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Why Should You Sell Your Home in Divorce?

When going through a divorce one of the first things that may come to mind is whether or not you should sell the marital home. Divorce and selling a home or other real estate are probably two of the most stressful life events.

Going through both at the same time can be ten times worse. Questions of homeownership can become complicated to deal with when you are facing a divorce.

For many couples, their home is the greatest asset they have, and it usually holds a fair amount of sentimental value as well. As much as one or the other may want to keep the home, though, many times, the situation demands getting rid of it.

This can be due to financial, legal, or personal reasons, but in the end, they must unload the home.

Knowing how divorce affects the sale of a home, including reasons to sell, is essential. As emotionally trying as the divorce is, a wrong move concerning a home can come back to haunt you for many years – long after the divorce is said and done.

There are usually one of three scenarios that take place for most couples who go through a divorce:

  • One of the spouses buys out the other legal interest and keeps the home.
  • One spouse keeps use and occupancy of the home for a specified period, which is typically when the youngest child turns eighteen at which time the house can be sold.
  • The house is sold immediately, and the equity, if there is any, is split up in some fashion.

Selling a home and getting divorced is a tricky business that should be thought through thoroughly!

Legal Reasons For Selling a Home in Divorce

Some divorces involve two people who can deal peaceably and reasonably with one another. If this is the case in your divorce, you can discuss the best options for your situation and act accordingly. However, in many cases, the division of property and specifically the division of the family home is not cut and dry.

Each of you contributed to the purchase of the home – even if one did so more than the other – and each wants his or her fair share. If you cannot agree out of court, either on your own or through mediation with your attorneys, the courts will decide for you. This is not a pleasant experience for most homeowners, though, as the judge rarely decides precisely as either party would like.

This is why it is always advisable to agree beforehand, if possible. Many times the most straightforward solution is to sell the home. When the family home is sold, the division of assets becomes more comfortable because you are not trying to figure out the future value of the house. You can get current assessments of value from an appraiser or competent local Real Estate agent. Selling a home in a divorce is a tricky business that should be thought through thoroughly.

Financial Consideration For Selling a Home During Divorce

Divorce and Real Estate Tax RamificationsDivorce and selling a home creates some significant financial concerns. Because you were married, there is an excellent chance that your mortgage is based on both of your incomes. Cut that salary in half, and you understand very quickly why the home you managed to buy required both of you to pay for it.

Even if your income is the higher of the two, house payments, insurance, property taxes, and upkeep can all eat away at your finances. For most spouses, this is too much to handle.

One of the critical financial aspects that should be considered is the capital gains tax ramifications. The current capital tax gains law says that if you are married and selling a home, you can exclude up to $500,000 in profit.

If you are single, the capital gains exclusions drop in half to $250,000. To be eligible for this exclusion, you must have lived in your home for two of the last five years. The home must also be your personal residence and can not be an investment property.

This is where it becomes tremendously crucial for both parties to think this through properly. Essentially what this means is that there is an enormous financial incentive to sell the home while you are still legally married.

Selling the marital home will allow up to $500,000 in profit to be excluded from federal capital gains taxes.

Couples can apply for this tax break if they file a joint tax return or if they file separately. When filing separately, each partner can still claim up to $250,000 on their tax return, provided that they again meet the two-out-of-five-years in the home qualification.

If you have owned your property for a significant amount of time, and there has been a substantial equity growth, this can amount to substantial tax savings. If one party chooses to remain in the home but plans on selling sometime in the future, there could be quite a difference in tax savings. This makes selling a home while getting divorced, something that needs to be planned carefully.

Emotional Reasons For Selling a House

Divorce and selling a homeDivorce and selling a home usually go hand in hand because of the psychological issues stemming from keeping the property. You may have built a happy and fulfilling life in your home, including pets and children, and improvements to make it just like you like it.

With the departure of your spouse, though, the once happy home can quickly become unpleasant to live in. Memories of better times – or the bad times – can taint the comfort you once experienced in your house. Some people are just not interested in going through these feelings day in and day out.

This is, in fact, one of the more prominent reasons that one of the parties may decide at some point in the future, that keeping the house was not all that is was cracked up to be.

The emotional factor is also something that people don’t think about enough. There are so many things going through your mind when going through a divorce that often your judgment can become clouded.

Liability Reasons in Divorce

If the first two reasons are not enough, liability is usually enough to seal the deal for divorcing couples. Even if one person wants to keep the house, the other spouse should get very clear on what that will mean. There are multiple ways to keep a property and let one spouse remain in it, but each carries difficulties and risks.

