You’ve both decided that the marital house will no longer be your home. Now you want to put it up for sale. But selling a house in conjunction with a divorce has pitfalls. If you don’t have the right discussion with your partner, you’ll end up fighting over issues you never anticipated:
In mediation you decide together:
- Market Day: Often parties say they want to put the house on the market when the last child graduates high school. But they really mean they want the home sold by then. That entails putting the house on the market months in advance. Or maybe you don’t want the house sold until after the summer of your child’s last year home. It’s important to discuss together when a house should actually go on the market to time its selling.
- How to Get Out of a Mess! Parties must discuss the fact that people will be traipsing in and out of the house. It’s no longer okay to shut your teenager’s bedroom door and pretend the mess doesn’t exist. People need to look at that third bedroom! Couples need a strategy for keeping the house presentable for potential buyers.
- To Broker or Not to Broker: That’s a major question. Do you both want to use a broker and pay the broker fees? If so, which broker do you want to pick? Often couples already have a broker in mind. But some parties disagree on whom to use, and they need to discuss a compromise.
- Listing Price: Often couples agree to have the broker set the listing price. But at times, they want to have more control. You should have the flexibility to feel that you’re listing your house for sale at a price you’re comfortable with.
- When to Lower the Price: What if you get no potential buyers in three months? Six months? Longer? How long are you both willing to hold out before you lower your listing price? And how much should it be lowered? Do you want to leave this decision in the hands of the broker? Or after six months if there is no interest in the home, do you want to agree to hire a new broker? These are all conversations that should be conducted in mediation BEFORE the house is listed.
- Who will Carry the Load? Until the house sells, who will pay its carrying charges? Mortgage and maintenance payments for a co-op, or mortgage and tax payments for a house, are costly expenditures. Do you want to have the person with more available cash pay them monthly Ray Ban outlet and then receive half the costs back from the proceeds of the sale? Or should the monied person pay the major carrying charges one-hundred percent. Do you want to pro rate it? These are decisions for you and your partner to make.
- Who pays upkeep and repairs: Do you have to paint before the sale? Did your boiler just break? You have to discuss who will pay repairs and upkeep while you’re waiting to sell.
- Dividing the Unspoiled: You finally sell your beloved home. You’re sad, but it’s for the best. But how will you divide the profits? First you have to define them. Profits generally are what remains after attorneys fees and brokers fees, and other costs (a flip tax for co-ops) are paid. If you each hired an attorney for the closing, do you subtract the cost of both attorneys’ fees? You have to be very clear about what constitutes a profit.
- How this is a Taxing Event: Before the sale of your home, someone will probably be entitled to take a mortgage deduction. Who should that be? Will there be capital gains taxes when you sell? How will you split them? The best advice we always give clients is that you must each speak with a tax advisor to discuss all the tax ramifications of both carrying AND selling your home.
There are a myriad of issues raised when you sell your house. But as long as you discuss the issues and have the security of putting all your expectations into your mediated separation agreement, you’ll be home free, with no unexpected troubles!