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Selling A House During Divorce In Virginia
If you’re wondering about the ins and outs of selling your house in a divorce in Virginia… we’ll dive into the steps and things to look out for in this article.
Dividing assets is one of the most stressful parts of going through a divorce. The marital home is an important piece of both of your lives, and deciding to let one party keep it, or to sell the home entirely, can take months to decide. The best decision, however, in most cases is to sell the home and divide the proceeds, so that both parties can move on with their lives.
The process of selling the marital house during divorce is much the same as when selling a home under normal circumstances. You can choose to hire a Real Estate Agent, who will manage the entire sales, or you can sell it as-is to a local cash buyer, who speeds up the process and eliminates the need for continued communication and negotiation. No matter which you choose, once the sale is finalized, the proceeds are divided between the two of you based upon Virginia State laws.
Getting a divorce is complicated. Selling a house is also complicated. The more decisions that have to be made regarding the sale of the home, the more likely it is that you will end up in disagreement.
What Happens With The House In A Divorce
In many divorce cases, one spouse will keep the marital home, buying out the departing spouse’s share.
In others, agreements are made where one spouse uses the house for a set period of time (this is usually used when there are children in the home), and then sold at a certain date (usually when the children reach a certain age).
In most cases, however, the best course of action is to split or sell all assets, including the home.
There are four ways to deal with the marital home in Virginia:
Split Large Assets
In instances where both parties possess substantial marital assets, such as a primary residence and a secondary vacation property, it is recommended that these be divided in a manner that ensures each party retains assets of roughly equivalent value.
In situations where there is only a single residence, the other party may opt for alternative assets like vehicles, art collections, stocks, and so forth.
This approach is highly advisable as it spares the couple the added stress of selling a property amidst the challenges of divorce. There is no need for marketing or the process of reaching a mutual offer.
Naturally, the division of significant assets necessitates negotiation to determine each party’s share and reach a fair agreement.
Buy Out Your Spouse
Many divorcing couples opt for a buyout arrangement, wherein the spouse desiring to retain ownership of the home purchases it from the other party.
The buyout amount may be set at half of the property’s market value or potentially lower, depending on factors such as the respective incomes of both parties, the earning potential of the house, and their contributions to the property.
This choice proves particularly beneficial for spouses with school-going children in the vicinity or when selling during this period is not advisable.
Prior to committing to a buyout, the interested party should ensure that the funds involved are not subject to inclusion in the divorce proceedings. Moreover, they must ascertain that they possess sufficient resources to independently manage the mortgage payments.
Co-Ownership Of The Home
If the divorcing couple maintains an amicable relationship, they may consider the possibility of co-owning the house. This entails drafting a co-ownership plan that outlines the division of the mortgage, responsibilities for repairs, and other pertinent details.
Additionally, the couple can establish guidelines for distributing the proceeds from a potential sale of the property.
This option proves advantageous if both parties wish for their children to continue residing in the same home. However, it’s not without its drawbacks.
Firstly, co-owning real estate implies a continued financial connection to the other party. Moreover, late payments could adversely impact the credit scores of both spouses.
Sell The House, Virginia
As previously stated, a prevalent choice is selling the house on the local real estate market. This option can offer a sense of closure for both parties, but it is most practical when there is equity available from the property.
Additionally, this process will furnish the divorcing couple with the necessary funds to address outstanding debts, cover expenses for real estate agents and divorce attorneys, and potentially secure new residences.
It’s important to bear in mind, though, that if neither party has resided in the property for a continuous period of two years, they may be subject to capital gains tax.
Do You Have To Sell Your Virginia Home During A Divorce?
If you are unsure about selling the house, here are a couple of reasons why selling the home is often the better choice:
If one spouse wants to keep the home, they must agree to price and terms. If you fail to settle on an agreement, the Court will decide for you. This may not be what either of you want and lead to even more discontent. Additionally, the added court costs will add up for both of you.
If you sell your home you can avoid much of the added stress and legal battles. You can just split the sale and move on with your lives.
Risks And Liability
When one spouse buys out another to keep the marital home, often they must qualify for a mortgage on their own. The buying-spouse must be able to qualify for the full price of the home in order that the leaving spouse gets their equitable share in cash. This is often a significant roadblock with a single income.
Many divorce agreements call for one spouse to pay all or part of the mortgage while the other spouse lives in the home. This is a dangerous because if your spouse stops paying the mortgage, you can find your self out of a home, and with bad credit to boot!
Selling A House Before Divorce Virginia
Selling the house after filing for divorce may signal to potential buyers that the couple is motivated to sell quickly, potentially leading to lower offers. To circumvent this, it is advisable to sell the family home prior to finalizing the divorce.
Here are some key considerations when selling a home before divorce:
- If both parties intend to sell the property at market value, it’s best to continue residing in the home together to avoid giving the impression of an impending separation.
- If cohabitation isn’t feasible, it’s recommended not to remove all of the other spouse’s belongings.
- When receiving an offer, both spouses should actively participate in the negotiation process, rather than leaving it to one party.
Once again, the primary objective for the couple should be to prevent potential buyers from perceiving any urgency to sell quickly, thus minimizing the likelihood of receiving lower offers.
Pros Of Selling Before Divorce
Joint negotiating power is stronger
Avoid legal battles of home ownership after the divorce
Secure the best value for the home
Cons Of Selling Before Divorce
Working together can be difficult.
