It’s no secret that a divorce can be a messy and emotionally complicated affair. Add a real estate transaction into the mix and you’ve got all the ingredients for a truly stressful situation.
But selling a home in the midst of a divorce doesn’t have to be a stressful matter.
“It depends on each situation,” says Sanjeev Desai, broker of record at Desai Realty.
One of the chief factors is how amicable the split is and how willing the former spouses are to work with another to get the deal done smoothly.
Fortunately for those living in Toronto, the Toronto real estate market is so hot that homes rarely stay on the market for more than a day says Desai.
The ease of selling a home in Toronto also means that if you want to keep your split super private, you can even avoid going through the MLS system. In some instances a real estate agent can help you sell your home privately, says Desai.
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Desai did such a deal for a client recently. In that particular case the home belonged to only one of the spouses, who, in just two years of owning the property, was able to make roughly $100,000 of profit on the sale.
“Because the market is so hot, you can sell it exclusively and advertise it through word of mouth,” says Desai.
Here are several things to consider if a divorce may force the sale of your matrimonial home.
Do you have to sell?
There is an alternative to selling, says Desai. One of you could refinance the home and buy the other out. That would allow you both to save money on legal fees, relator fees and land transfer taxes, says Desai.
But, it depends on which market you’re in, Desai adds.
“If you’re in the Calgary market obviously your house price has gone down so you can’t do this,” says Desai.
“You’re kind of stuck, you’re limited on your options based on how much appreciation your market’s gone through.”
Timing is everything when it comes to selling a home.
Even if you are forced to sell on short notice, Desai recommends avoiding certain months – for instance, July and August, when people tend to leave for vacation.
“It’s very hard to get the schedules connecting,” says Desai, who recommends waiting until September, when the fall buying season kicks off, to put your Toronto townhouse, condo or detached home on the market.
November and December are good months to avoid as well, in the lead-up to Christmas. If possible, it’s advisable to wait until the new year, he recommends.
“Things generally really pick up in the second week of January,” says Desai.
Be mindful of mortgage penalties
Some mortgages carry penalties if you break them early. That can add to the growing list of costs associated with selling your home mid-divorce.
Do your research to figure out what – if any – prepayment penalties apply to your particular mortgage, says Desai. That can help you avoid surprises.
“Those are the things that you have to really look out for in a worst-case, ugly divorce scenario,” says Desai.