When selling a house during a divorce, separating couples should have a good idea of what the process entails. That includes understanding the tax implications, hiring an agent experienced in divorce, and not moving out of the house too soon to save on costs and make the home more attractive to potential buyers. Although selling a home may be the right option for divorcing couples, they need to do some research and prepare adequately for the endeavor to get the best outcome and ensure a smooth transaction.

Considering the Tax Ramifications

The capital gains tax implications are a critical financial aspect that couples should consider. The tax rate could be as much as 23.8%, making it well worth it to look for ways to reduce it. For a married couple selling a home, up to $500,000 can be exempted from capital gains taxes. The tax exemption drops to $250,000 for a single person. Therefore, selling after divorce could result in a couple losing the $250,000 of the exemption.

Couples should try to structure their home sale and divorce such that they avoid losing that exemption. Therefore, it is beneficial for homeowners to consult with a tax professional before proceeding with the sale or divorce.

Living in the House During the Divorce

When both spouses move out of the family home they are selling during a divorce, they usually take their belongings with them. That leaves behind an empty home that is less attractive to potential buyers. They could stage the house to make it more appealing. However, staging is usually costly.

Having one or both spouses living in the home before it sells results in some nice furniture, accessories, and fixtures being kept. That helps reduce expenses. It also keeps monthly expenses in check. Considering the costs of divorce, having three monthly housing payments due to both spouses moving out before the house sells is usually unsustainable.

Hiring an Agent Experienced in Divorce

Going through a divorce presents a unique set of challenges. The separating couple may have communication issues, anger, fear, and mistrust. Therefore, it is essential for separating couples to hire an agent experienced in selling houses during divorces. The agent should be someone who both spouses trust.

An agent experienced in divorce will know the importance of representing both spouses equally as well as being diplomatic during emotionally charged situations and replicating communications to spouses so that none of them feels alienated.

Agreeing on Price

When divorcing couples let the emotional side of the divorce get the better of them, they could negatively affect the home sale. Disagreements and fighting could stop a closing even at the very last minute. Regardless of how high emotions could run, spouses should stay focused on the prize.

Couples should discuss their asking price with their agent and agree on the lowest offer they are ready to accept. They should also discuss important details like:

  • Pricing strategy
  • Each spouse‚Äôs responsibility concerning the home sale
  • Services to hire out
  • How to pay for costs
  • Off-limit times for appointments
  • How much notice each spouse requires for the closing date

Following the tips above will significantly increase the chances of divorcing couples having a timely and profitable home sale.