Divorce and selling your home? What you need to know!
If neither spouse wants to stay in the family home, or if neither can afford the home on their own one party may choose to buy the other party out. The obvious solution is to put the property on the market and try to get the best value for it. Keep in mind that before the sales proceeds can be divided, you will have to pay off the mortgage, and equity line or second mortgage, as well as the brokers’ fees. These expenses are one disadvantage of selling, especially if market conditions aren’t good for sellers, but as we re-enter the traditional real estate market…prices are climbing once more.
Another disadvantage is the need to uproot the kids when they’re already adjusting to a lot of change. But there are advantages, too. Both spouses get money from the sale to start over, and it may help you make a clean break.
Once you’ve decided to sell, you will be faced with a lengthy and detailed process that involves a number of projects, and each of these projects takes hard work in the best of times, and the emotional upheaval that comes with divorce doesn’t make them any easier, so having the right real estate agent on your side will surely make the process much more manageable.
Picking your agent:
The easiest way to determine if you can afford to sell your home, is to have a real estate professional complete a ‘Market Evaluation’. While in general, it’s sometimes common to try and sell your home without an agent, it’s not recommended when you’re in the middle of a divorce. The added stress is really not necessary. Try not to spend a lot of time arguing about who your real estate agent will be, although understand the importance of working with an experienced Realtor who has been in this arena before.
Scott Cary is a real estate Broker with RE/MAX and as a seasoned veteran of more than 25 years, he has represented his fair share of ‘divorce sales’. He states; “It’s vital that I meet with both spouses (many times separately) and listen to their concerns. I can’t assume that they both will be on in agreement when an offer comes in, so I need to make certain that I am representing them both as one party with both their interests in mind.”
Scott continues to explain, “If I am not able to gain trust from both spouses, it will make the process very frustrating for everyone involved. Many times I don’t see good communication between the spouses at this juncture, so I make sure to include both parties in all communications.” A divorce sale is much more delicate than a standard sale, and not all agents are able to handle the added pressure or want to get in the middle of a divorce sale, so be sure to ask the right questions when interviewing you agent.
Settling on an asking price:
Take the agent’s advice about your asking price. That’s one of the main reasons you are using an expert instead of selling your house yourself. Turning that decision over to the agent (with the review of local comparable sales) will eliminate one potential conflict. If you think the agent’s opinion is really off-base, you might need a second opinion (or a reality check of your own.) The market evaluation discussed previously will document past sales and other comparable properties that should justify the current market trends and a more accurate home value.
Preparing to show your house:
Getting the house ready to show can be the most difficult part of the sale process. There’s often some work that needs to be done – minor repairs, painting, landscaping and more – before the house is ready to be shown, so you need to agree on where the money for that will come from. If both of you have moved out by the time you put the house on the market, you can leave the house staged for the agent. If one of you is still living there, you’ll need to get things cleaned up, get the clutter out of the way, and probably remove some of the furniture.
If this work falls mostly on one person, you may need to figure out a way to compensate the other party for the extra effort. If repairs are needed, Scott recommends having the work completed by professionals where the costs can be repaid upon closing the property.
You will have to work together when it comes time to review offers from potential buyers, especially if you live in a place where the real estate market is so volatile. Your agent can advise you of course, but ultimately you will have to make the decision jointly. Again, in some situations the agent will meet separately. This can be a challenge and somewhat time consuming so be sure to discuss the possibilities when hiring an agent.
Dividing the cash:
Finally, you will have to figure out how to divide proceeds. In general, that shouldn’t be to complex – the escrow company can distribute the money, after paying off all the obligations on the house and make whatever other payments you both have agreed to. If an attorney is involved they may have written instructions to follow.
Knowing that there are rarely two divorces alike, it’s never considered easy. If you have a house to sell, it cost you nothing to get the advise from a licensed real estate professional. Scott Cary can help and as available for a no obligation consultation.