Selling the House During a Divorce: How to Keep It Drama Free

by Dorota Gasienica-Kozak

A couple’s family home is usually their most significant financial investment and an object of great sentimental value, so a family dwelling can be a hot-button issue when couples decide to divorce.

In many divorces, selling the home makes the most financial sense. However, when two people do not see eye to eye, a home sale can become complicated and fraught with tension for both buyer and seller.

Below, we explain what you need to know when buying a home from a divorcing couple and outline some steps divorcing spouses can take to make the process go as smoothly as possible.

Select a realtor and determine the sale price: Retaining a professional, unbiased realtor is in both parties best interests. If you and your spouse can agree, you should interview agents together and choose one to list your home. If not, consider using an agent recommended by your attorney,  friends, or neighbors you both trust.

Similarly, agreeing on a sale price may be a point of contention. One spouse may want to sell a home quickly, while the other is prepared to wait for a better offer. Both parties should defer to the realtor’s professional advice or, if needed, the advice of a neutral appraiser. Additionally, your divorce attorney will assist in evaluating your assets and the home appraisal process to ensure the property is listed at fair market value.

Decide who will live in the home during the divorce: It is not unusual for one spouse to live in the family home while it is listed for sale. This spouse typically keeps the house ready and available for showings. If that is not possible, the couple should consider hiring a housekeeping or lawn service to ensure the best showings. If the house is empty, the couple should discuss whether the home should be staged and who will pay for those costs as part of the divorce.

Decide who should cover costs for repairs to prepare the house for market. For example, the house may need minor work, such as a fresh coat of paint and new carpeting, or more significant repairs. Again, a realtor can advise what repairs are necessary and most likely result in better offers. The divorce attorney will assist in tracking such costs for payment and reimbursement in the divorce.

The couple should also decide who will pay the mortgage, home-owners insurance, and property taxes while the house is on the market and who will pay for unexpected expenses such as a leaky pipe or broken dishwasher. The couple may decide that the spouse who foots the bill for repairs, the mortgage, or other costs will be reimbursed by receiving a larger share of the proceeds after the house sells. Your divorce attorney will assist you in coming up with a fair and equitable arrangement and draft the necessary documents to secure the sale.

Decide what to do with the house sale proceeds: Once the sale has been finalized, both parties should settle all costs before divvying the profits. Many of these expenses will be taken care of at the closing. Standard costs include paying off the mortgage and any equity lines of credit, paying liens for unpaid property taxes, and paying closing costs. If a property settlement has yet to be reached, it is best to hold the proceeds in escrow until the agreement to safeguard equitable division and distribution of the marital estate.

It is essential to know that Pennsylvania is an “equitable distribution” state. That means that if a couple cannot agree on how their assets should be divided and distributed, the court will step in to divide the property fairly. For the record, “equitable” does not necessarily mean a 50/50 split. The court will consider other factors, such as how long the couple has been married and the income and property of each spouse at the time of marriage and divorce. It is usually best for both parties to reach a mutual agreement about the division of assets instead of leaving it up to the court.

The best advice is for both spouses to be flexible and cooperative throughout the home sale process. Keep the disputes out of the sale process. Leave the disputes to the divorce attorneys. After all, it’s in your best interests to sell your home as quickly as possible. Consult with your attorney if problems arise. They are experts in this area and can provide helpful advice during this stressful time and save the deal.

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