If you’re going through a divorce, you’re understandably under financial and emotional stress, and probably wondering what your best options might be.
Take the example of a local Sacramento couple, George and Diane. George and Diane were in the final stages of finalizing their divorce and had agreed to joint custody of their two young boys. While Diane had already moved out, everyone agreed that it would be best if George remained in the house to maintain consistency for the children.
Unfortunately, both George and Diane quickly realized the financial difficulties of juggling two households while having to pay additional divorce expenses like lawyers, moving costs, down payments and child support. They faced the harsh reality that they needed to sell their house — and quickly.
But, is selling your house during a divorce a good idea? It can be. Chances are, your divorce agreement will simplify your community property distribution by requesting that you sell your house and divide the proceeds according to the agreement.
Selling your house during a divorce can be a hard choice to make, but it can also give you the opportunity for a fresh start. Selling your house for cash to real estate investors instead of putting money (that you often don’t have) into repairs or “curb appeal” improvements like landscaping or a fresh coat of paint can often be the simplest, quickest, and best financial decision. After all, Sacramento’s home buying market is expected to grow, but not rapidly. Your home could stay on the market for a long time, especially if repairs are needed.
Responding to financial stress during a divorce
Mortgage payments don’t stop when one spouse has moved out of the house during a divorce. Who is responsible for making the mortgage payments during the divorce proceedings? If you’re staying in the home but don’t have enough money to make mortgage, insurance, and property tax payments, what are your options? If you’re the higher-earning spouse, how can you realistically cover the costs for two households while you’re splitting up?
These complicated financial matters are the reason divorce lawyers are needed and why divorce agreements are important to both parties. Your attorney may suggest that you make an agreement with your ex- to sell your home and divide the proceeds. You can stipulate your agreement to sell the home and include it in your divorce decree.
Why is it important to work with experienced real estate investment professionals when selling your home during a divorce?
California law regarding divorce is complicated, and there are many questions to answer. First, California is a community property state, which means that the court considers that any real estate you bought or money you received during your marriage belongs to both you and your ex.
Second, you will need to provide a statement of your income and expenses to the court during the divorce proceedings. The court can make decisions based on the information you and your ex provide, but you also have a choice to simplify things during the process. The legal term is “stipulate,” which means you and your ex agree to divide your assets and present the plan to the court. If you and your ex stipulate that you want to sell your house during the divorce and divide the proceeds, this helps to simplify the process and eliminate unnecessary legal fees during a court battle.
Traditional home sales processes are often hard to shoehorn into a divorce. When you put your home up for sale on the real estate market, who will set the price? Will you or your ex be the one to negotiate with potential buyers and the realtor? What if more than one buyer makes an offer on your house, or you enter a negotiation for the price?
Traditional real estate listings and offers from buyers who are qualifying for home mortgages take between three to six months on average, and can last longer. Some homes in Sacramento’s real estate listings have been on the market for a year or longer.
is it better to sell a home before or after a divorce?
Working with real estate investors who can pay cash for your house during a divorce has several practical advantages. They include:
- No need to arrange showings of your house between you and your ex
- No need to call your ex and discuss offers on your house
- A much shorter time frame to complete the sale
- No need for contingent offers or back-up plans if the initial buyers aren’t approved for their loan
Even though it’s not common, there are some investors who offer additional flexibility to help you make the best out of a tough situation. It’s always best to ask questions before you accept a cash offer to find out when you will get your money and to see if there is any flexibility with the move-out date.
For example, Serge Kucher, the founder of Property Sales Group has worked with many divorcing couples who have a compelling reason to stay in the house even after the close. Whether it’s for financial reasons, to help children transition more easily, or even to make moving arrangements, Property Sales Group often helps people get their money even before the closing — and can allow you to stay in the house up to 6 months after the close is complete.
Bottom-line. You always have options…you just need to ask if they are available.
Can I sell the house before the divorce is final?
