Benefits of Selling Your House for Cash During a Divorce
By Adrian Pedraza | Sep 11, 2024
Divorce often results in a high financial cost. According to Forbes, the average divorce costs about $7,000, while some complex cases cost over $100,000. But of course this varies depending on the circumstances. Regardless, selling the family home is a viable option to help navigate these financial challenges.
Selling your house for cash after divorce offers several advantages that may appeal to spouses dealing with the ending of a marriage. With a cash sale, they can expect a simplified process, reduced conflict, and certainty of sale. All of these benefits aid in making an already diffucult situation a little more managable.
While the traditional home selling process involves securing a mortgage and waiting for loan approval, cash sales expedite the selling process and provide a more seamless transaction. So, If you’re looking to sell quickly, The California Homebuyer is the cash buyer you should consider. We can provide you with a cash offer within 24 hours and close the property in 10 days. Take advantage of our expert services today and sell your house fast!
Should You Sell Your House Before Getting a Divorce?
In California, divorce involves dividing community property, which is anything earned or acquired during the marriage. The state follows a principle of equal division - community property is split equally between spouses. This includes assets such as investments, income, and even their marital home.
You may agree (or the judge may order you) to sell your house and split the profits from the sale. This is often the only feasible option when neither of you is in a financial position to buy out the other. If your home is underwater, meaning you owe more on the house than it can be sold for, you and your spouse will share equally in the loss.
There’s a major financial incentive you stand to gain when you sell your house before getting a divorce. If you are married and sell a home, you don’t have to pay capital gain taxes of up to $500,000 in profit. If you’re single, the capital gains tax exclusions drop to $250,000.
To be eligible for the exclusion, you must have lived in your house as a primary residence for at least two out of the last five years. If one person hasn’t or won’t live in the home, it may make more financial sense for both parties to sell the house before a divorce is finalized.
The sale will help you write off a larger profit. Couples can apply for this tax break whether they file a joint tax return or if they file separately, so you don’t have to still be married when it's tax-filing time.
In California, if both sellers in the relationship agree, it’s possible to sell the home fast to a local cash buyer. Allowing a cash buyer like The California Homebuyer to buy the home for cash at the offered price is one of the fastest and easiest ways for a couple to sell a house during a divorce.
When going through a divorce, this is the simplest option for putting a residence up for sale. The only things that you and your spouse need to agree with us on are the offer price for which it sells and the closing date.
Benefits of Selling Your House for Cash During a Divorce
The benefits are multifaceted - meaning there is both emotional and logistical relief in a challenging time such as a selling a house during a divorce. Let’s go over some of the benefits:
- Reliability and Certainty
Cash sales provide a higher level of reliability and certainty compared to the traditional home selling process, which may be subject to financing contingencies and potential loan denials.
With a cash buyer like The California Homebuyer, there is a reduced risk of the house sale falling through due to financing issues. That's because we offer peace of mind and assurance that the deal will be closed as planned.
- Cost Savings
Cash sales can also result in cost savings for the sellers. Without the need to pay for appraisals, loan origination fees, and other closing costs associated with traditional financing, sellers can potentially save money on transaction-related expenses.
Additionally, the absence of repair requests following home inspections common in cash transactions can further reduce out-of-pocket costs for sellers.
- Fast Sale
One of the major benefits of selling a house for cash is the speed of the transaction. Cash buyers always have the funds readily available, eliminating the need for lengthy mortgage approval processes causing delays.
A cash sale is particularly advantageous for divorcing couples who are eager to finalize the sale of their shared property and move on to the next chapter of their lives without prolonged waiting periods.
- Convienience and Flexibility
Selling a house for cash offers sellers more convenience and flexibility in terms of closing timelines, possession dates, etc. Cash buyers are often more accommodating to sellers’ preferences and timelines, allowing for a more customized and hassle-free selling experience.
This flexibility is great for divorcing couples who may have specific timelines or needs for their divorce settlement.
- Simplified Process
The process of selling a house for cash is simplified. Without the complexities associated with home inspections, mortgage lenders, and appraisals, the transaction can move swiftly with fewer hurdles.
This simplicity is beneficial for divorcing couples who are already dealing with the emotional and logistical challenges of ending their marriage.
- Flexibility for new beginnings
Some divorces are amicable, but many are not. Arguments over property, assets, and child custody can become complicated. Selling the house for cash may help you lessen the emotional toll by allowing you to separate from a place filled with good and bad memories.
If you have children, selling the house might also make their transition easier. A new living environment will serve as a neutral space, free from the emotional history that your old home holds. It is even possible to move to a completely different environment. This fresh start is invaluable for your emotional well-being as you plan your next chapter. Just choose a house that best suits your new life.
- Financial Clarity
Selling your house and dividing the proceeds can help improve your financial situation after divorce. Neither you nor your former spouse has to worry about the mortgage or the upkeep of the property. Both parties gain a clear economic starting point for their new lives. Additionally, the money from the sale can cover immediate costs like moving and setting up a new house.
