How Real Estate Transactions Involving Divorce Work
As a real estate agent specializing in helping people during divorce, I know there is no easy divorce – that's for sure. Conversations involving divorce real estate can be tough. Some divorces have better controlled processes, while others may have a lot of emotions associated with it.
What Does a Typical Divorce Real Estate Transaction Look Like?
A typical real estate transaction during a divorce could be selling the house both former partners lived in and then purchasing two homes for the individuals to live in separately. Divorce real estate does not always involve selling a house. In situations where an individual will stay in a home while the former partner moves to another home post-divorce, the real estate needs often involve concerns including (a) where someone lives and (b) how to make that living situation better for them and their children given the financial constraints from divorcing.
Considering the Needs of Children
When considering real estate transactions involving a divorce, it is important to consider the needs of all those involved, including children. At a minimum, a good real estate transaction will at least create short term stability for any children involved. Since divorce is a very emotional experience, it does help to hire a family attorney.
Community Property and Working with Both Parties
Since California is a community property state, a real estate agent will need to work with both parties to gain agreement on any transactions, and both parties will need to sign disclosures, listing agreements, etc. Best practices is for a realtor to copy all parties on all communications.
Timing Your Listing During a Divorce
Divorces happen at all times during a year, but an important consideration is listing timing, especially considering the real estate peak seasons, which in most of the Bay Area are from February to June and August to October.
Important Tax Considerations
Make sure to involve a tax professional when doing a real estate transaction during a divorce, because there are important financial considerations. When selling a house as a couple, the couple gets capital gains tax exclusions of two people, which totals $500,000. However, when selling a house as a single person (post-separation), the capital gains tax exclusion is 250,000.
Privacy and Working with a Divorce Real Estate Specialist
Privacy is often very important to people during a divorce and individuals can tell their real estate agent not to disclose that the reason for selling a home is divorce. It helps to have a realtor who specializes in divorce and is experienced on helping people navigate through a difficult situation. Please schedule a consultation if you have any questions.
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