Yes, you can sell the house before your divorce decree is final. Selling the house can be stipulated as part of your divorce. Of course, you will need to put your home sale in writing. This is another reason why you should work with experienced real estate investors. Selling your house is the first step in liquidating your assets to divide them in the divorce process.
Who are real estate investors?
Real estate investors are professionals who specialize in buying homes for cash, doing necessary upgrades and/or repairs, and then selling the refurbished homes. This is their business and livelihood. In Sacramento, for example, Property Sales Group is a leading real estate investment company that has helped thousands of homeowners sell their homes quickly, as-is for cash.
The entire process can be much faster than listing your home with a real estate agent. You can receive a quote for your home’s cash sale following a short walk-through of the property. You can also use the quote as part of your divorce process. If the quote is acceptable to you and your ex, it can be stipulated as part of your divorce agreement.
Sometimes, real estate investors (like Property Sales Group) have their own in-house construction teams, which means they have the ability to buy materials, make necessary repairs and upgrade your house more quickly for a lower cost.
For you, that means the investor can offer you more money for your house than a company that can’t handle the construction repairs.
How do you know you’re getting the best offer for what your house is worth?
It’s always best to weigh all your options and ‘do the math’. What may look like a higher offer initially, may not always be the best deal.
Let’s go back to our example of George and Diane. The couple originally contacted Serge Kucher at Property Sales Group — as well traditional real estate agents — so they could better understand what their home was worth and how much money they could get.
While George was ready to accept the cash offer immediately because the terms would allow him to stay in the house for 2 weeks after the close (rent free), Diane wanted to hold out and see if they could get a higher offer from the home via a traditional sale.
To better understand their options, George and Diane ended up getting additional price quotes from several real estate agents, some of which were almost $30,000 higher than the cash offer.
But, George and Diane did the right thing. They subtracted what they would have to pay for necessary repairs, the realtor’s commission (~5-6%), escrow costs, title costs, and transfer taxes (for the city and county). The difference between the real estate agent’s estimate (for what they could sell their house) and the cash offer was only about $1,000.
Most importantly, the instant cash offer was 100% guaranteed to close without out-of-pocket expenses. The sale would be complete in 2 weeks or less, George could stay in the house to make moving arrangements and the couple was able to settle the divorce more quickly and easily without adding to their financial debts. It was a win-win for everyone.
How will I receive my money and how does the process work?
Once you receive a cash offer on your house, the escrow process begins. Escrow is the name for the third-party process that accepts the money for the sale of your home, and ensures that all parts of the transaction are completed properly and legally. At the end of escrow, your money will be wired into the escrow account. You can get the money wired into your bank account or in the form of a check on the day that escrow closes.
Any reputable firm that buys your house for cash should offer some guarantee that the deal will go through. An experienced investment group should be able to handle the entire process in 2 weeks or less. For example, Property Sales Group guarantees your house will close at the end of escrow, or you get $5,000 money back, which means you have nothing to risk by working with them.
Selling a house during a divorce doesn’t have to take years or cost a lot of money
You may have heard about couples who’ve argued over the sales price of their former home for months or even years. Your house may also need some repairs, and you’re ready to move on with the next phase of your life, not start home renovation projects. When you’re ready to sell your home for cash during a divorce, you’ll want to work with a company that’s sensitive to your specific situation.
You can simplify the process and move your divorce along much more quickly by working with real estate investors.
Working with a trustworthy, caring, and above-the-board company like Property Sales Group can save you thousands of dollars over the traditional real estate listing and sales process. In addition to saving the 6% commission, don’t forget you’ll need to pay to your selling agent and the buyer’s agent. Selling your house for cash also means you’ll save on appraisal fees and other costs associated with selling your home via a real estate agent.
Property Sales Group has helped thousands of families in Sacramento to sell their homes for cash. You can get a big advantage and a head start on the rest of your life if you sell your house for cash during a divorce instead of waiting for the divorce decree to be final. Reduce your stress and get results quickly by working with the reliable and caring professionals at Property Sales Group.