Don’t Torture Yourself For Months If You Don’t Have To…
Let’s face it: divorce is not a happy situation. And selling your house in a divorce is hard. No matter what the details are, it can be a time-consuming and difficult journey. Thankfully, others have traveled this road before you and many more will travel it again.
No matter what the situation is, you have options… including the option of selling your house and starting fresh.
Getting a fair cash offer quickly is becoming more and more popular. Selling your family home in your local real estate market in a more “typical” situation is time consuming enough… waiting 60 to 90 days to go through the “process” with a real estate agent can easily go from annoying to overwhelming when your biggest asset, your house, is literally on the table in a divorce case.
On the one hand, you may want to ride the fast track and get out as soon as you can. On the other hand, there’s this marital home. Your primary residence, the house you sweated for, gave up part of your life for. Letting go of it during the divorce can be unthinkable. It’s not an easy decision.
If you’re not quite ready to cut that umbilical cord, read on and think about some of the reasons why divorcing your house, not just your spouse, might be a good idea.
Bad Reasons To Keep Your House In A Divorce
You will come up with a million reasons to hang on to your house. It will churn in your brain and keep you up at night. It’s your family home, your marital home, and one spouse might have more or less attachment to it than the other. One spouse may have even paid more into it, and the other spouse may have even grown up in it.
Marital property can be full of complex and interwoven emotions, and sometimes those feelings drive a great deal of stress and cause a great deal of back and forth in a divorce settlement.
You’ve accumulated shared memories of this house. Many milestones occurred in this house. Renovations, celebrations. Family arguments, friendly gatherings.
Having potential buyers traipsing in and out the front door? Not comfortable.
And then what about all those repairs needed to make the house more appealing and easy for a real estate agent to sell? Exactly how long could that process take? Do you even have that much time?
Will anyone really appreciate the upgraded kitchen that mattered so much to the other spouse? Or the converted garage that may not have added all that much to the fair market value?
Bigger issue: has your marital home even been seen by an inspector in the last 20 years? Yikes. No telling what that might uncover.
It may come as no surprise to you that sometimes we hold on to things that are bad for us…and that can include our houses!
Hanging onto your house is like hanging onto your spouse. It can put you in a rut, hold you back, and keep you feeling unproductive and actually toxic. It’s much better to save time and energy for the road ahead.
What About Renting The House Out?
With rising property values, it’s tempting to consider keeping the house as a rental, splitting the proceeds with your former spouse or buying them out so it’s a completely separate property owned 100% by you. Putting aside the question of making that work in a divorce settlement, remembering to pay capital gains taxes, navigating the laws around community property vs. separate property, there’s a more emotional reason to look at other options.
How financially tied to your past do you want to be? If you rent out your old house, you will have to be in constant communication with your former spouse, about everything – repairs, income, property taxes… and any potential future real estate transaction that may seem like a good idea later.
But even if you no longer co own it and it’s 100% your personal property, transferred to you in the divorce proceedings and free of the other spouse’s interest… you’ll still have a constant reminder of a chapter in your life that is rapidly closing now.
Most people just need a fresh start.
When You Both Want The House
If neither spouse wants to leave the house, well, that’s a whole other problem. Either a judge will make that decision in divorce court based on your shared assets, or you’ll have to sell the house and split the proceeds anyway. In many situations, the kind of constant communication and collaboration required to move out, repair, repaint, stage, photograph, list, and show a house, working with an agent that’s caught in the middle of constant disagreement in a bigger process of dividing large assets, is simply exhausting. Throw in multiple divorce attorneys, an existing mortgage that isn’t paid off yet, and this marital property just got a whole lot more complicated.
Should You Just “Buy Out” Your Ex?
If you want to keep the house but your spouse doesn’t, you will have to buy this person out, based on a shared agreement for a fair price. (That’s if you can even agree on a price.) Perhaps you’re lucky enough to keep the house in exchange for other things, depending on how you choose to divide large assets. However, most of us don’t have other large assets worth the value of a house, so you may have to come up with the cash to buy your spouse out if that’s the road you want to take.
To buy out your spouse, you’ll need to calculate the equity each spouse has. Here’s the formula:
Net Equity = (Appraised Value – Mortgage Obligation) / 2
Start by taking your appraised value, subtract your mortgage obligation, and divide that number by 2. With the insane rise in real estate prices over the past 10 years, you’ll discover that the appraised value is much higher than you realized.
