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Considerations for selling the family home during your divorce

Nobody marries with the intention to divorce. Unfortunately, not all Ontario couples are destined to live happily ever after, and regardless of the reasons to end a marriage, it will almost always be a daunting process. If you are in the throes of a divorce, you will likely find that at least one adviser will tell you to leave emotions at the door and deal with the process as you would with a business transaction.

Typically, one of the most contentious and emotionally challenging areas of a divorce is the division of the marital assets. How divorcing spouses handle any shared real estate properties during this time, especially the potential selling of the family home, can have a drastic impact on each party's financial future.

Selling the family home

If you and your soon-to-be ex negotiated and agreed that you will sell the family home and share the proceeds, you may want to consider the following aspects:

  • The cost of comparable housing: Consider your share after the sale of the house. If for example, after settling the outstanding mortgage, you each receive $750,000 -- how comparable will the accommodation that you can get for that money be? Will it put you in a small condominium in the suburbs, or could it potentially force you into a life that is filled with debt if you are aiming to maintain your existing lifestyle?
  • Transaction costs: When planning the sale of the family home, consider the costs associated with such a transaction. To break the current mortgage could involve a significant fee, and along with land transfer taxes, realtor commissions, removers and legal fees, you could lose up to 10 percent of your funds.
  • Time the sale: Selling in a robust real estate market can be a significant advantage. When there is no scarcity of buyers, you may have more chances of getting your asking price without haggling.
  • Avoid mentioning the divorce: If buyers know that your reason for selling is a divorce, they may study public court documents. That could show your financial situation along with the minimum required price if the bank ordered the sale. To disguise the fact of the pending divorce, some people even ask the spouse who has moved out to leave some clothes and other objects around the house.

Build a professional support team

If you are already facing or contemplating the end of your marriage, the decisions you make at this time can affect your post-divorce financial stability. Having an experienced divorce lawyer at the head of your divorce team may prove invaluable. In addition to guiding you through all the aspects of the divorce process, your lawyer may be able to arrange additional support such as a real estate adviser to provide extra assistance during this challenging time.

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