Facing a new emotional and financial reality, divorcing couples often have to make a host of difficult decisions before they can move on with their lives. At the top of the priority list is, number one, thinking about the kids, followed by figuring out what to do with the house, according to Jordan Bennett, a top 1% real estate agent in Mission Viejo, CA, who is a certified specialist in working with divorcing couples to sell their homes.
In Bennett’s experience, it’s usually the case that one or both spouses want to keep the home— desirability isn’t the issue. However, while it’s fairly simple to remove someone’s name from the title of a home, getting somebody off the mortgage is more complex. If both spouses originally qualified for the mortgage, it’s possible that neither would qualify on their own, especially in more expensive markets. That leads many divorcing couples into what may be their only option: to put their home on the market and sell it. Talk about stressful. According to Holmes and Rahe Stress Scale, a tool mental health professionals use to categorize taxing life events, divorce is the second-most stressful life event, and moving is among the top 30. Together? Well, that’s going to be a lot to handle at once. As Bennett explains, above all, you don’t want to let the stress of the divorce impact the marketability of your home. Here are some top tips selling your home in a divorce quickly, successfully, and without creating any more strain during an already-trying time in your life.
Like with any home sale, your first step will be to find an agent to help you sell your home. It’s worth it to find someone who specializes in working with separating couples, a situation that presents some unique challenges.
Number one, according to Bennett, is that your real estate agent will double as a mediator. “People going through a divorce require more hand-holding,” he says. “People are coming to the table with mistrust, fear, and anger.” Find an agent that you both can trust and feel comfortable with, so that as the process goes on, neither of you feels that the agent is on the other person’s “side.” “It’s more the soft skills than the technical skills that are required,” he explains. “Being able to deal with high emotionally charged conversations, being able to be diplomatic.”
Even in the best-case scenario, where the divorce is completely amicable, you need an agent that understands the particular communication challenges of this situation. Bennett gives an example: Normally, an agent can tell one partner there’s a planned open house on Saturday from 1-3 and expect them to relay that to the rest of the family. In a divorce, agents have to realize that couples aren’t communicating reliably. “In a divorce situation, generally every single communication needs to be doubled,” he says. “Every text message, every email, every phone call, every voicemail, you have to make sure those communications are replicated so one spouse doesn’t feel like they’re in the dark.” One spouse feeling alienated from the process, or having the sense that conversations are happening behind their back, can make the entire sale a more fraught experience, creating unnecessary drama and hurt feelings. “You want to hire an agent who is really going to be your advocate, who is going to go above and beyond and outside of your traditional scope because you’re dealing with that stress,” says Bennett.
Before you list your home, decide:
For most people, their home is their biggest financial asset, but selling a home can also bring up a lot of emotions, especially if one partner wishes they didn’t have to sell the house. Unfortunately, these two things can be in conflict with each other, and the emotional side of a divorce can end up negatively impacting a home sale. That’s a situation neither spouse should want, since they’re both relying on the cash from the home sale to start their new life. “Don’t let things go sideways out of spite,” says Bennett. Emotions may run high, but keep your eyes on the prize. You really only get one chance to get the best price for your home.
“In emotional distress, people make bad decisions,” says Bennett. “They’re stressed, they’re emotional, they’re not thinking rationally. Don’t rush into things.” Once you decide that a divorce is happening, it can feel suddenly suffocating to be stuck in limbo, but make sure you are doing things right. Before you sell your house, speak to your lawyer or mediator, financial planner, and tax professional to make sure you understand all the financial implications of the sale. Take your time assembling your real estate team, and make sure you and your spouse are in firm agreement before you do anything you can’t take back.
Yes, one more expense is probably unwelcome right now, but it might be worth it to pay professionals to take care of some of the house prep while you deal with other responsibilities. “Work with a broker that offers concierge-level service,” says Bennett. “Now is not the time to go hire your cousin or uncle or friend that does real estate part-time.” A top agent will coordinate vendors like cleaners, handypeople, stagers, window cleaners, painters, and movers. “People are already so stressed out,” says Bennett, there’s no need to add one more job—or one more negotiation—to their plate. Another reason divorcing couples need extra help is that rather than working together to coordinate getting the house ready for sale, they’re often at odds, or their attention is focused elsewhere. With all the other things that need to get done when working through a divorce, both emotionally and logistically, it’s smart to consider letting a full-service agent hire a team to help you.
“One thing that buyers like to ask is, ‘why are they selling?’” explains Bennett. Make sure you have a good answer at the ready, otherwise you could give up some leverage. Buyers might assume you have to sell quickly and offer less than they otherwise would have. No one is suggesting you lie, but Bennett advises clients to work with their agents to think of a more positive spin, lest people think there’s more room for negotiation. “Mine is, ‘Oh, they’re downsizing,’ which is true,” says Bennett.
The capital gains tax is a tax you pay on the profit you get from selling an investment. This tax rate can be as high as 23.8%, so if you can avoid it, you’ll walk away wealthier. In real estate, there is a capital gains tax exemption of $250,000 per person when selling your primary residence. For a married couple, each partner gets an exemption for a total of $500,000. It’s possible that if you sell after divorce, you could lose the other $250,000 of your exemption. “One thing that people should look at is trying to structure your divorce and home sale to preserve that exemption,” says Green. A tax professional will be able to help you understand the best way to do that, so make sure you consult with someone before moving forward with the divorce or the sale.
While selling your home and getting divorced can be challenging and emotionally fraught, you can get through it with your head held high if you keep your emotions in check and surround yourself with the best possible team.
In ten years, you probably won’t remember the perceived slight that made you lose your cool, but you will definitely remember the money you lost on your home sale. Find a great agent who can help you close this chapter of your life so you can focus on moving on to the next one.
Audrey Ference writes about real estate for Realtor, HomeLight, and other real estate trade publications. She lives in Austin, TX.
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