Can We Sell Our Home Before We are Officially Divorced?
If you’re thinking about beginning divorce proceedings, chances are your combined marital assets are weighing heavily on your mind. What will the outcome be? Can we afford to support two households? How will the changes in income affect our children?
When it comes to assets, often the family home is a big part of the financial picture and figuring out all of your options might feel overwhelming. So, let’s take a look at what you should be considering when it comes to your real estate investments and working through mediation.
Let’s start from the beginning.
When we look at the real estate that a couple jointly owns, we’re including not only the residence, but also any rentals, timeshares, and land. We also know it is important to do a complete forward-looking cash flow analysis; this helps the client see the future financial picture of home ownership. Through this process, we can show them what price ranges make the most financial sense once the household is divided into two.
What if we decide to sell our home before the divorce is final?
Should the clients have children still living at home and decide to sell, we encourage them to spend some time looking at the following:
1. Different neighborhoods
2. School districts
3. Proximity to the other parent
4. Nearness to the children’s activities.
For those clients who are considering divorce and are closer to their retirement date, it is also important for them look ahead at the following:
1. Amenities they would need/enjoy in their retirement.
2. What type of home they would prefer (one-story, retirement community, etc.).
3. Proximity to healthcare facilities.
When it comes to the logistics of the sale, it’s also important to work through the details of the transaction. Here are some other factors to consider:
1. Who is going to pay for the normal expenses during the pendency of the sale?
2. Who is responsible for the ‘market readiness costs?
3. If one spouse pays the expenses, will they be reimbursed from the proceeds?
4. How will you select a realtor?
5. How will the net sales proceeds be divided?
Sometimes, especially in the current Colorado real estate market, a marital residence must be sold in order to secure another residence. Because this transaction and its timing is so complex, it is of utmost importance that all angles are analyzed, and the impact known; this includes the moving and market readiness costs that are involved and how the marital residence is titled along with other potential issues with lenders.
Therefore, we feel that it’s important to choose a mediator who works closely with realtors and lending professionals to make certain that this transaction is doable prior to the finality of the divorce and that it can be done without any potential future negative results.
The bottom line is: It is possible to sell the residence during the pendency of the divorce, but it must be carefully analyzed.