In divorce, the marital residence is usually one of the most valuable assets. It’s also the one that frequently causes the most problems. For example, who gets to live in it? Who pays the mortgage? Who pays for the upkeep?
Unless one of the parties is going to retain the home in the divorce, its usually best to sell it quickly and professionally. If you’re involved in a divorce, Kevin Handy of SnapDivorce LLC, a Divorce Mediator in Montgomery County, PA has ten tips for you to ensure that the sales process goes as smoothly as possible and you get the most money out of your home.
1. Hire A Full-Time Professional Realtor With Experience Selling Homes In Divorce
Selling your home in a divorce comes with complications that do not arise in a normal home sale. Now is not the time to have your friend or cousin who dabbles in real estate sell your home. Choose a full-time professional realtor who has experience selling homes in a divorce. The realtor will more than pay for themselves with the increased price you get for the home and reduced levels of stress. Choose a realtor that neither spouse has a pre-existing relationship with so that no one feels that the realtor is playing favorites.
2. Get Your Divorce Mediator Or Divorce Attorney Involved Early
Don’t wait to hire a divorce mediator or divorce attorney if you are selling your house. They will be able to help identify and resolve potential issues that may arise during the process, such as unexpected liens or what to do with the proceeds from the sale pending finalization of your divorce. You mediator or attorney should also be able to provide you with a list of recommended realtors in your area who have experience selling homes in divorce.
3. Go For A Quick Sale
Work with your realtor to come up with a reasonable price for your home so that it will sell quickly. It’s not worth trying to get top dollar if it means you have to deal with an estranged spouse for an extended period of time. The sooner you sell, the sooner you have one less thing tying you together. Also, once you have begun the divorce process the upkeep of your home becomes a drain on resources. Selling your home quickly may not always be possible if you have a commitment that requires you to stay in the home, such as when moving would require you to pull your children out of school.
4. Try To Agree On Necessary Repairs
Follow your realtor’s recommendation with regard to repairs. Try to agree how to pay for the them. It’s usually best to split the cost evenly. If that isn’t possible, and one spouse pays for them, that person should be reimbursed “off the top” from the proceeds of the sale at closing before the balance is divided or escrowed.
5. Stage Your Home
Work with your realtor to ensure that the home is properly staged. Buyers who think that the home is being sold due to a divorce are more likely to come in with a lowball offer. Have some personal items, including clothing, from each spouse in the house for the showings, or make sure all personal items are removed. Nothing screams “divorce” more than an empty closet for only one spouse.
6. If You Haven’t Agreed How the Proceeds Will Be Divided, Have Your Mediator Or Attorney Establish An Escrow Account
If you haven’t agreed how to divide the proceeds from the sale of your home, then you will need to set up an escrow account to hold the funds until an agreement is reached or the divorce is finalized. Its best to do this as soon as possible -- before your house sells. Your divorce mediator or attorney can assist you in setting up an escrow account.
7. Consider Advancing A Portion Of The Proceeds To Each Spouse Before Escrow
If one or both of you are in need of funds, consider a partial advance of funds to each party against equitable distribution before placing the funds into escrow. A typical advance is $5,000-$10,000 to each party. Those advances will be accounted for later at equitable distribution.
8. Perform A Title Search
Before listing your house for sale, perform a title search to make sure there are not any unexpected liens on the home. Unusual liens frequently come up in divorce, for example from unpaid attorney’s fees. If any such liens are discovered, tell your divorce mediator or attorney right away. They will be able to help you come up with a plan of action to best deal with them.
9. Decide How To Divide Reimbursements
One frequently overlooked item is reimbursements you may receive when you sell your house. These may include things such as pre-paid homeowner’s or flood insurance. Normally the spouse who paid for those expenses will receive a check reimbursing them for the unused portion. You and your spouse should discuss how these reimbursements will be split. It often makes sense to divide them in the same manner as you divide the proceeds from the sale.
10. Agree How House Expenses Will Be Paid Pending Sale
While the home is on the market, everyday expenses such as mortgage payments, water, electricity, and heat will continue to accrue. Talk with your spouse to determine how these expenses will get paid. If only one spouse is still living in the home, typically that party is responsible for paying the expenses. That may not be possible in all situations. If the spouse not living in the home pays the expenses, you may want to discuss a reimbursement of those costs from the proceeds of the sale.