Should You Sell Your Home During Your Divorce?

September 20, 2019

Divorce is a hard process for anyone. You’ve built an entire life with someone and now you must face the daunting task of change. The amount of different emotions swirling in your head can be baffling. There are so many decisions you’ll have to make. Many of them will involve talking to a person that you have a hard time being around.

Then, to make a difficult situation harder, you’ll have people approaching you with unsolicited advice. You’ll have businesses beating down your door to take advantage of your situation. It would be a lot for anyone to bear.

At First Fidelity, we hope that we can help a little bit by sharing our knowledge with you. As real estate experts in the Houston area, we hope to help you answer the very important question:

WHAT SHOULD WE DO ABOUT THE HOUSE?

Disclaimer: I am not a lawyer or a realtor. I recommend you consult a professional for the final say on what to do with your house.

Sell vs. Keep

When deciding what to do with your home, you’ll have two options:

Sell the home and split the money with your spouse
One spouse buys out the other, and continues to live in the home

1. Sell the Home

If you and your spouse decide to sell, you will be taking a big step in putting the past behind you. The home that you have built together might have some painful memories associated with it after the divorce. Both spouses could use the equity from the home for a deposit on their new home.

If you sell the home, you could sell before or after the divorce. There are certain benefits to selling before, such as a larger tax cut. You also won’t have to settle splitting the home inside the divorce court. It might be easier for both of you to split the equity in the home without legal involvement. Not having it as an asset can mean that you can settle the money made from the home without a judge involved.

There are some major negatives to selling the home. You will have an emotional attachment to the home and for many that will be hard to give up. Uprooting a life is never easy and settling into a new living space can be difficult. You both might end up “couch surfing” until a new permanent residence can be found.

If you have children, the huge amount of change will be a lot for them. To lose the home where they feel the most comfortable is a major worry for many parents.

2. Keep the Home

One or both of you might be really determined to keep the house. This can make the transition easier for some. They would get to stay in the home with their children, a setting that will feel familiar in a world of change.

One of the biggest mistakes people make when they decide to keep their house is overestimating their ability to pay the mortgage on their income alone. Transferring the title or refinancing the home can involve a lot of unexpected fees. It’s possible that you will still have to hire a realtor to handle the paperwork. You will also have to pay your ex for their half of the equity. When people buy out their share of the spouse’s home, it can cause mortgage payments to go up. The house can sometimes cost you more than a traditional buyer.

Make sure that you talk to a real estate professional about what your new payments will be before you make the decision to keep the house. It’s never a bad idea to do your research before hand to make sure that the decision is right for you.

Need help with splitting your assets? Check out this great article for 8 Ideas On Dividing Property

What We Can Do To Help

At First Fidelity, we pride ourselves on putting people before profits. We understand that selling to an investor isn’t for everyone. We want to help you, even if that means referring you to another business. Everyone’s situation is unique, and we want you to take the best route for you.

We are here to make the transition easier. If you decide to sell your home, please contact us with any questions or concerns you may have.