Take over the mortgage – If the spouse who wants the home has enough income, he or she could take over the loan and just make the payments. This requires talking to the lender and refinancing the house – meaning the person must qualify – but some are capable of doing this. If you can accomplish this, it removes the other spouse from the equation altogether – therefore eliminating his or her liability – but not many people have this kind of income.

Of course, you also have to answer the question of how much equity the departing spouse has in the home and either buy them out or set up a payment plan. Unless you are divorcing on the best of terms, this probably means consulting a divorce attorney.

Co-own the home – If you have children and you want to keep them in the same house, you could both stay on the mortgage to create as little disruption as possible. The remaining spouse can make full payments, or you can both agree to a percentage.

This requires a considerable amount of trust, though, because should the remaining spouse fall behind or fail to make the payments, the departing spouse will suffer the same credit issues and mortgage problems.

Win at all costs –  One of the unfortunate things I have experienced in some divorce scenarios is one party desire to “win” at all costs. There have been occasions where one spouse insists on keeping the home even though it is not a prudent financial decision because they see it as winning a significant battle.

In other words, their judgment becomes clouded from going through such a traumatic event which they may not have wanted.

When one party ends up keeping the marital home, for this reason, there are times when later on down the road, they then realize that maybe taking on such a substantial debt and all the expenses that come along with homeownership were not such a good idea.

If you decide to keep the marital home, you REALLY need to make sure you can afford the mortgage payments and all the other expenses that come along with homeownership that you may not be considering.

Lots of couples getting a divorce underestimate what it’s going to cost them to live once the divorce is finalized. One of the things you should be doing when contemplating to keep the home is to develop a comprehensive budget before you lock yourself into a divorce settlement.

Don’t think about keeping the home in a divorce as a “win” if it is going to bury you financially somewhere down the road.

How To Sell Your Home During Divorce

Selling a home during a divorce is much like selling real estate any other time, except that you MUST lay the groundwork beforehand that determines who gets what.

With a real estate agent helping you sell the home for a fair market value should be possible – as long as you follow your agent’s advice. Before this happens, though, you should have decided on how the money from the sale will be divided up.

This decision-making process is best achieved through your attorneys. Let them guide you through the process of deciding equity.

This will involve a thorough examination of the history of your marriage related to the property and consulting one or more real estate appraisers. You need a good idea of what your home is worth as well as the value of any improvements you made to the house.

Once this is decided, bring in a reputable real estate agent – and get your house on the market. Follow his or her advice to a T, and be willing to compromise a little. Selling for a little less than what you might want can get the home off your hands faster and help you both move on with your lives.

The Divorce Realtor You Select Is Important

Bad Realtor Choice DivorceWhen going through a divorce and selling real estate, you are going to want to work with a Realtor that has exceptional communication skills.

Given that there could be two parties that might not be getting along that well anymore, you are going to want to work with someone who understands the nature of divorce and all the emotional baggage that comes with this stressful life event.

The Realtor you choose to work with is going to have a certain level of patience, as all communications could be repeated multiple times.

The Realtor you decide to work with is a process that should be worked on together. As an agent who has worked with numerous divorcing couples, I have found that if one party selects the Realtor, the other feels slighted.

Human nature kicks in, and the natural instinct is to feel that the Realtor is going to play favorites because of an established relationship with one party.

When I am hired to represent a divorcing couple, I want them both to be present for any listing interviews that take place. I want them to understand that I represent both of them equally.

There is no favoritism involved. My number one priority is to sell the home for the most money possible in a reasonable amount of time with the least amount of headaches.

Creating an atmosphere of trust where either party can call me at any time is very important. Getting a divorce is stressful enough as it is. Adding a home sale on top of it can make you feel like your life is totally upside down. Striving to make the home sale process go as smoothly as possible is always one of my goals.

Make sure you are well prepared for this endeavor.

Divorce and selling real estate is something that should be discussed with an attorney, as well as a competent financial adviser.

 
 

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My experience while purchasing my first home was the best experience I've ever experienced. With Lisa's guidance it was a stress free experience. She made sure I was comfortable and understood every step. She gave her opinion from the heart. You can tell she genuinely wanted you to have the home you desired. She is very personable and that's great when you are purchasing a large investment. I am forever grateful of her help. So if you are looking to have a wonderful experience while purchasing or selling any property Lisa Kelly Realtor is the way to go.

 

~ Candace Engram

Candace Engram ????? 18 weeks ago My experience while purchasing my first home was the best experience I've ever experienced. With Lisa's guidance it was a stress free experience. She made sure I was comfortable and understood every step. She gave her opinion from the heart. You can tell she genuinely wanted you to have the home you desired. She is very personable and that's great when you are purchasing a large investment. I am forever grateful of her help. So if you are looking to have a wonderful experience while purchasing or selling any property Lisa Kelly Realtor is the way to go.

