Do you need to sell your house when getting a divorce?
When two people get married and form a household together, the last thing on their minds is getting divorced. But it can, and does, happen. Even with the best intentions starting out, statistics show that between 40% and 50% of marriages end in divorce.
Despite the sadness and anger that often accompany divorce, the financial aspects of separation should not be underestimated. Money, assets, and debt need to be divided. And in the case that one spouse was more dependent on the other for their financial well-being, or if there are children from the marriage, things can become even more difficult when determining the right amount of spousal support or child support.
A House is Often the Largest Asset in a Marriage
In this article, we will focus on what happens to the house in the case of a divorce. Just because of the $$$ value of real estate, a house or an apartment is often the priciest asset that most married couples own. At the time of divorce, assets must be equitably divided. How this is done will depend on whether you can come to a mutually acceptable agreement or if you need the help of lawyers or a mediator to make that decision. Regardless of how the division of assets is agreed upon, there are four main options for what can happen to the house:
- Dividing the assets – each party gets specific assets. For example, one party gets ownership of the house, and the other gets other assets like the stock portfolio or the retirement accounts.
- Buying out the other party – one party gets ownership of the house by paying the other party out their share of the value of the home.
- Co-owning – the parties continue to own the house, with either a tenant or one of the parties living in the house and paying an agreed rent.
- Selling the house and splitting the proceeds.
A House is Not a Liquid Asset
Three of the four options for what can be done with the house in a divorce, involve changing the ownership of the home. A house is not liquid like a bank account where each party can simply take a check for their share of the money. To turn the house into a liquid asset, it needs to be sold to turn it into cash. Alternatively, one party must be compensated with equivalent assets.
Dividing the assets will only be equitable when there are sufficient assets in the marriage to compensate one party for their half of the value of the home. A solution where one party buys out the other is only possible when that party has sufficient cash or can qualify for a mortgage on their own. Continuing to co-own the property can be difficult, particularly if the former couple can’t resolve disputes amicably.
When Selling the House is the Best Option
Sometimes, selling the house is the best option. This is also true in cases where the couple shares a lot of debt that needs to be paid off, or if neither party has the financial means to compensate the other party. In its simplest form, the divorcing couple will sell the house and divide the proceeds from the sale equally (or another agreed proportion) after paying off all debt.
If only it were that simple. Selling a house requires a large number of decisions to be made, and, considering that there is likely conflict, and perhaps a break-down of trust, in the relationship, the process can be difficult. For example, you both have to agree on making repairs to the home before selling it, which real estate agent to hire, how to split the sales and marketing costs, setting a reasonable sale price, making mortgage payments until the house sells, and paying the real estate agent’s commission and closing costs when the house sells.
Selling your home as a divorcing couple can be a minefield. Having a lawyer or another third party manage the sale for you can also be expensive.
How to Ensure a Fast and Problem-Free Sale.
If you do need to sell a house due to a divorce, and if you and your soon-to-be-ex-spouse anticipate having trouble during the process, but you can’t afford an expensive lawyer or mediator, selling to a cash house buyer company like Zvestors might be a great option.
Zvestors will make you a no-obligation cash offer to buy your house. We buy houses in an as-is condition, so you don’t have to do expensive repairs or renovations to attract a buyer. There is no real estate agent commission, and most transfer and closing costs are covered. Best of all, the sale can be finalized in days rather than months. You get cash in your pocket, and you can both walk away from conflict to start your new life.