A sale followed by dividing the proceeds ensures that both parties receive a fair share of this major asset. This approach eliminates any long-term disputes about the property's value or the fairness of one person keeping the house while the other leaves. So there'll be no complications or lingering resentment.
Selling Your House During Divorce
Selling the house during divorce may not be the best way to go, but sometimes, it’s a necessity. If selling your home during divorce proceedings is necessary to keep the home out of foreclosure or if you need the cash flow in order to pay the bills or legal expenses while your divorce proceeds, selling your home before your divorce is finalized may be your best option.
On the bright side, selling at this stage ensures that your tax exposure is more limited than it would be if you were single, as long as you qualify in terms of residency requirements.
Because divorce filings are a matter of public information, the value of the home can be affected.
Regardless of what your house is worth, buyers recognize that selling a home during a divorce is generally inspired by financial need, and their offers will very likely reflect this fact.
It can’t be overemphasized that divorce comes with a heavy emotional burden, which can be difficult to endure without the added stress of selling your family home at the same time. Generally, homes signify safety and comfort, and letting go of those memories in the home can be more emotionally challenging than you may have bargained for.
Finally, selling a house during a divorce requires you and your spouse to agree on the matter and ask the court for permission to proceed. Many divorcing couples have a difficult time finding common ground on almost every topic, if not all, and this mindset can make selling your home during divorce more exhausting.
Divorce is stressful enough. Make the process of selling the house easier and consider a getting a cash offer from The California Homebuyer. We buy houses fast - just the way they are - in as little as 10 days. There's no need to clean up and we handle all the paperwork.
Can a Court Order the Sale of a Home During Divorce?
The court may order the sale of a house in certain circumstances, usually if the divorcing spouses are unable to reach a mutual agreement on how to divide the property or whether to sell it at all. This is known as a forced sale or partition sale.
When the court orders the sale of a home, it'll try to divide the proceeds in a manner that it feels is fair and just. Courts believe in equitable distribution. Judges will endeavor to divide the profits evenly in community property states, where spouses are each entitled to half of everything acquired during the marriage. The court can also step in during a home sale if disagreements arise during the process, like choosing how much to sell the house for.
Furthermore, a forced sale can be a stressful and daunting process for everyone involved in the divorce process, including the children. The court may take the interest of any minors before ordering a forced sale of a family home. If you're in the midst of a divorce, you may want to try to reach a mutual agreement and contact a cash buyer like TheCaliforniaHomeBuyer for an immediate sale.
FAQ's
Who Gets to Keep The House in a Divorce in California?
If the house is classified as separate property and the other party has no objection, then the spouse who owned it before the marriage has the right to keep it after the divorce.
Can I Sell the House Before the Divorce Is Final?
Yes. If there is a risk the house might go up for sale through foreclosure or one of the spouses doesn’t cooperate, one spouse can petition a judge for permission to start the home-selling process before the divorce gets finalized. It's normal procedure.
Can I Force my Ex to Sell the House After the Divorce?
Usually, courts don't force the sale of houses during a divorce, even when a law exists to do so. Judges only require a trial to remedy spousal disagreements regarding a shared home, and trials can sometimes take years to complete.
Can a Wife Stay in the House After Divorce?
Yes, a wife can stay in the house after a divorce if it is stipulated in the divorce settlement agreement or court order. The court may grant exclusive use of the home to one spouse. This happens after it has considered the best interests of the children involved.
Can You Buy Property When You Divorce in California?
While it's possible to buy a house during the divorce process in California, it's important to consult with your lawyer to ensure you don't give the appearance of attempting to dispose of assets before equal distribution through extraordinary expenditures.
What Happens if One Person Wants to Sell a House and the Other Doesn’t?
If one spouse wants to sell the house and the other does not, the issue may be resolved through mediation or court intervention. The court can order the sale of the property as part of the divorce settlement if an agreement cannot be reached.
Conclusion
Selling a house for cash during a divorce provides divorcing couples with a range of benefits, including a quick sale, reliability, convenience, flexibility, and a simplified process.
Although every home sale situation is unique, considering a cash sale as an option can help hasten the selling process, reduce stress, and facilitate a smoother transition as individuals navigate the complexities of ending their marriage and moving forward with their lives
Divorce is already so challenging, and the last thing you need is the extra burden of selling your home. Choose TheCaliforniaHomeBuyer, the most trusted and reliable cash buyer in California, to sell your house fast. Contact us today to receive a competitive cash offer for your property!
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Adrian Pedraza is a Southern California native with a passion for residential real estate. Since 2016, Adrian has been actively investing in properties across the region. He founded The California Homebuyer, a company dedicated to offering homeowners a quick cash sale option. Adrian's enthusiasm for exploring the diverse neighborhoods and unique pockets of SoCal has made him a local expert in various markets and real estate trends. He has been featured on CNN, U.S.News, Realtor.com, Newsweek, and more.