Deciding to Sell Your House: A Guide for Divorce

Divorce is stressful from every angle.  There are a million decisions that must be made, and they have to be made in the middle of significant emotional upheaval.  Deciding whether to keep or sell your home as part of your divorce is among the most significant decisions that needs to be made.  Given the financial and emotional impact of this decision, both immediately and for years down the road, it’s important to take your time and make an informed decision that you won’t regret later.  In this article we will discuss some key considerations for you as you think through this decision.

Assessing Your Emotional and Financial Situation

Understand Your Emotional State

Divorce comes with a host of emotions that might include sadness, anger, disbelief, relief, and many others.  It can be difficult to make decisions while on this emotional rollercoaster.  You may be tempted to do things that are not totally rational or that you would do differently in calmer times.  It’s important to keep your emotional state in mind as you work through various decisions and give yourself the space and grace to work through major decisions in your own time.

As a first step, you may want to reflect on your emotional ties to the house.  On the one hand, if it is the home where you have raised your children there are probably many happy memories there that you are not ready to leave.  But on the other hand, depending on the issues that led to your divorce, there can also be many negative emotions associated with the home.  By considering your emotional ties, both positive and negative, you will begin to understand if staying in your home will be emotionally manageable for you.

Evaluate Your Financial State

Once you understand whether staying in the home makes sense emotionally, then you can start to think about the financial feasibility.  This is where you will want to work through your post-divorce income and expenses, including any potential support payments.  Is keeping the house something you can afford on your own?  Are there other things that you must give up to keep the house?  Are you willing to give those things up?  This is where understanding your values and using them to help you frame the tradeoffs can be instrumental.

Weighing the Pros and Cons of Keeping the House

Now that you have mapped out your emotional and financial situation, it is time to weigh the pros and cons. 

The Pros

Keeping the house will provide more stability for you and your children.  You won’t have to go through the stress of moving and your kids will get to stay in a home (and neighborhood and schools) that they are familiar with.  And if your home has high sentimental value from raising your kids there, you won’t have to deal with that loss if you are not selling it.

The Cons

Houses come with lots of costs.  The mortgage and taxes are obvious items in the expense equation, but you also must think about maintenance costs going forward as well.  If the house needs major repairs, how you will fund those?  What about cleaning and lawn maintenance and snow removal?  If your husband took care of those things, will you take over those jobs going forward or will you want to hire someone.  All these costs need to be factored into your plan.

In addition to the financial costs, this is also where you think about the negative memories and emotions that are tied to the home.  Will it be too painful to stay in the house and be reminded daily of things that may have happened in your marriage?  Might you be better off with a clean slate, even if it means going through the stress of a move?

Considerations for Co-Ownership

Another option is that of continuing to co-own the house (although only one of you lives in it).  This most often happens when there are kids at home and divorcing couples want to minimize the impact on their children.  This can work, but it requires a very clear agreement of financial responsibilities.  You must feel comfortable that you will be able to maintain open communication and boundaries with your ex-husband going forward.  And you should also make sure you understand the expiration date of this kind of arrangement, which generally happens when the kids go off to college or are otherwise grown up and on their own.

Seeking Professional Guidance

Financial Advice

As you think through the emotional and financial impacts of your options, there are several professionals you may want on your team to help you.  The first is a divorce financial planner, specifically a Certified Divorce Financial Analyst (CDFA).  This person can help you develop a realistic picture of income and expenses going forward and can compare different scenarios to illustrate the impact of keeping or selling the home on your overall financial plan.

Legal Advice

Your divorce attorney or mediator is also instrumental in helping you figure out what will be best for you going forward.  They can help you understand the legal implications of various options as well as what legal documents you will need to have to protect you going forward.  Even if you and your (ex)spouse are on good terms, it’s important to have your settlement documented appropriately.  Things change over time and you do not want to be in a situation where you made an agreement, but then he changes his mind, and you don’t have a legally enforceable contract to go back to.

Tax Advice

Finally, a tax advisor or CPA can help you ensure you understand the potential tax impacts of any decisions you make, both now and in the future.  For example, it will be important to understand the potential impact of selling the house as a married couple, or post-divorce.  Real estate has appreciated rapidly in most of the country over the past few years.  This could mean significant capital gains in your home.  If you are planning to sell the home, it may be more advantageous to do it prior to the divorce, when you can each claim a tax deduction on the gains, rather than waiting until after your divorce and bearing the tax burden alone.

Making the Decision

Making the decision on what to do with your house as part of your divorce is very significant.  You want to consider all angles, emotionally and financially.  It is also advisable to have the right professionals in your corner.  This is a major decision that can impact your life for years to come.  You want to ensure that you understand all the considerations before making any decisions.  It is also best to communicate openly with your ex-spouse about all the options.  Working collaboratively can lead to better outcomes for everyone involved.

Selling (or keeping) your house is just one step to rebuilding your life.  While it is a big decision, know that you have all the resources you need to make the right decision for you.  Take your time, seek professional guidance, and prioritize your emotional well-being.  You will get through this and there are many places to get support along the way.Top of Form