 

~ Candace Engram

Greg Raymond ????? 43 weeks ago Finding and buying the right house can be a difficult and daunting process. When my wife and I found our home online, we needed someone local to the property to assist us as we were out of state. Lisa came recommended by a local acquaintance and she was quick to respond to our call. She was collaborative and professional throughout the process, and was attentive to our needs and questions through closing. I would certainly recommend her!

 

~ Greg Raymond

I had such a positive experience working with Lisa. Not only is she a complete professional, but such a compassionate human being. Her knowledge guiding me through the Florida real estate process was so helpful as a first-time Florida homebuyer. She was always prompt and responsive while going above and beyond. She attended all key inspections in person and kept me informed throughout the entire process. If you are looking for a great real estate experience, look no further. Lisa is your gal to get the job done. I will definitely be working with her again in the future.

 

~ DJ Bradley

I had such a positive experience working with Lisa. Not only is she a complete professional, but such a compassionate human being. Her knowledge guiding me through the Florida real estate process was so helpful as a first-time Florida homebuyer. She was always prompt and responsive while going above and beyond. She attended all key inspections in person and kept me informed throughout the entire process. If you are looking for a great real estate experience, look no further. Lisa is your gal to get the job done. I will definitely be working with her again in the future.

 

~ DJ Bradley

We can’t say enough good things about Lisa Kelly! From the moment she stepped through our front door, she demonstrated all the characteristics you want in your realtor: integrity, friendliness, optimism, thorough knowledge of her field, state-of-the-art technical savvy, unflagging energy and sensitivity to all our own needs and feelings. Our house sold in four days and we are certain this success was largely due to Lisa’s skill and hard work. We highly recommend Lisa Kelly to anyone looking for a top notch realtor!

 

~ Tom and Kim Manske

We can’t say enough good things about Lisa Kelly! From the moment she stepped through our front door, she demonstrated all the characteristics you want in your realtor: integrity, friendliness, optimism, thorough knowledge of her field, state-of-the-art technical savvy, unflagging energy and sensitivity to all our own needs and feelings. Our house sold in four days and we are certain this success was largely due to Lisa’s skill and hard work. We highly recommend Lisa Kelly to anyone looking for a top notch realtor!

 

~ Kim Manske

Kim Manske ?????Aug 21, 2020 We can’t say enough good things about Lisa Kelly! From the moment she stepped through our front door, she demonstrated all the characteristics you want in your realtor: integrity, friendliness, optimism, thorough knowledge of her field, state-of-the-art technical savvy, unflagging energy and sensitivity to all our own needs and feelings. Our house sold in four days and we are certain this success was largely due to Lisa’s skill and hard work. We highly recommend Lisa Kelly to anyone looking for a top notch realtor!

 

~ Joanna Grizzard

Sidney Wyland Lisa Kelly was our realtor that helped us with our move from Utah to Lakeland. She is a very good resource for us in Lakeland and helped us buy our new home. We found Lisa on the internet. She has helped us with all the contacts and scheduling to insure all things here went smoothly. The closing on our home was completed on time which was very important as we had are household goods being delivered from two different states. She also continues to be there for us for any referrals or help we may need here locally. I would highly recommend her to anyone buying a home.

 

~ Rick and Sidney Wyland

Just wanted to thank Lisa for a job well done. I worked with Lisa on 2 of our homes this past year. We sold one in June and another late in the year. Everything went smooth and all details were handled in a very professional manor. Thanks again Lisa; nice working with you. Lee Brown

 

~ Lee and Frankie Brown

We had been looking for a new home for about three months. We changed Realtors and began working with Lisa. She showed us a couple of places. We talked about limits on price and location. We looked again on a couple. We did not care for those. She emailed us about a home that was being restored for a flip. We met her at our current home. We liked the location and made an offer which was accepted. She did a great job getting the seller to accept and a wonderful job from there. The closing took about fifteen minutes. We have been very happy from that day on. Patricia and Bill Crabb

 

~ Bill and Patricia Crabb

We had been looking for a new home for about three months. We changed Realtors and began working with Lisa. She showed us a couple of places. We talked about limits on price and location. We looked again on a couple. We did not care for those. She emailed us about a home that was being restored for a flip. We met her at our current home. We liked the location and made an offer which was accepted. She did a great job getting the seller to accept and a wonderful job from there. The closing took about fifteen minutes. We have been very happy from that day on. Patricia and Bill Crabb

