People who own a home and are going through a divorce may decide that selling the home is the best option. This brings up several points that must be addressed during the property division process.
Selling the home can considerably impact the distribution of assets. There are significant points to consider about the sale and there should be a clear plan about what’s going to happen when it’s sold.
The home sale process
The first step in this process is evaluating the factors that can impact the home sale. This includes things like the value of the home, current market factors and the outstanding mortgage. There must be clear guidance about what monetary amount is acceptable by both parties for the sale.
Ideally, the amount the home sells for will be equal to or more than what’s outstanding on the mortgage. If the home will sell for less than the mortgage balance, it will either need to be approved for a short sale by the bank or both parties will have to agree on how to pay the remaining mortgage so the sale can occur.
After the home sells
Once the home is sold, the mortgage balance must be paid. Anything that remains after the balance is paid can be used for other purposes. This may be to pay off joint debts so neither party has to worry about those after the divorce. Alternatively, both parties may opt to split the leftover proceeds.
There may be additional considerations, such as tax implications. Working with someone familiar with these matters is critical because there are so many factors that must be taken into account.