Separating from a spouse can be emotionally and psychologically demanding because it is more than just signing off from a life-long social commitment. If you have built a life together for years, have prepared much for the future, and have amassed a few joint assets, deciding on what to do with your estate will be an additional crunch.
But selling your home because you are separating from your spouse doesn’t have to be a major affliction. Here are a few things that, we hope, could help you get through the selling process easier:
When Is It Best to Sell a House — Before, During, or After Divorce?
There are different pros and cons of selling your house before and after a divorce. So, the best time to sell will depend on which factors you can tolerate and which ones you cannot. Here are some of the considerations:
- If you sell your property before you finalize your divorce, you can use your share of the equity to start a new life after divorce, and there wouldn’t be anything left to tie you with your ex-spouse anymore
- If you sell the property during divorce, though, it can delay your divorce process, especially when the proceeds of the home sale are part of the settlement agreement
- You can wait for the market to strengthen (become a seller’s market) before you sell your house to generate more profits, even if it means selling it after divorce
- If you sell after divorce, you’ll have to decide as co-owners on how to maintain the house and who will spend for its maintenance
- Selling while you are still officially married will qualify you for a larger capital gains tax exemption
- If you sell after divorce, either one of you will have to continue living in the house if you still want to qualify for the capital gains tax exemption
Deciding Who Will Pay for the Selling Expenses
The divorce process alone can be very costly, especially when you are going through a “hard divorce”. When you and your spouse cannot agree on the settlement right away, the fees of your divorce lawyers may pile up. If you want to let go of your house and sell it, you should expect that you’ll also have to set a budget for closing costs even if you sell the house as-is.
Closing costs for sellers include title search, title insurance, home appraisal fees, loan payoff fees, legal fees, transfer fees, recording fees, mortgage prepayment penalties, and the like. Take note that buyers also have his/her own set of closing fees. Ideally, if you want to sell the property faster, you can offer to pay for your buyer’s closing fees. Nevertheless, you can either split the selling costs with your spouse or let either one cover the entire closing costs in exchange for other divorce benefits.
Splitting the Profits
Normally, deciding how to divide your marital properties will start with you and your spouse. If you don’t arrive at an agreement, only then will the court decide how to divide your properties. Georgia is one of the states that practice equitable distribution. This means that the Judge doesn’t have to follow the 50/50 rule, but rather, he/she will determine a fairer division based on:
- You and your spouse’s financial status
- Each one’s earning potential
- Each one’s behavior during your marriage
- Existing debts of each one
- Separate properties
- Length of marriage
- Who will have custody of children, if applicable
- Each one’s physical and mental health
- Tax implications once the property is divided
Tax Breaks for Sold Marital Homes
Capital gain taxes are taxes that you pay to the government once you are able to sell the house. If you’ve lived in the house for two (2) years prior to filing for divorce and decide to sell it as a married couple (before divorce), you can qualify for a capital gains tax exemption of up to $500,000 of the profits. On the other hand, if you sell the house after divorce (when each of you is single already), you’ll only qualify for a capital gains tax exemption of up to $250,000 of the proceeds.
How to Sell a Home Fast During Divorce?
Now that you have an idea of when it would be the appropriate time to sell your house, the next thing to ponder on is how you are going to sell your home. Do you want to list it on the market via a real estate agent who has experience with divorcee sellers? Or do you want to sell sooner, even if it means you won’t be able to sell your house at market price?
At Spire Property Solutions, we greatly understand the stress of going through a divorce, and we’d like to help ease your burden even just a little by answering your property questions or by buying your house for cash. You won’t have to wait for months in a market listing and deal with home viewings and negotiations because we can buy your house in as fast as seven days!
If you want to know more about what your options are, feel free to send us an email via the form below or contact us at (678) 318 – 1801!