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Selling Real Estate During Divorce or Separation - Valuable Tips

In the event of a divorce, the spouses must divide their assets. However, if there is no agreement on the separation of property, all assets are considered community property and must be divided equally between both parties. The division of shared property can sometimes be difficult to determine, as it is not always clear what type of property each party owns.

Questions upon questions: Who is or remains the owner? Should the house be sold or the spouse bought out? What does the process look like Real estate sale during a divorce? Can this already take place during the year of separation? Who assumes responsibility for ongoing financing obligations? Below, effective and cost-efficient strategies are explained to ensure the smooth sale of the property during a divorce. Is it already possible during the year of separation? Who is liable for further financing? The following explains how to handle the sale of a property as smoothly and cost-effectively as possible in the event of a divorce. First of all: There are different ways to deal with the house, apartment, or plot of land.

What is the procedure for a divorce?

Before a divorce is possible, the spouses must complete the year of separation, meaning they must have lived separate and apart for at least one year. An exception is a hardship divorce. As soon as the divorce application is received by the family court, it sends it along with the forms regarding the equalization of accrued gains to the other spouse.

When the equalization of accrued gains is completed, the court schedules a divorce hearing. The family court judge asks the spouses whether they wish to be divorced. A „yes“ from both sides seals the dissolution of the marriage. The judge then pronounces the divorce decree, which becomes legally binding after one month if no one appeals. During the divorce proceedings, there is a mandatory requirement for legal representation in court, which means that at least the applicant must be represented by a lawyer.

The role of selling a house in financial reorientation after a divorce

After a divorce, the sale of the property is often considered, as this offers various advantages for the former spouses. The disposal transaction relieves both of them from the debt, which are often associated with the property. The monthly loan repayments no longer apply, and the ongoing maintenance costs for the house or apartment, which were previously paid together with the spouse, must now be managed alone. This can often present a significant difficulty.

At Upon the sale of the property, the proceeds are divided equally between the spouses. and both remain liable for the mortgage for the property after the divorce, provided that they signed the contract with the credit institution together. If the house or apartment was financed through a joint mortgage in the event of a divorce and a joint loan agreement was concluded, these obligations can be paid off by selling the property. The option of selling the property is often considered the least problematic solution. For many couples, it is easier to rebuild their lives after the divorce if they have the proceeds from the sale of the property at their disposal. Of course, due to the changed living circumstances resulting from the divorce costs, a smaller apartment often makes sense.

What tips are there for selling a house due to a divorce?

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Question: When should the house be sold?

Answer:

Many spouses who want to divorce wonder when the ideal time is to sell the property. Should this happen as quickly as possible or only after the divorce? A general piece of advice is: Ideally, the house, apartment, or plot of land is sold as quickly as possible, because the money is already needed in the year of separation and can be used, for example, for the upcoming equalization of gains.

Therefore, it is already possible to search for suitable buyers before the year of separation has expired. The advantage is that when there is no time pressure involved in the property sale, the selling price is usually significantly higher than in the case of transactions that are rushed and executed under time pressure.

Question: What needs to be considered regarding the use of the house during the year of separation?

Answer:

While the new owner is being sought, both spouses have the option of living in the property if they wish to do so. A divorce does not necessarily involve a physical separation, as economic and social factors play an important role here. The couple is considered separated when each person manages their own expenses, cooks, eats alone, and the bed is no longer shared. No one has the right to demand that the other move out. This is only possible if one partner is the sole owner of the property.

After the end of the separation phase, by the way, every partner has the right to sue for the sale of the house if no agreement has been reached by then. A forced auction should be avoided at all costs, as the sale proceeds achieved are far below the actual value of the property. It is therefore the worst solution.

Question: Why is it better to choose a real estate agent for selling a house?

Answer:

If a house sale is planned, the selling price must be determined and the house sold. To ensure that neither partner later claims from the other that the process was unfair, it is recommended to Not selling the house yourself, but with a Real estate agent to commission. This avoids unnecessary disputes, as the separation phase is emotional enough as it is.

A impartial, expert broker is the ideal intermediary between the married couple. He also takes over all arising tasks, creates an exposé, takes photos, conducts viewings with potential buyers, and answers their questions. During the sales negotiation, it is advisable anyway not to state the divorce as the reason for selling the house or apartment, because this „emergency situation“ can have a negative impact on the selling price and the entire transaction, as interested parties like to take advantage of such things.

Question: What is the situation if the property was once inherited?

Answer:

If the property was financed with an inheritance, it is advisable for a notary to confirm this. This is the only way the respective spouse can be certain in the event of a divorce that these amounts will be credited to them when calculating the corresponding equalization of accrued gains. As a general rule, anyone who brings a house into the marriage or buys one during the marriage should find out early on about the potential consequences of a separation and divorce. A prenuptial agreement helps to avoid unnecessary disputes and trouble. This can also be concluded after the wedding.

Question: Can the property be gifted to the child?

Answer:

In principle, it is possible to transfer the house, apartment, or property to the child in the event of a separation. A piece of real estate is often passed on as an inheritance if it holds special emotional value for the family, for example, if it has been in the family's possession for a long time or is associated with special memories. Both spouses must agree, and the child must consent to the gift of the property. Incidentally, real estate can also be signed over to minor children. However, the guardianship court is involved in this process, as the transfer of ownership requires its approval.

How can the speculation tax be avoided after a divorce?

To avoid unpleasant surprises during a real estate sale, it is important to statutory taxation to keep in mind. First, to check whether 10 years have already passed since the acquisition of the property. If this is the case, then they must [the so-called...]. Speculation tax not pay to the tax office. The taxation relates to a surplus that they achieve from the sale of a rented property.

Should not have been yet ten years since the purchase of the real estate, it must first be examined whether a speculative profit is to be expected at all. To determine this, you should compare the acquisition costs and the costs for the construction of the property with the expected proceeds from the sale. The incidental purchase costs are counted among the acquisition costs. If your property is characterized by a good location and is situated in an area where purchase prices have risen in recent years, taxation is probable.

The speculation tax can be reduced or even completely avoided if you renovated or modernized the house or apartment after moving in. If this is the case, you can offset the costs incurred in the first three years. This is so-called acquisition-related capital expenditure, which reduces taxation. However, standard cosmetic repairs do not count.

It is advisable to speak with a tax advisor to avoid potential tax pitfalls. For ongoing loans, you should also pay attention to Prepayment penalty fees that the credit institution will charge for the early termination of the mortgage loan.

The speculation tax only applies to rented properties and not to owner-occupied real estate. The sale of a primary residence falls under private disposal transactions in accordance with Section 23 (3) sentence 5 of the German Income Tax Act (EStG) and is exempt from the speculation tax.

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Conclusion

Economic conditions significantly influence the decision to sell real estate in the event of a divorce. Often, selling a house or an apartment is inevitable in order to minimize divorce costs. Disputes should be avoided, as they can become an expensive affair for both partners after the separation. Since the house, apartment, or a plot of land constitutes an asset, it plays an important role in the equalization of accrued gains: Each partner owns half of the property and therefore, after the sale, each is also entitled to half of the proceeds.

Summary of the most important information

Without a prenuptial agreement, both partners have a fifty percent ownership share in the house.
Partition auction occurs when disagreements during the separation period are not resolved.
The property can be sold or one of the spouses will be bought out.
Liabilities, such as the mortgage, are borne jointly by both partners.
Get your property evaluated before the sale.
Your house, apartment, or property can be offered for sale even during the year of separation.
Foreclosures can lead to very high losses in value.
When filing for divorce, it is possible to pass on your real estate to your mutual children.

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