There are many factors to take into account when dividing property in a divorce, and one of the most overlooked is the state of the real estate market. Depending on where a marital home is located, the real estate market can vary tremendously over the course of just a few months. Many spouses are understandably concerned about dealing with these properties in a “hot real estate market,” and deciding what to do with a marital home can be a complex process.
Luck is Often a Major Factor
Firstly, it is important to note that the real estate market is unpredictable. Because of this, luck is often a considerable factor as spouses strive for a positive legal outcome. Due to the unpredictability of many real estate markets across the United States, some negative consequences are virtually unavoidable. On the other hand, spouses may get lucky and benefit tremendously from selling houses at the right time, in the right place.
Real Estate Prices are Soaring Across the United States
All across the United States, real estate values are up considerably. This means that the prospect of dealing with a marital home in a “hot” real estate market is probably the norm for divorcing spouses rather than the exception. In addition, the equity from a marital home is often the main component of a family’s net worth. This all means that dealing with a marital home is probably going to be the most important step for most divorcing spouses who are approaching the property division process.
Weighing the Pros and Cons
The overall choice is pretty simple. Should the home be sold, or should it be kept? For many spouses, the instinct to maintain ownership of the marital home is strong and understandable. After all, this home feels familiar and welcoming. Spouses may also be concerned about forcing their children to leave the residence in which they were raised, especially if these children are already dealing with emotional trauma due to the divorce.
With all that said, keeping the home may be unviable for a number of reasons. Spouses may be unable to qualify for a mortgage on their own. They may also be unable to afford costs like property taxes and other maintenance fees. While other options like joint ownership and spousal buyouts may be viable, many spouses decide that selling is the best option.
Unique Considerations for Selling in a Hot Market
The first thing spouses need to consider is how they are going to “buy back in” after they have sold their home. Spouses may receive a considerable amount of cash after selling, but will this be enough to purchase another home in the same area? If prices are continuously going up, it is important to move quickly. In many cases, it may be necessary to move to a cheaper neighborhood.
Another key concern in a hot real estate market is the capital gains tax spouses will have to pay after selling. Other fees must also be taken into account, such as legal fees, commissions, moving costs, and additional taxes. Spouses can only accurately determine whether they should keep or sell their homes once they have taken all of these factors into account.