Consider this example:
You and your spouse bought your dream house in a decent part of town in 2015 for $250,000. By 2022, your marriage isn’t skyrocketing, but real estate prices are. That same house is now worth $487,000.
Since most of your mortgage payments went directly to pay down the interest, the principal owed is a hefty $220,000.
To pay off your spouse:
$487,000 (current appraised value)
– $220,000 (current mortgage obligation)
= $267,000 (joint net equity)
divided by 2
= $133,500
To pay off your spouse, in this example you’d now need $133,500 in cash. If you’re like most people, you probably don’t have that kind of cash sitting around in a drawer.
Also, you will have to assume the mortgage payment by yourself – on one income. Think that through.
Just Sell The House
When a person dies and there is no husband, wife, heirs or beneficiaries, the house gets sold. When a marriage dies (brutal honesty here), it’s the same scenario. One way or another, the house needs to be sold.
And guess what? It’s pretty much the law of the land, anyway. In a divorce, the two of you have to divide your assets. The house is your biggest asset. And unless you want to continue living under the same roof as your ex’s (hey, some people actually try this, but we don’t recommend it), you are going to have to sell your house.
Ok, so if you’re still reading, chances are you’re considering selling your house for cash quickly instead of taking forever with a real estate agent. What’s next?
Selling Your House During Divorce (The Traditional Way)
In the conventional, time-honored scenario, the two spouses would agree on an agent, set the asking price, show the house, review all offers, and divide the cash.
Sounds simple. And if it sounds too good to be true, that’s because it is!
Both parties actually have to agree to a written and signed agreement – a stipulation – that decides important details about the selling of the house, such as:
- Selection of the realtor
- Setting the sale price of the home (including those annoying reductions)
- Which spouse handles logistics for showings
- Which spouse communicates with the realtor
- Whether both spouses have to formally approve offers
- Whose share of the sold home will pay any liens or encumbrances (that’s a fun one)
- Capital gains taxes
- Legal considerations that need to be weighed by the divorce attorney
- Implications of the divorce agreement
- If there’s any disagreement, depending on whether or not it’s a community property state, there could be more legal headaches. Especially if there’s a fight happening in court.
How long do you think all of this takes? On the average, from selection of realtor to final sale, it takes anywhere from 3-6 months, and possibly longer. Most people don’t have, or don’t want, to spend this much time trying to extricate themselves from a bad situation. Additional time on this divorce journey = additional stress.
Stress Will Age You
Divorce and selling a house are known to be two of the most stressful life events. Going through both at the same time can be ten times worse. At a time during emotional or financial upheaval, it’s very difficult to maintain full concentration on selling your house. Fatigue, depression and confusion are not your friends when trying to sell your house. This is when bad decisions are made, snap decisions, knee jerk decisions. It’s easy to get overwhelmed just thinking about realtors, commissions, inspections, appraisals, and showings.
“But I Can Deal With Stress”
Suppose you’re saying, “I really don’t mind the stress. I thrive on stress!” You decide you want to sell the house, but you want to hold out and see how much you can get for it. Maybe you can start a bidding war! You’ve heard this happens all the time in hot markets. Price the house low enough to sell and watch the offers pour in. For the sake of the narrative, let’s just say your spouse has agreed to this strategy.
What Lies Ahead If You Put Your House On The Market While Getting A Divorce
The Wacky World Of Realtors
“The real estate industry is saddled with a large number of part-time, untrained, unethical and/or incompetent agents. This knowledge gap threatens the credibility of the industry.” -National Association of Realtors
Realtors are an odd species. Most of them had prior careers and are in this racket for a fast buck. It’s been a hot market, after all. (How many people do you know who ditched their careers, or retired, to sell real estate?)
You meet and interview 3 or 4 different characters, all of whom promise you the moon, ensuring you that this is a seller’s market, after all. Which one do you choose? Who do you trust? Which personality can you be around for days and months at a time? Once you pick one, the real fun begins.
Time To Clean Everything
You get to clean up your clutter, your memorabilia, mementos, art, books, workout gear, and more because now the house has to be staged. You clean, organize and declutter. You make trips to Goodwill. You throw out boxes of papers, clothes, old curtains, supplies. You take a step back to look and (wow!) this house has never looked so good before! It doesn’t even look like your house!
