Should You Sell the House Before or After Divorce?

In the process of a divorce, you want to make sure that you get everything you are entitled to, this means knowing your rights and making sure you get as much as your ex-husband, but it also means that you should do everything in the most sensible way possible to maximize your cash and minimize hassle.

You will want to look at the house selling options during a divorce, but there is no denying that this process can add a little bit of stress to the situation. Also, it needs to be a joint decision even in the case that the divorce is not amicable. A lot of people are left wondering how to stop their spouse from selling the house during a divorce, as your ex-husband may try to sell the house without your approval.

Should you look for ways to sell your house fast before you get divorced or wait until the process has been finalized? As a woman leaving a marriage, which of the options is best for you? You might even need to establish who has rights to selling the house during a divorce, is there a prenuptial agreement in place protecting the home? What happens to the money in premarital property selling during a divorce?

There is no denying that there are pros and cons to both ways of doing things, as we’ve covered in this guide.

Selling before: Benefits

The main benefit is the fact that it prevents the process from dragging on for a long time. Cutting ties quickly can help you to move on with the rest of your life so that you don’t have to keep contacting your ex after you have made your fresh start.

Selling up also prevents some local laws that can require equity to be “bought” off the other party if it is kept through a divorce. Lawyers, accountants, and even the state courts can sometimes get involved in the more complex cases to try and ensure everyone gets the same value in a divorce.

The IRS and taxation is another big reason to consider selling first as married couples can benefit from exclusions of capital gains tax up to half a million dollars. It doesn’t matter who handles selling the house during a divorce, if you are still a married couple, there are tax benefits.

Selling before: Difficulties

Selling your house before you get divorced can be difficult. If your relationship has totally broken down then it means that you need to find a way to be amicable and even work together in order to sell up. The idea of doing this might be the last thing on your mind.

Also, if you are looking to get your house sold before the divorce it can cause another time-related pressure. Trying to get it sold quickly can mean that you have to sell the house fast to the first buyer who comes along and you might not get the best value for your home. 

Selling after: Benefits

Selling after divorce can have benefits, too, instead of selling a house during a divorce. You might need to live there. Deciding who gets to stay in the house during a divorce can be really tough, and add another strain, but if you have a family it is best to keep some normality and have some form of adjustment period rather than changing everything at once.

If one of you still needs to stay in the property then it might be worth considering whether you can hold off on the sale. Renting a property to live in can add another expense, and it seems silly to do this if you still have the house in the family. In a lot of cases, people continue to share the house even through the divorce process. It might not provide a clean break, but if you are amicable with your ex-husband it could be an option.

Another reason for selling after would be that the home can appreciate in value. Real estate is normally a good investment and the price can go up, meaning that you can sell for a higher value if you take your time. You are also likely to get better offers if you don’t have to sell in a hurry. You can wait until the right buyer comes up, one who is serious about buying your home and is happy to pay close to the asking price. If you have to sell in a hurry then you might not get the best price. In some scenarios, you might even want to wait for an uptick in the property market to maximize your cash.

Selling after: Difficulties

The idea of waiting to sell your home and still having to retain contact with your husband might be your worst nightmare. It is worth thinking about this, the fact that you are still tied to your marriage while you complete the sale. Is this something you want to bring with you into your fresh start?

Another difficulty is the homeowners’ insurance. The person who stays in the marital home after the divorce will need to make sure that the homeowner’s insurance is under his or her name.

On top of this, you may miss out on some of the tax benefits, such as capital gains tax, that you would experience as a married couple. Financially, selling afterward might not be as wise as selling before your divorce goes through.

Conclusion

As you can see, there is no simple answer and you need to consider your own personal relationship and the scenario you are in. Do you need the money quickly? Are you on good terms with the man you are divorcing? Do you need to continue living in the family home? These things can inform your decision regarding whether to sell before you go through the divorce or whether to wait until after. Try to make the best choices for your wellbeing at this difficult time, as well as considering your finances, and any children who might be involved. Uprooting them quickly with little warning can make things even more difficult as they cope with their parents having to get divorced.