When you are going through a divorce, you can almost guarantee you will encounter stressful and emotional situations. One of those can be having to sell the marital home. It may not be as simple as selling the property and splitting the profits, especially if one party wants to keep the house and the other is keen to sell it - or if both want the house and cannot agree on how to move forward. If you are selling a home in Knoxville due to divorce, here are a few things you need to consider.

Choosing to Sell or Buy Out Your Ex-Spouse

When selling a home in Knoxville due to divorce, you must first consider whether you are going to sell or if you prefer to buy out your ex-spouse and keep it. This is especially common when children are involved, and you want to keep some parts of their lives the same where possible. However, if you go down the buy-out route, a new set of challenges will arise. It is essential that you seek expert advice to guide you through important considerations, including the following:

• Refinancing following a buy put between spouses can be more complex than selling the home
• Deciding how to split the equity in the home can be tricky as you will need to think about a variety of factors, including the outstanding balance on existing home loans and each party’s ability to secure financing on their own
• Whichever party is going to keep the home needs to demonstrate that they are able to afford the cost of loan payments based on their own financial situation

Understanding Capital Gains Tax

If you decide to buy out your ex-spouse’s share of the house, you must understand that the house will be considered part of the divorce. This means it will not usually be necessary to pay capital gains tax. However, if you later decide that selling the home is necessary, you will be liable for the capital gains tax. If you have lived in the home for at least two years, you may be able to offset some of the tax. However, taxes can be complicated, so we would always advise consulting a tax professional when you are selling a home in Knoxville following a divorce.

Moving Forward In 3 Easy Steps

• 1 - Get On The Same Page

  Before making any final decisions about selling a home in Knoxville following a divorce, the first step is to make sure you are both on the same page about how to proceed. Given the circumstances, this can be a big ask, with emotions sure to be running high. It is important to try to keep clear communication regarding expectations. If necessary, you may want to communicate through a third party.

• 2 - Choosing When to Sell

  Once you have decided that selling a home in Knoxville is the way you want to proceed, the next step is deciding when to sell. Are you going to do it before the divorce, during the process, or after everything has been signed and sealed? There are pros and cons associated with each of these options.

  • Selling before the divorce allows each of you to get your fair share of the profit
  • If you opt to sell during your divorce, you will need to work together to decide on the asking price, staging, and how to split profits. This can be tricky while in the depths of divorce proceedings, so it makes sense to work with a real estate agent that you both trust
  • If you wait to sell your home until after the divorce, it is one less thing to worry about, but you will have to agree on who gets the house!

• 3 - Getting The Home Ready For Sale

  Once you have chosen when to list the property, the next step in selling a home in Knoxville is to get the property ready for sale. Start by identifying anything that needs to be repaired and determining if they have to be done prior to listing the property. Many couples decide to sell the house ‘as is’ during a divorce to avoid having to argue over who is paying for the various repairs! You will also need to prepare to declutter, clean, and stage the home to help show it off to potential buyers.

In conclusion, selling a home during a divorce in Knoxville can be a complex and emotionally charged process. Whether you choose to sell or buy out your ex-spouse, it’s important to carefully consider financial implications, tax consequences, and timing. Clear communication and professional guidance from a real estate agent and financial experts can help navigate these decisions and reduce the stress involved. By working together and taking the necessary steps to prepare your home for sale, you can move forward in a way that benefits both parties and helps facilitate the next chapter of your lives.

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Wright Realty is a full-service real estate concierge with a wholistic approach to buying and selling property in East Tennessee. We are your trusted advisor and keep open communication throughout your entire buying/selling process. Real Estate done "Wright" means more than just a 'transaction'.

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Visit www.realtydonewright.com or call 865-556-8599