Selling A Home During A Divorce

There’s no compass at the end of a marriage. Going through a divorce means divvying up a lot of shared things.  Who will keep the furniture? Who gets the car? Where will the dog live? And the biggest question of all:

Who gets to keep the house?  

Typically, a couple’s most significant asset is the home. Proper handling of a joint mortgage is imperative to ensuring a peaceful parting of ways without the financial burden of unfinished business.

What if one person wants to keep the home?

Let’s say your spouse wants to continue living in the home. The title of the mortgage should be changed to reflect that decision. This means you can walk away without further obligation or responsibility to making future payments. It might sound obvious but the key is to take your name with you before walking away. Failure to do so is a common, and often disastrous, mistake.

After all, what if the spouse that stays fails to make payments? The risk of being associated with that delinquency is not in your best interest. You may have married the most trustworthy person on the planet, but there are no guarantees. It may be hard, but “assuming the worst” is a safe play for your financial future. Put everything in writing and avoid verbal agreements that won’t hold up if things get messy. Be firm about removing yourself from the deed if your spouse wants to keep the home. Don’t make concessions.

A mortgage lender will hold you both accountable for money owed. When you file for divorce, you are both bound by a court-issued restraining order preventing transfer of the property. This prevents one spouse from selling the home on their own even if the deed is solely in their name. Although temporary, this restriction remains until the divorce is final. Getting permission from a judge would be necessary if one was to attempt this kind of transaction.

Divorce, not to mention disaster, disability, or death – are hard enough to deal with on their own. But someone has to pay the bills, regardless of the circumstances. The person keeping the home will need to refinance solely based on their income and assets. Until ownership is established in their name, the other person, still tied to the mortgage may be ineligible to qualify for another on their own. Or, finding a place to rent.  Landlords can disqualify anyone they think won’t have enough to cover monthly dues.

Selling your home is a good idea

If one person can’t afford the mortgage, or “buy out” the other person, selling the home is almost always in the best interest for both parties. For property with equity, selling and splitting the profit in half is a clear-cut, fair solution. Some couples are just so desperate to move out and move on and they have options for selling fast in order to do so.

Selling is an emotional and heartbreaking decision, especially if you both spent many years there, or raised a family under its roof.  It might be the last decision you make together. It may also be the most important. Otherwise, the property will become paperwork for a judge and may mean spending many hours in court.

Amass copies of all tax returns, bank statements, utility, insurance and all other financial documents related to the history of ownership. Are there any judgments or liens against the house? Once you decide to sell, this information will be important to have on hand, no matter how you go about selling your Boise home.

Should you sell your home with the help of an agent?

Working with a realtor during divorce has pros and cons. Many assume that working with a real estate agent ensures getting market value return for the investment and that once the deal is done, they can end up in good financial shape. In reality, the deal often takes much longer than anticipated to get done. Some home remains unsold for months of years during which the estranged couple must continue making payments on the mortgage. Often, the home ends up selling for less than asking price, cutting into an already hefty subtraction of profit that must be set aside for closing costs, escrow fees, agent commissions and other expenses as part of a traditional home sale.

Hiring an agent may not guarantee a quick and profitable sale but it may be the right move for more embittered spouses who can’t make decisions together. Selling a home is a business deal. If the market is promising and you are both committed to selling to traditional buyers, having an intermediary may be the only way to do so without letting emotions get in the way. Some agents specialize in divorce real estate and can act as the voice of reason during the process.

What if the house won’t sell?

In a perfect world, the house sells quickly. In reality, listing and selling to conventional buyers requires patience and backup plans. If you cannot sell the property during the divorce, there are alternatives.

Renting the home is an opportunity to earn money while the house remains on the market. Rent it out on a month-to-month basis to avoid intimidating potential buyers who are not looking for tenants as part of the deal. If the prospect of selling is particularly dim, you unlist the property, offer a year-long lease to renters, and wait for more favorable market conditions meanwhile collecting rent payments equal to, or as close as possible to, the amount owed for monthly mortgage payments. Keep in mind that managing a rental will be a shared obligation and playing landlord can be a severe hindrance to moving on.

What is the fastest way to sell a home during divorce?

Cash buyers can take the property out of your names and off your hands fast. Working with professional cash investors spares couples going through divorce the hassles of selling in unpredictable market conditions. There’s no telling how quickly (if at all) a home will sell. If your top priority is to rid yourselves of the shared home cash buyers will come up with an offer and close the deal in a matter of weeks or days. This method also relieves you from the duties of cleaning, repairing, staging and showing the home for sale.

Don’t let the home stand between you and your new lives. Whether your anticipate a divorce or are going through one, selling the house you shared is a major decision. If you need to sell your house fast, we can help!

 

We pay cash for Boise homes giving you the freedom and peace of mind to move on.  Contact us today to discuss your options.

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