the capital gains tax. Selling before the divorce will allow both you and your ex spouse to avoid paying taxes on your share of the home equity.

Let Go of the Past

Of course, sharing a home can make it more difficult to cope with the big changes that the divorce is bringing your way. It makes it harder to let go of your past life together as a married couple and can even be a source of great emotional turmoil.

Additionally, it may be difficult to get to a place where you can get along and cooperate with your spouse if you are still in a home that is haunted by your unhappy marriage. Your home holds many memories– some pleasant, and some painful– and it may be very healing and a better option for you to cut the cord and begin making new memories in a new place. 

Should I Sell My House Before Divorce - Heidi Dinning

Disadvantages of Selling Before a Divorce

However, before you choose to sell your home, you will need to weigh the disadvantages of selling before your divorce, too. Selling prior to your divorce can throw in a few complications, which you may decide that you want to avoid entirely by waiting. 

May Delay Divorce

If your divorce is fraught with conflict and nuances of disagreements, but you would like it over with as soon as possible, coming to the decision to sell or not sell before you are divorced may not be the best way to go. This is due to the entirely possible instance in which your home sale takes longer than expected, you are not able to buy out your spouse until the house is sold, or your home sits on the market longer than you had planned. This, in turn, will likely delay your divorce and your ability to move on and focus on your divorce recovery.

Many divorces may require the deal to be closed and the home equity check to be cashed before removing forward or finalizing anything. Your best bet here is to assess the market and speak to an expert to estimate how quickly you can expect your home to sell.

Requires Cooperation

Of course, selling your home requires cooperation between you and your spouse. If you are not in a place where that is feasible yet, it may be better to hold off until after the divorce is finalized.

You will need to be able to consult each other on a matter of things while putting your home on the market and during a sale, which you will likely find to be more difficult during a divorce. It can also be tricky to manage if your spouse is still hanging onto the house due to fond memories of the past.

Q1: Is it better to sell my house before or after the divorce?

Generally, it is believed that it is easier to sell the house before you are divorced for several reasons, some being as simple as being able to both move out and have your own space.

Selling your home during a divorce may also lengthen proceedings for one spouse or both. Of course, every situation is different, so in making this decision, you will also want to be sure to take your own individual circumstances into account.

You will want to take the real estate market into consideration to see if it is the best time when selling a house. You don’t want to be disappointed with a lower offer than expected when you try to sell the house.

Q2: Is my husband/wife entitled to half my house?

Matrimonial assets are not necessarily split evenly down the middle in a 50/50 split, and this is true of your home as well. During the divorce settlement, the court does its best to split assets like these in a way that is fair and equal for both parties, which could be a different split depending upon the circumstances.

Remember that you also often have to apply this ratio or breakdown with other expenses. Your real estate agent will explain to you the various cost associated with the sale, things like property taxes, agents costs and closing costs. Your marital home as an asset will also be discussed by your divorce attorney and your real estate agent to make sure everything is properly managed.

Q3: Will I have to sell my house if I divorce?

No, you will not have to sell your home if you divorce. Legally, your spouse cannot force you from the home in order to sell. That being said, the court may be able to make you sell your home, as they have the final say in transferring property from one spouse to another.

The divorce process can be a difficult time, and your primary residence can be a large part of the negotiation and settlement of the divorcing spouses. There are tax implications, real estate agents, house value and other marital assets to consider.

Q4: What happens if I leave the house before divorce?

If you leave your home prior to a divorce, there may be some financial repercussions involved. For instance, your spouse may ask you to pay half of the home expenses. You are legally required to do so, so if your spouse does ask, the court can make you pay these expenses.

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