While many people have an emotional attachment to their home, divorcing couples need to set their feelings aside so they can make the decision that is right for their finances and their post-divorce life.
According to U.S. News, couples may have a number of options for their jointly owned house.
Selling the house
If current conditions favor the seller, the couple may want to put the house on the market right away and divide the profits. However, potential costs associated with selling a house include repairs, real estate agent commission and others. The average expenses take around 10% of the sale price.
A spouse who opts to keep the house and then decides to sell later may end up with less than he or she expected. The tax consequences could be considerably greater and result in less profit than if the couple had sold together.
Keeping the house
A couple does not necessarily have to fight over who will own the house. They could continue to own it together and have the primary caregiver live in the house with the children. Then at a later date, they could sell it. This may be a good option if the housing market does not currently favor sellers.
In some cases, the couple wants the children to have the stability of a single residence. Parents may try nesting, where they acquire a second residence together and take turns living in the house with the children. This option has a number of potential pitfalls as it requires couples to be able to communicate well and avoid disputes. It may be a temporary solution while waiting for the housing market to improve.
Kiplinger warns that a spouse who wants to keep the house will need to refinance, and that means qualifying for a mortgage based on his or her own income. Keeping the house also means including maintenance, repairs and taxes in the post-divorce budget.