Time To Put On A Show, Living In A Staged House
Now you get to live in your staged house, careful not to spill, knock anything over, or track in dirt. You also have to be prepared to leave at a moment’s notice when a prospective buyer wants to drop in and take a look. This alone can take hours.
Where do you go? Starbucks? The library? A restaurant? Where do you take the kids when they get out of school? They obviously can’t go home. If you have a dog or cat, what do you do with them? You can’t exactly leave a pet in the house with strangers walking in. Did you clean that litter box? Did you vacuum all the dog hair off the carpets? People notice this stuff!
Buyers Want To Change The Silliest Things
When you’re finally able to return, your realtor gives you a laundry list of complaints from this prospective buyer: the deck looks unstable, the cottage cheese ceilings have to go, the cabinet doors in the kitchen are crooked, the closets are too small…
You’re going through a divorce. Do you really want to hear about all this right now? And why are you doing all this work?
Ok Fine, We’ll Fix It. Just Don’t Lowball Us…
You make the necessary fixes anyway, because the realtor assures you this is a really strong prospect. You put other potential buyers (and your life) on hold while you call contractors (who are notoriously flaky) to come and make these repairs. Two or three weeks later, the repairs have been made. You’ve delivered on your end. You wait for the offer.
They lowball you. This lovely couple makes you an offer $40,000 less than your asking price, contingent upon replacement of the deck floor.
And Their Financing Just Fell Through. UGH!
The best part? After accepting the lowball offer where the deck floor mattered so much… a week later their financing falls through. And you have to start over.
This happens three more times with three different couples.
Enough is enough. You consider taking it off the market. Maybe give it a few months. You will have to get a new appraisal, since appraisals only last for 3 months.
Feels Like You’re Running Out Of Time…
But your ex is getting impatient, and now there’s another attorney involved.
You have to do something. Fast.
Selling Your House For Cash = Freedom
A cash buyer is what you need.
Whether it’s before your divorce, during your divorce or after, you probably need cash and you need it fast. You don’t have time for appraisals, repairs, and inspections. That process can (and usually does) take up to 6 months – or longer. That’s longer than you have. If you paid for an appraisal at the start of this glacial process, you may end up having to pay for yet another appraisal before your house gets sold.
And the stress of dealing with a realtor is not worth your time, or your health.
After looking at all your options, the obvious answer is to sell your house “as is”.
And guess what? Letting it go is not as complex as you think.
How A Cash Buyer Works
A cash buyer will take the current market value of your house, make a fair offer, and you are done. If you like the offer, you can close that week.
Done!
No cleaning up, no repairs, no upgrades. No fees, no adjustments, no negotiating, no haggling. Pack your bags and say goodbye.
Compare this to the time you’ll have to spend with months of headaches, realtor fees, commissions, and closing costs, all while going through a divorce. And it will be months and months before you can move on.
A Good Solution For A Bad Situation
A cash offer for your house “as is” means no lender involvement, no inspections, no appraisals, no delays. A cash sale means a guaranteed fast closing. No repairs needed and no added stress.
Better yet, no fast-talking realtors. Did it occur to you that, while the realtor takes a generous commission off your house, you end up doing all the work? After the sale, you can guarantee that realtor is dining out on your dime.
You can eliminate all of this excess, time and worry by simply taking the cash. Sidestep the chaos and get on with your life.
You Can’t Put A Price On Your Time
Your time is priceless. You can’t put a value on it. Once it’s gone, you can’t buy it back.
None of us know how many minutes, days or years we have left. This is the moment when you need to examine how you want to spend the rest of it.
Selling your house means letting go of a huge part of your past. It can be exhausting. When you add realtors, agents and commissions on top of a life-changing situation, it’s staggering.
When you are in a time-crunch situation, finding a cash buyer will alleviate your stress and simplify the process of selling your house. If you could save yourself the headaches, the fees, the showings, the repairs, and your valuable time…imagine what you can do with that time.
Re-evaluate. Travel. Experience life on your terms.
A cash sale will enable you the freedom to start your new life. With money in your pocket.
Sell your house for cash and start living your life.