 

~ Bill & Patricia Crabb

Just wanted to thank Lisa for a job well done. I worked with Lisa on 2 of our homes this past year. We sold one in June and another late in the year. Everything went smooth and all details were handled in a very professional manor. Thanks again Lisa; nice working with you. Lee Brown

 

~ Lee & Frankie Brown

01/03/2017 - shunter317 Bought a Single Family home in 2016 for approximately $175K in Lakeland, FL. Local knowledge: Process expertise: Responsiveness: Negotiation skills: Lisa is an exceptional agent as she knows real estate law and the local market. She communicates and is extremely responsive to her clients questions and needs. She walked us through a complicated contract. We consider Lisa a new friend.

 

~ What Others Had to say

Highly likely to recommend 08/09/2016 - HappyBuyerNEOH Bought a Single Family home in 2016 for approximately $225K in Lakeland, FL. Local knowledge: Process expertise: Responsiveness: Negotiation skills: I highly recommend Lisa Kelly! She was awesome to work with through the whole process. Her communication and promptness went above and beyond my expectations. Working in the mortgage industry, I see all types of realtors, if you want a genuine, awesome, go getter- she is your girl!

 

~ What Others had to say

Highly likely to recommend 10/27/2014 - jessbparker Bought a Single Family home in 2014 for approximately $75K in Auburndale, FL. Local knowledge: Process expertise: Responsiveness: Negotiation skills: I cannot say enough about Lisa Kelly. She helped my husband and I buy our first home when we had limited funds and difficult circumstances. She is extremely knowledgeable about homes, market, taxes- anything you could want to know. She is also an excellent advocate for her clients during negotiations, which really came in handy when you're a nervous first-time home buyer.Less

 

~ What others had to say

Highly likely to recommend 02/22/2014 - par167 Bought a home in 2014. Local knowledge: Process expertise: Responsiveness: Negotiation skills: Lisa Kelly is the hardest working woman I know! If you are in the market to buy or sell take it from my personal experience she delivers results!In Polk County or anywhere else for that matter you will be hard pressed to ever get better service. Paul Renner.....

 

~ What others had to say

Highly likely to recommend 02/25/2012 - user027478 Bought and sold a Single Family home in 2011 for approximately $275K in Lakeland, FL. Local knowledge: Process expertise: Responsiveness: Negotiation skills: Lisa is the most professional realtor I've ever worked with... she's direct, honest, highly-knowledgable, very responsive and a consummate professional. She played fundamentally important roles in helping us to sell our house in a tough market. She's a hard worker and also gave us great advice and we were able to sell after listing for about 30 days. She then helped us find and close on our dream home. Her persistance and negotiating savvy helped us buy a house that was not a very convential listing. If we'd had an average realtor, we'd have been a lot less successful with both our deals. I'd recommend Lisa to anyone who wants to work with a genuine professional. She could write a book on what it takes to be an outstanding service provider.

 

~ What others had to say

02/09/2012 - Alyson7707 Bought a Single Family home in 2009 for approximately $125K in Bartow, FL. Local knowledge: Process expertise: Responsiveness: Negotiation skills: We absolutely loved our experience with Lisa.. She is incredibly knowledgeable and dedicated to finding the home of your dreams. We couldn't be happier with the home she found us or the time we spent with her--she made the experience exciting and easy. We do not hesitate to recommend her to friends and family and will absolutely work with her in the future. Thanks again Lisa! -Michael & Alyson Elrod

 

~ what others had to say

Highly likely to recommend 02/08/2012 - AimeeWeed Bought a Single Family home in 2010 for approximately $100K in Auburndale, FL. Local knowledge: Process expertise: Responsiveness: Negotiation skills: Lisa was always quick to respond to my questions. I honestly think that my family and I would not be in this wonderful house without her hard work. She is honest, not afraid to give her opinion in a helpful way, and she is very knowledgeable in all aspects of her job.

 

~ what others had to say

Wonderful wonderful experience. Lisa is what I call a dream maker. I had the dream, and she made it a reality.Lisa's hard work, her quick response, her compassion in knowing I was a single mom purchasing my first house, has earned my loyalty in using her as my realtor for life.

 

~ what others had to say

Highly likely to recommend 03/09/2011 - reedswife11 Bought and sold a Single Family home in 2011 for approximately $75K in Lakeland, FL. Local knowledge: Process expertise: Responsiveness: Negotiation skills: This woman is amazing, we have run into every road block imaginable and she has negotiated our problems quickly and effectivly everytime. Always available and Always puts her clients first

 

~ what others had to say

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