Nolo's Essential Guide to Divorce - Emily Doskow [108]
Because the house is so valuable and so important, it can be the linchpin of negotiations for a property settlement. Deciding what you're going to do with the house often helps put other property issues into perspective, both financially and emotionally.
There are three common ways to deal with a family home at divorce:
• put it on the market
• agree that one spouse will buy out the other, or
• agree that you'll continue to own the house together.
Here's how each option looks.
Sell
If neither of you wants to-or can afford to-stay in the house, you can put it on the market and try to get the best possible price for it. Keep in mind that before the sales proceeds can be divided, you'll have to pay off the mortgage, any equity line or second mortgage, and the brokers' fees. You'll also have to pay any capital gains tax that might apply. (See "Your House and Capital Gains Tax," below.) These expenses are one disadvantage of selling, especially if market conditions aren't good for sellers. Another disadvantage is the need to uproot the kids at a difficult time for them.
But there are advantages, too. Both spouses get money to start over, and it may help you make a clean break-neither of you will have to deal with the memories of better times in the family home.
Once you've decided to sell, you'll be faced with a lengthy and detailed process that involves a number of projects. 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.
Picking an agent. While in general, it's fine to sell a house without an agent, it's not recommended when you're in the middle of a divorcethe added stress is really not necessary. Try not to spend a lot of time arguing about who your agent will be. If you were satisfied with the agent who worked with you when you bought the house, see whether that person is available. If you're starting from scratch and having trouble agreeing, each of you should pick a friend or relative, and have those two people agree on an agent. Or you can each choose an agent and have those two agents select a third to sell the house-if the first two agents are willing to do it with no listing in the offing. (They probably will if they both work for the same realty company and you agree that they can pick someone in their company.)
Settling on an asking price. Take the agent's advice about your asking price-that's one of the main reasons you're using an expert instead of selling the house yourself. Turning that decision over to the agent will eliminate one potential conflict. If you think the agent's opinion is really off-base, you might need a different agent (or a reality check of your own).
Preparing to show the house. Getting the house ready can be the most difficult part of the sale process. There's often some work that needs to be done-minor repairs, painting, and the like-before the house is ready to be shown, so you need to agree on where the money for that will come from. It's possible, though not too likely, that both of you may have moved out by the time you put the house on the market and you can leave the place to be staged by 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 might need to figure out a way to compensate that person for the extra effort.
Reviewing offers. You'll 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 volatile. Your agent can advise you, of course, but ultimately you'll have to make the decision jointly.
Dividing the cash. Finally, you'll have to figure out how to divide the proceeds. In general, that shouldn't be too complex-the escrow