Disclaimer: The following advice is not intended to replace the professional advice of a lawyer. These tips are applicable for many cases of divorce but may not be applicable to your own situation. Consult a lawyer and your local laws for more details.
Divorce complicates things in a big way, especially when one or both partners decide to sell the home in a For Sale by Owner deal in Australia. The process of putting the house for sale privately is difficult enough, but the added component of divorce throws a monkey wrench on the best-laid plans.
Couples need to set their differences aside, at least until after the divorce is finalized. Unfortunately, this is hardly ever the case.
If you’re in the same situation and you’re wondering how to proceed with selling a house fast, you have options. Remember that your partner is part of the decision one way or another. It’s best you’re equally involved in the for sale by owner real estate selling process from the start.
Here are 5 things to consider before you make a decision:
#1 Strong emotions will be involved in the For Sale by Owner real estate process
Things can get messy. Even if both parties amicably decide to push through with the sale, the question of who pulls the weight hangs in the air. If one partner decides to reside in the property for sale, it’s likely unresolved issues will linger. This can complicate decision-making and even delay the sale.
Keep the relationship as civil between you and your partner as humanly possible. This is for your mutual benefit. If you can’t make clear-cut decisions with your partner, find a mediator to settle significant terms of the for sale by owner sale.
As much as possible, avoid getting the courts involved. But, of course, if this is not the right move for you, get the best lawyer you can afford.
#2 Aim for an even split of the proceeds in the home for sale
We understand this is easier said than done. As expected, terms in divorces are usually muddy. Even if you contributed equally on the real estate investment, it’s a different story when it’s time to divide the spoils.
Each wants a fair share of the property, which is less or more than is actually deserved. This is the common scenario. You need to settle the terms before you move to sell a house privately.
If you can’t compromise outside the courts, a judge will most probably end up resolving the conflict. This can work against your favour. It’s easier to sell the property and divide the equity in half without involving the courts. Sure, you might not get the lion’s share, but a 50-50 split can save you from plenty of headaches and legal fees.
#3 Consider the tax incentive approach when selling a home privately
On the practical side, both parties usually have the most to gain by selling the property before the divorce is finalized. Tax exemptions are different for married and single parties. You might be better off selling a house as a couple.
In many jurisdictions, there’s full discrepancy in tax exemptions between married couples and singles. This is something to think about as you’re figuring out the details of the divorce.
You might be only eligible for tax exemption if you’ve lived in the property for a prescribed period. In many scenarios, the for sale by owner property in question should be your main residence. Confirm with your lawyer in cases where the house in question is a secondary home or simply an investment you never used as your formal residence. Check the local laws.
#4 Selling the home is better than keeping it
You might struggle against this idea, but it’s sound financial advice in most cases. Your income, along with your spouse’s, were taken into account when the property was bought–if you applied for a mortgage. After the divorce, either partner will shoulder the upkeep. This can be too much to handle.
Consider the costs of keeping up with the mortgage principal, taxes, insurance costs, interest rates and utility bills. It might be better to sell for both your economic advantages.
#5 The sale of the No Agent property can be managed in several ways
It’s likely you’ll agree upon any of these three settlements:
- a) One of the parties will buy out the other’s legal interest of the property and take over ownership
- b) Either party gets to keep the home for an agreed period of time, especially in consideration to the children. The sale often follows through when the youngest child reaches legal age
- c) The house goes up for sale on the for sale by owner market as soon as possible, and revenues are divided
Everyone has a lot to gain when a compromise is reached amicably. Consider your options carefully. Going this route is all the more important if you decide to sell the property in a for sale by owner deal.
No doubt there are challenges to reaching a harmonious settlement. But the effort will pay you back a thousand times over.
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- 6 tips if your for sale by owner home didn’t sell
- Top 6 Melbourne suburbs if you’re planning to sell a house privately
- 5 advantages of working with an online agent like us so you can sell a house fast
- Thinking ‘I want to sell my home‘? Here are 5 things you should be telling potential buyers
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