When Is the Best Time to Sell a House During a Divorce?

If you and your ex partner are planning to sell your home during a divorce, it can help to know when the best time to sell is. While this is likely to be an emotional time for you both, it can help to be aware of the logistics involved.

Timing the sale of a house during a divorce is typically a question of cost versus benefit. While one or both of you may wish to break free from the situation as soon as possible, there may be reasons to hold back, at least for a period of time.

Planning the Next Steps

There are a couple of options when it comes to selling a house during divorce. Firstly, there may be children involved, in which case the custodial parent typically remains at the home until the youngest child turns 18. After this point, the house is then sold.

A second option is for one spouse to buy out the other, who remains in the home and a third is for the separated couple to sell the house straightaway and divide the profits (usually the simplest solution). There are three standard routes you can take:

1. Selling via a realtor: This can take several weeks, involving fees that could run into several thousand dollars.
2. Private selling: While this allows you to retain money you might have lost through commission, it can be a very involved process, especially if you’re already working through a divorce.
3. Selling to a professional buyer: Delegating the work of selling the property to a professional buyer can help to make things easier, meaning you and your ex partner need only worry about managing your possessions and moving out.

If you are in negotiations over who gets the house, this will depend on when it was bought, and whether it was bought before or during the marriage. In some cases, letting go of the home in favor of other assets may be more preferable. Additionally by zeroing in on selling the home you may find that you miss out on other assets which may be valuable to you, whether emotionally or financially.

Financial Factors

It pays to keep a close eye on the market: if you sell quickly, you may not get the best price. Divorce can be expensive, and while making a quick sale might be a relief initially in the long run, it also potentially means you lose out on additional money you would have made by waiting.

If you are the one staying in the home, this can bring up other issues such as maintenance and paying property tax, and without another person there to contribute, you may be left to cope with this alone.

If you decide to sell you may face capital gains taxes due to increased value. This is tax on profits earned when an asset (such as a property) is sold, which can be significant, especially if you bought at the low end of the market and sold at a peak price. If the profit is over $500,000, you may be asked to pay federal capital gains taxes of up to 20% depending on which tax bracket you are in.