Divorce is an unfortunate situation that can affect a home sale as well as the couple. There are implications for the couple attempting to liquidate their shared asset as well as any individuals who may want to purchase the property.
Implications and challenges for sellers
Divorcees first have to determine their goals for the home, and at times these objectives are in direct opposition. Both parties may be willing to sell, pay off the mortgage and split the profit. On the other hand, neither half of the couple may want to part with the home, or one may want to hang onto the property while the other would rather sell. Regardless of the proposed path, there could be some obstacles.
Here are some of the challenges for selling the home:
- There must be a mutual agreement for the list price.
- The property may not be able to sell in a short time.
- If the home is currently underwater, there will still be an amount to be paid for the mortgage following the sale.
- If the homeowners are able to get rid of the house via a short sale, their credit will be negatively affected.
- During the time while the house hasn't sold, the couple is still paying for maintenance and other expenses but may be living in different locations.
Should divorcees sell?
The answer to this question is largely dependent on the equity in the home and whether the couple can reach a compromise. Some divorcees decide to refinance in the name of one spouse, and others determine it's best to keep the property and rent it out. The former is a good option in the case of one half of the couple wanting to sell if the spouse who wants to keep the home can qualify for the refinance.
Implications and challenges for buyers
Home buyers who are looking for a quick sale stand to benefit from a property listed by a couple that is divorced. Given that the couple is attempting to relieve itself of the shared asset, there's little incentive for the sellers to delay the sale. This could mean an affordable price and few counteroffers during the negotiations. In some cases, couples are willing to throw furniture and other items into the deal in the interest of finally completing the transaction and moving on their their lives.
However, these benefits could be constrained by the personal squabbles of the couple. If one spouse is willing to sell but the other would prefer to keep the house, the latter may attempt to stall or sabotage the transaction. This could include attempts to force a negative report from the home inspection or delay the closing.
There are adverse consequences of these circumstances. After some time, buyers could lose the interest rate they locked in with their lenders. Time and money could be invested in the transaction for it to fall through in the final stages.
Should buyers purchase from divorcees?
Depending on the sellers, buying a home from a divorcing couple could be one of the easiest home sale transactions. However, the possible obstacles can present serious setbacks for home buyers.
Real estate agents can inform buyers about the reasons sellers list their homes. It should be noted that some sellers may attempt to hide this detail to give the appearance that the property is a happy home.
If buyers decide to go through with the deal, they should ensure their offer and contract include statements that protect them in case of any mishaps.