When a couple is going through a divorce, there are many questions that routinely come up about the division of marital assets. One of the biggest issues that divorcing couples often have to deal with is what to do with the house that the couple is currently living in.
Is it better to sell the house now? Or should the couple wait until after the divorce is completed and they have reached a final settlement?
Before we get into the timing of when to sell the home, it is important to note that a lot of this will hinge on the relationship between the ex-spouses during the divorce process and afterward. This is one of the reasons many couples opt for divorce mediation. Mediation is a process that encourages couples to work cooperatively on the issues pertaining to their divorce, rather than going through a combative court battle that often leaves those involved with hard feelings for a long time thereafter.
Assuming that you are planning on divorce mediation, you may be wondering whether you should sell the marital home before the mediation starts or after you have finished with all of the sessions. While there is no right answer to this question that applies to every situation, as a general rule, it is best to wait until you have worked out all of your issues with a mediator before deciding to sell your home.
The main reason for this is that divorcing couples sometimes make decisions in the dark without fully understanding all of the options that are available to them. So, although you may be leaning toward selling the home, some discussions could come up during mediation that might change your mind.
This is one of the major benefits of working with an experienced divorce mediator. Their extensive work with other couples who are in the same situation as yours gives them a unique perspective on things, which they are often able to use to come up with creative, out-of-the-box solutions that the spouses may not have been aware of.
Pros and Cons of Selling the Marital Home During a Divorce
While we suggest that you wait until after divorce mediation is completed to decide on what to do with your home, it is helpful to take a look at some of the advantages and drawbacks of selling your home now versus keeping the home:
Reasons to Keep the Home
- Weakening housing market. In recent years, it has been a strong sellers’ market, making it easier for divorcing couples to sell at a good price. As of late 2022, however, the market seems to have cooled due to rising interest rates and a slower economy. If you try to sell now, it could take longer, which could potentially drag out the divorce process.
- Stability for the kids. If you have children, it might make sense to keep the marital home to provide your kids with some sense of normalcy at a time when their world is otherwise being turned upside down.
- Maintain a sizable tax deduction. If you keep the home, one or both of the spouses (depending on how you work this out) will be able to benefit from the ability to deduct mortgage interest and property taxes.
- Save on moving costs. If you sell the home, then both spouses will incur the expense of moving to another place. If you keep the home, only one of the spouses will have to move.
Reasons to Sell the Home
- You need cash now. As we touched on earlier, home values have risen significantly over the past few years. And even though the housing market has weakened some, you might still have a substantial amount of equity in your home that you can pocket if you sell. This might be very appealing if you need more cash now to adjust to your post-divorce life.
- Let go of the past. For some divorcing spouses, there are too many unpleasant memories tied up in the marital home. When this is the case, they may want to sell the house as a way of letting go of the past and moving on.
- Can’t agree on ownership arrangement. There are some situations in which there is no workable ownership arrangement, which leaves the couple basically with no choice but to sell the home. For example, the ex-spouses may not want to be co-owners of a property, but maybe neither spouse can afford to buy out the other. Or it could be that both spouses want to live in the home, so they are at an impasse. One possible way to resolve an issue like this that you may not have thought of is nesting, which is when the kids live in the home and the ex-spouses rotate in and out.
These are just a few of the considerations that spouses need to look at when deciding whether they should sell their home before or after divorce mediation or not at all. For most couples, their home is their biggest asset, and there are many different ways that it can be used in the divorce process. Working with a skilled and knowledgeable mediator will allow you to explore a wide range of options and decide which one is best for your specific situation.
Contact AMS Today to Find Out More About Divorce Mediation
If you are facing a divorce, mediation can be a great way to resolve the major issues without the need for an expensive, protracted court battle. You can work out important decisions such as when and how to go about selling your home with the help of a neutral, third-party mediator.
To learn more about divorce mediation and how you may be able to benefit from this process, call AMS today at (856) 669-7172 or send us an online message to arrange a free consultation. We offer flexible scheduling with both in-person and remote mediation sessions to fit your needs.