How To Sell A House During A Divorce in Virginia
While it’s not highly recommended that you sell the house after you’ve already filed for divorce, it can be done and many couples choose to do so. When you follow this path, there are many things to take into consideration, that the both of you will have to work together on:
- Maintenance of the home (Even if you’re not living in it)
- Showings and open houses
- Payment of the mortgage, taxes, insurance, and utilities
- Negotiations with buyers
- Home inspections and resulting repairs
The sale of a house during divorce technically is no different than any other situation, however the interests of the divorcing sellers are often different, which severely complicate all aspects of the sale.
Six Steps To Selling A House During Divorce In Virginia
- Consider Home Improvements: The couple needs to decide whether to enhance the property or sell it as-is. If they choose the former, discussions should revolve around financing and assigning responsibility.
- Engage a Specialized Real Estate Agent: It’s crucial to select a real estate agent with expertise in selling properties during divorce. Both parties should mutually agree on the choice, ensuring neither dictates the decision. A knowledgeable agent helps avoid undervalued offers.
- Share Staging and Marketing Costs: Staging and marketing expenses can be substantial, particularly for properties in need of upkeep. Both parties should collaborate on cost-sharing arrangements and designate someone responsible for managing payments.
- Establish a Consensual Asking Price: Determining the asking price should be a joint decision, based on the property’s fair market value. This can impact other aspects of their divorce negotiations, making it a critical step. Involving a real estate agent and a divorce attorney is advisable.
- Agree on Offers: Both parties must be in agreement when considering offers. Acceptance or counteroffers should involve input from both spouses. The sale should not proceed unless both parties are on board, not just one.
- Equitable Sale Distribution: After the sale, if both parties are on good terms, dividing the proceeds should be straightforward. This follows the settlement of mortgage payments, taxes, real estate agent fees, and closing costs. Failure to agree on profit division could lead to a more complex process, which is further detailed later in this article.
Pros Of Selling During Divorce
Allows more time to plan
Divorce attorneys can offer timely advice and counsel.
Cons Of Selling During Divorce
The divorce can be used by buyers as leverage for lower price
The added stress of selling the home can negatively affect the whole divorce and/or the sale
Selling A House After Divorce, Virginia
In this case, once the divorce is finalized, the spouse who kept the home can sell it as they please without the conflicting interests of their ex-partner. Additionally, buyers won’t have the divorce to use as leverage in making offers.
Pros Of Selling After Divorce
No one to argue with in terms of making decisions
Moving out is easier
Buyers can’t use divorce as leverage to lower price
Cons Of Selling After Divorce
The whole sales process falls on you alone
You may be pressured to sell faster because of the difficulties of maintaining a home on one income.
How To Divide The Profits From Selling A House During Divorce In Virginia
When a house is sold during the divorce process, all proceeds have to go through the attorneys.
Virginia is considered an Equitable Distribution State, which means the profits from the house are not divided 50/50, but rather “equitable” as determined by a court.
In an Equitable state such as Virginia, your attorneys will negotiate to find a fair and equitable distribution of the proceeds of the sale of the marital home. If the divorcing couple cannot come to an agreement, a judge will decide. In this case, usually nobody wins.
3 Tips To Selling Your House During A Divorce, Virginia
- Timing The Sale In The Summer For Minimal Disruption To Children:
- If children are involved, aim to sell the house during the summer to minimize the impact on their schooling. Recognize that relocating is challenging for children, so thoughtful timing is crucial.
- If selling during the school year is unavoidable, consider the effects on your child’s routine and emotional well-being, ensuring they feel supported.
- Optimal Timing: Spring Selling for Greater Enthusiasm:
- If possible, plan to sell your house in the spring. Buyers are generally more eager to make purchases during this season due to warmer weather and the end of the school year. Additionally, many people receive tax refunds during this time, providing potential buyers with additional funds.
- Exploring Fast Sale Options: Investors and Cash Buyers:
- Couples in need of a swift sale for their family home should explore options like real estate investors and cash home buyers. These buyers possess the financial capacity to make quick, cash-based offers. This allows both spouses to access their equity promptly and move forward.
- Unlike a traditional market sale through a real estate agent, a fast sale to a cash buyer means fewer months of expenses related to taxes, insurance, mortgage payments, utilities, and maintenance. Opting for this route is popular among divorcing couples due to its convenience.
Nuggets For Selling A House During Divorce
Selling the marital house amidst a divorce can understandably be a highly stressful endeavor, given that the very decision to part ways is inherently fraught with tension. Therefore, it is advisable to initiate the sale either prior to filing for divorce or after the divorce proceedings have reached a resolution. Attempting to sell the property while the divorce is ongoing could potentially exacerbate the discord between you and your spouse, potentially leading to diminished offers on the market.
Opting for cash buyers presents a hassle-free alternative that many divorcing couples find appealing. These buyers offer a straightforward transaction, providing divorcing spouses with an agreed-upon sum and the possibility of closing the deal in as little as seven days. This process eliminates the need to reach consensus on repair costs or associated expenses, ensuring a swift and uncomplicated transaction.
If navigating the sale of your home during a divorce proves to be a source of significant stress, allow us to assist you. At Academy Home Buyers, we are prepared to extend a complimentary, no-obligation cash offer and grant you the liberty to select the closing date that best suits your needs. To express your interest, please complete the form below or reach out to us directly at (757) 755-5587.
We’ll evaluate your house, make you a fair all-cash offer, and you can decide if selling your house to us is the best fit for you. We’re here for you, just reach out and lets chat.