Deciding to sell or buy a house when going through a divorce can be a challenge. An article recently shared on The Washington Post explains that in divorce, it is easy to become attached to assets, especially a home. However, that emotional attachment may not lead to the most financially responsible decisions. Inspired by the article, below I offer you questions to consider and the steps to take before making a decision to buy or sell a house when going through a divorce.
Questions to ask yourself
- What does your situation look like from a financial perspective?
- By assessing your divorce through a financial perspective, rather than an emotional perspective, you will be able to set yourself up to make a responsible decision.
- Are you emotionally attached to your property?
- Going through a divorce is naturally an emotional process. However, by assessing your situation only through an emotional perspective, you could be blind to the other factors that will negatively impact your situation once the divorce has been settled.
- If you sold the property, what would you do with the money?
- For instance, developing real estate can be an expensive task, and by selling your home, you might be able to find another property that does not have the emotional ties your current one has. This will allow you to potentially save money if the newer property is cheaper.
Steps to take when deciding to buy or sell a house
- Tally up your assets (real estate, investment accounts, each spouses' 401(k), retirement accounts, and other miscellaneous assets – artwork, carts, cash, etc.);
- Determine if you would be better off by receiving the cash from selling your home or by depending on the estimated value of your property;
- Consider the costs of your divorce attorney and tax preparer when they are offering you support throughout the decision – if it becomes a long fight between yourself and your spouse, you may end up paying fees that could be similar to the profit of selling your home.
Frequently, individuals do not take enough time to carefully weigh their options through a financial perspective to ensure the correct decision is made when settling a divorce. By considering the questions and taking the steps above, you will be setting yourself up for financial success. If you are going through a divorce and contemplating selling or buying your home, please contact me for further assistance.