Keys to selling a home when going separate ways

In the best of circumstances, divorce and separation are a massive life change, emotionally complex, and financially stressful. If this also requires selling a home, it can be overwhelming. Having the right plan and the right team to assist in the process will make a huge difference to your desired outcomes.

Do you need to sell?

Selling isn’t always the only option. If one spouse prefers to keep the property, they may “buy out” the other from their equity in the home. If that is an option, both parties would want a neutral appraisal, a clear understanding of what’s owed on the property and a timeline. The “buying” spouse may need to refinance the house to have the cash to buy out the selling spouse. Once the numbers are set and the spouse getting bought out receives the proceeds and is removed from the mortgage, the deed is transferred to the spouse who is keeping the home.

If neither party is willing and able to do a buy out, spouses could agree to hold the property until a specified date, for example when kids complete middle school or high school, or a tenant moves out. That requires being financially tied to one another well beyond the end of the relationship, and a detailed document of how equity will be apportioned during the delay, who covers each cost, repairs, maintenance, upkeep, etc. Any lapses in payments can also affect the credit of both people.

If a buyout isn’t feasible, keeping the house is undesirable or a court has ordered it, selling the property becomes a necessity. Having a great agent and a clear plan is essential to avoiding protracted disagreements, delays and accomplishing your goals.

How to sell when going separate ways

To sell a jointly owned property during an emotionally challenging time requires cooperation and assistance.

Before you sell, a number of things have to be decided. 

• Occupancy - who will live in the home during the time of sale. How will they handle showing requests?
• Expenses - how will the mortgage, utilities, HOA, taxes and insurance be paid and by whom?
• Repairs and improvements - if updates or repairs have to be made before selling, who will pay and how will the expenses be allocated?
• How will decisions be made?
• Division of proceeds - if not court ordered, having a written agreement on how proceeds will be split is essential.

Other decisions you’ll want your real estate agent's expertise to guide.

• Pricing strategy - good agents will help you set a price based on the market conditions. A great agent can help you price to accomplish your goals in light of the current market.
• Timing - there are significant tax benefits to selling before a divorce is finalized, and usually both parties want the sale completed when the divorce is final. So when to list is also important. Often neither party can buy a new home until the sale is finalized, so speed is helpful.
• Staging advice - how to de-personalize the house so buyers are unaware of the nature of the sale.

Choosing the right representation can make or break the selling experience when divorcing or separating. How do you choose the right agent? Separating couples have found these things to be most helpful.

• Expertise in the local market is important for getting the most money for the home in the shortest time with least hassle.
• Experience working with divorcing couples is beneficial for a smooth transaction.
• A process designed to keep you on track and focused on the sale is essential.
• Communication systems in place to be sure all communication is open, uniform, and professional. Data driven decisions help depersonalize the outcome.
• Both parties need to be represented, not just one. So an impartial third party committed to both parties is key.
• Professionalism is required to de-escalate, build concensus, find creative solutions and build trust.

The 919 Realty group has the expertise, experience and knowledge to help any couple who can make joint decisions sell a property and accomplish their goals. We even have a specific agreement we sign with separated couples to clarify the process, expectations and our approach to make the sale of the property as simple as possible.

If you’d like a detailed list of the decisions that need to be made before and during a sale, or you want to discuss the process, send us a note here and we'd be glad to provide resources and help you think through your goals.