Are you going to get a divorce soon or have you just divorced and you ask yourself is it the best house to sell before the divorce or after the divorce? Then it is important to know what to look out for if you want to sell your house after the divorce.
Sell house after divorce
If you are married without a prenuptial agreement, the house belongs to you together. Then you share the proceeds with the sale of a house after divorce.
Do you have a registered partnership or are you married with a prenuptial agreement? Then the house is yours together if the house was bought by you together or by 1 of you during your marriage/registered partnership. The proceeds when it is decided to sell a house after divorce are therefore for both partners.
If you bought the house alone before you became a registered partner or before you got married under a prenuptial agreement, then the house is yours alone. This means that the proceeds or debts from the sale of the house after the divorce are yours.
Whose house belongs to the unmarried?
Did you break up without getting married? In that case, you may have included a division clause in the purchase agreement.
The division clause regulates what happens to the house after the house is sold after the divorce. It is also possible that you have drawn up a cohabitation agreement with the civil-law notary and have agreed upon such agreements in it.
Do you find it difficult to figure out everything surrounding the sale of your house after the divorce? Then a mediator or divorce lawyer can help you with this, without having to cost you a lot of money.
Valuation when selling a house after divorce
Once you have decided together who can stay in the house and buy out the other person (or if you are in doubt as to whether you should divorce or sell the house first), it is first important to have the value of the house determined. You have this done by an independently recognized appraiser (we as VK Makelaars & Valuers can help you with this ).
What we often see is that a second independent appraiser is also called in when selling a house after a divorce. However, for what amount you buy out the other person is something that you try to agree on together. It can be smart to agree in advance that the value of the home (on the basis of which the buyout price is determined) is the average of the 2 valuation reports.
Always make sure that you select the appraisers together and that you are also present at the recording. Also ask the appraiser any questions you want about how he/she arrives at the value and what he/she pays attention to. We help many people with divorce appraisals and know from experience that ‘doing this together’ and being present together at a valuation recording leaves a nicer feeling during the divorce. This can be done with the sale of a house after divorce or with the sale before the divorce.
Is buying out possible?
In the event of a divorce, there are 3 options for housing the partners:
- Partner A leaves the marital home and is bought out by partner B
- Partner B leaves the marital home and is bought out by partner A
- Both partners leave the marital home and the house is sold
Once you have come to an agreement about who will sell his share of the house after the divorce and for what amount, it is time to see whether this is financially feasible. In other words: will the bank cooperate with this?
It is really important to know that buying out in divorce does not always work. If a house has been bought in the past 10 years, the mortgage is usually fully borne by 2 incomes. It often becomes more difficult to keep the house in the event of a divorce.
If there is 1 main breadwinner and it has been decided that he will remain in the home, the question is often whether it will be possible to keep the home. After a visit to the mortgage advisor, it often turns out that buying out is not possible, despite the fact that the buying out partner thinks it will be easy to pay.
That goes like this:
Suppose someone bought a house with his partner 10 years ago for €200,000 and that same house is now worth €400,000. They get divorced and the woman wants to sell her part of the house after the divorce and the man wants to buy the woman out.
This means that the woman must receive € 100,000 and the man must increase the mortgage by this amount. But if their current mortgage is interest-only (which almost everyone did 10 years ago), then €100,000 of that 200,000 must be converted into an annuity mortgage.
By buying out the woman, the man acquires half a house and the new mortgage right applies to this part.
The mortgage then goes from €200,000 interest-only to €200,000 annuity and €100,000 interest-only. This would significantly increase the monthly mortgage payments for the man.
Our advice would therefore always be to immediately talk to an independent mortgage advisor. So not directly your own bank, but really with an independent advisor who can ‘shop’ at other banks based on your financial situation.
It may be that a bank feels that the surviving partner is not liquid enough to be able to bear the mortgage on its own. Avoid surprises and call in a good mortgage advisor in good time.
If you need help with that, we can assist you with mortgage advice .
Payment of the mortgage in the event of a divorce
If you jointly own the house, you are jointly and severally liable for (continuing to) pay the monthly mortgage.
If one of you goes to live elsewhere, he or she is often entitled to mortgage interest deduction for your marital home for another 2 years. Even if he/she has already bought another house. In many cases, the interest that is then paid (by the ex who no longer lives there) + the amount of the notional rental value can be specified as spousal maintenance.
Please note: the amount of interest that you may deduct for tax purposes on the marital home where you no longer live depends on the share in the ownership of the home and in the home acquisition debt.
Selling the house (together) after divorce
It is often decided to sell the house after the divorce. If you are going to sell the house together, make sure that as much as possible you look for a sales broker with whom you both have a good feeling.
The selling broker represents the interests of both partners. My own experience with selling after a divorce is to make good agreements in advance about what a good sales proceeds are. This is how you do that.
The real estate agent must make a proper valuation (simplified appraisal) of the home and properly substantiate the value he gives with ‘reference properties’. These are recently sold comparable homes in the area.
A good sales broker also sends a sales plan along with this sales proposal. In this he proposes a strategy and asking price to sell the house as well as possible. This valuation and this sales proposal (at least at our office) are always free of charge and without obligation.
Especially when selling a house after divorce, it is very smart if you go through this sales plan together with the real estate agent. It is also important that good agreements are made at which sales price both partners would agree to the sale.
If you do not do this, you run the risk that there will still be disagreements between the partners, whereby 1 partner prefers not to sell and stays put and the other partner does want to accept a certain offer.
Sell your house first or divorce first
In the event of a divorce, the question is also whether it is important what you do first. Either sell a house first or divorce first. The house does not necessarily have to be sold before the divorce.
However, physical things can lead to problems in a divorce, as these can often not be fairly distributed. Money is, in contrast, much easier to distribute than physical products to which both parties attach (emotional) value.
The answer to the question of whether to sell a house first or to divorce first is not clear. Selling a house before a divorce can make it a bit easier, but as mentioned before, there are also other options. Then sell your house first or divorce first.