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Separating from your spouse is hard enough without considering all the money that goes into a divorce in Texas. One of the common sales during a divorce is the house. Ideally, the couple would work together to sell the home traditionally, but in hindsight, that’s not always possible.
Between considering the time of year and how the housing market performs in your area, it may be difficult to escape the situation quickly. And who wants to be stuck in a home with your ex-spouse for months until the sale?
Selling Your Home Before Divorce in Texas
There are always tax implications that come with a home sale in Austin, Texas. Married couples who jointly own the home can exclude up to $500,000 from profits from the sale. So, if the profit doesn’t exceed this in your capital gains, each partner can end up walking away with more. However, you need to file jointly for this tax year to count.
Ideally, you’d want to pay off your mortgage with your spouse and go your separate ways afterwards. There are options if this isn’t the case.
Bankrate offers some insight to remove a spouse from a mortgage and how to refinance so you’re not underwater by the end of your divorce.
Texas is a fair state when it comes to divorce. If you decide to sell during your divorce, a judge can review your martial home and distribute the property based on:
- Each spouse’s financial circumstances and current jobs (or employability)
- Each spouse’s contributions to the home
- Each spouse’s age, mental, and physical health
- Which spouse has custody of minors in the home
- The value of the home
The judge will likely side with whoever has primary custody of the children after your divorce, but a spouse can always buy out a share or find another way to sell the home. An exception to this, of course, is if neither spouse can afford to keep the home.
Selling Your Home After Divorce in Texas
Each person is entitled to exclude $250,000 from profits from the sale if they are divorced. This depends on whether you meet the requirements and can prove ownership.
But what happens if you aren’t in a good financial position to sell your home?
You could owe more than what the home is worth and selling the home would only result in a loss. The lender has full rights to come after you and your ex-spouse if you owe money.
Selling property through a short sale may be the best solution for your family. Negotiations can be made with the mortgage lender to give up their rights to hold you and your ex-spouse responsible for any balance that is left after the sale.
Doing a Short Sale in Austin, Texas
If you need to sell your home quickly, Your Austin Home Buyer offers an array of options to ensure you leave this situation in the best circumstance possible. We’re particularly experienced with divorced couples in Texas and know this isn’t an easy decision.
Not only can we mitigate the stress between you two, but we can also come to a fast cash offer from an Austin local you can trust. Book a consultation with us and we can work together to find a solution for everyone.