There’s no getting around the fact that divorce is painful. Add trying to figure out what to do with your biggest marital asset: the family home, to that and the stress starts to skyrocket.
But we probably don’t have to tell you.
Besides what’s at stake financially, the family home has sentimental value, so there are a lot of emotions at play.
And it’s easy for those emotions to cloud your judgement.
But it’s best to stay calm and consider things carefully. That way, you’ll be better equipped to settle it among yourselves rather than having it settled for you in court.
If you’re grappling with what to do with the house in a divorce, here are four steps to help you decide:
- Look at Your Finances
If one of you is thinking about staying in the home and buying the other out, it’s a good idea for that person to take a careful look at their finances.
Owning a home typically takes two incomes. Even if the person who wants the home has a significantly higher income than the other, they will still need to think about whether or not they can realistically afford to take on mortgage payments, taxes, property insurance, maintenance, and any repairs the home might need.
- Consider Capital Gains Tax
Since selling a home while married will allow up to $500,000 in profit to be excluded from federal capital gains taxes (versus about half that if you’re single), there is a major financial incentive to sell the house before you divorce. Granted, you must have lived in the home for two of the last five years to be eligible.
- Think About Your Kids
If you have kids, you may want to continue to co-own the property, at least for a little while. The court may also order a deferred sale, which means that you will have to postpone selling your home so as not to uproot your children during an already tumultuous time.
Trying to reduce the impact your divorce will have on your children is important, which is why you’ll also need to consider whether continuing to own the home together might ultimately just expose your kids to more unsightly squabbles.
- Assess Repairs
If the home has a lot of repairs that are needed it may make it less financially feasible for one person to take on the mortgage by themselves.
The amount of repairs your home needs is also an important factor in determining the home’s value. If your home is in need of large repairs like roof replacement or is generally outdated, selling it the traditional way could get really expensive.
You can either hold off on selling the home or you can sell it to a professional home buyer. They will purchase the home for cash as-is. And they can close as fast as seven days, making it a quick and clean break.
Want to learn more about how selling your home during divorce for cash works? Click here or fill out the form below.