As part of your divorce, you and your spouse have to decide what to do with the marital residence. Assuming you bought the home after the date of marriage, the home belongs equally to both of you. If neither you nor your spouse want to keep it, you can sell it. While selling your home might sound easy, there are several important questions to consider once you decide to do it. Below are nine questions you’ll need to resolve and formalize in a written separation agreement before you sell your home.
- How will you divide the personal property? Personal property includes things like the bedside lamps, kitchen table, living room set, the tools in the garage, and even clothes and jewelry. Sometimes it’s easy for spouses to divide these items. For instance, the bedroom set may be a family antique and so it makes sense for the set to stay with that spouse. But sometimes it’s difficult to decide who will get what. If you can’t reach an agreement on your own, you may need to let your attorneys negotiate on your behalf. Either way, when you do reach an agreement, make sure the separation agreement includes a list showing who gets which item.
- Who will live in the home and for how long? Will that spouse continue to live in the home while it’s on the market? Everyone’s situation is different. For instance, one spouse may have primary physical custody of the children, so it makes sense for that spouse to continue to live in the marital residence until the home sells. And in that particular scenario, the parties may agree to wait to put the home on the market until the end of the school year.
- Who will pay the mortgage payments while the home is on the market? Just because one spouse lives in the home, doesn’t mean that spouse has to pay the mortgage. If the dependent spouse continues to live in the home, they may not have the ability to pay it.
- How will you determine if any repairs need to be completed before you put the home on the market? This is a prime area for disagreement. If you’ve lived in the home for several years, the house may need some repairs before it’s sold. But one spouse may feel the home needs more work than the other spouse. It’s important to put in writing how you and your spouse will determine which repairs you’ll make. A simple solution is to say both parties will follow the recommendation of the realtor when it comes to repairs.
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- Who will be responsible for the cost of the repairs (if any are needed)? If both spouses have the means to pay for repairs upfront, they may agree to be equally responsible and cover the costs of repairs as they’re made. But sometimes one spouse can cover the upfront cost of repairs more easily than the other. If that’s the case, they may agree the other spouse will reimburse them after the sale of the home using the money from their share of the net proceeds.
- How will you select a realtor? If the two of you agree on a realtor, it’s easy to name that realtor in your agreement. If you can’t agree on a realtor, make sure to include in your agreement how you will choose a realtor. Even thought the realtor will represent both of you, spouses are often wary of a realtor who was picked solely by the other spouse. That’s why it’s common practice to put in writing that one spouse will pick three realtors and the other spouse will choose the realtor from those three options.
- How will you determine the initial sell price of the home? Again, this is something spouses commonly disagree on An easy solution is to agree to follow the recommendation of your realtor. But if one or both spouses want to be more hands on in making this decision, that’s fine—just make sure to put in the separation agreement how the decision will be made (and what will happen if you can’t reach a compromise).
- How will you determine when and by how much the sell price should be reduced? Like question seven, if the house has been on the market a while, one spouse may become eager to entice buyers by lowering the price—but the other spouse might not be in such a rush. Before this becomes an issue, you should think about how long you’re willing to let the house sit on the market before reducing the price. And if you do reduce the price, how much of a reduction will you make?
- How will you split the proceeds or liability upon the sale of the home? Did one spouse pay a significant portion of the mortgage since the date of separation or cover most of the costs of repairs? When splitting up the marital estate, did one spouse receive more assets than the other? Typically spouses divide the net proceeds from the sale of the home equally but there are multiple reasons why you may decide to split the proceeds unevenly. In either case, the separation agreement should detail exactly how you’ll distribute the proceeds of the sale.
Going through a separation is difficult and dividing the marital estate only adds to the difficulty. While selling the home may seem like a simple task, there’s actually a great deal of work involved. But we can help you simplify this complex process. If you’d like help negotiating terms or if you and your spouse have already reached an agreement and you need to put it in writing, contact our office to speak with an knowledgeable family law attorney today.
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