When you and your spouse make the decision to divorce and own a home together, you have options. You might decide to sell the home, or one of you may try to refinance the mortgage to exclude the other party. If you decide to sell your house, you face another important decision: When does it make the most sense to sell it?
There is no one-size-fits-all answer to this question. However, developing a sense of the advantages and disadvantages associated with each option may help you make an informed decision.
Pros and cons of selling before a divorce
If you need to put down a down payment or security deposit to move somewhere new, you may want to consider selling the home before your divorce becomes final. This may prove especially wise if you have considerable equity built up in the home. Selling your house may also help you cut the emotional ties you may still have to your former partner.
On the flip side, if your home does not sell easily or smoothly, it has the potential to delay your divorce. It may also cause discord between you and your ex if you have different opinions about how much to ask for it.
Pros and cons of selling after a divorce
Selling the home after your split may give you and your ex time to calm down and work better together on the sale. However, by selling after your divorce finalizes, you and your ex may face sizable capital gains taxes.
There are many considerations involved when determining the most favorable time to sell your home. The strongest option for you is going to depend on the specifics of your situation.