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Mark Abzug

Is deferring the sale of your home a good idea as you divorce?

On Behalf of | Nov 16, 2023 | Property Division

For many divorcing couples, the largest asset they need to find a way to divide in their home. Typically, they agree to sell the home and split the proceeds or one spouse buys the other’s share and keeps it.

Sometimes, a couple doesn’t want to sell the home immediately. A divorce can be time-consuming and stressful, and adding another stressor like selling a home may be too much. Further, if one spouse wants to keep the house, they may need time to put together the money and possibly build up their credit to refinance the mortgage in their name or buy out their spouse.

If there are young children, parents may not want to put them through any more changes than necessary. If the kids will be leaving for college within the next couple of years, parents may want to wait until then to sell. 

Sometimes a spouse can’t move right away – for example, if they’re caring for an elderly parent. If the market is particularly bad for home sellers, a couple may decide to keep the home until they can get more for it.

For one or more of these reasons, some couples opt for a “deferred sale.” Let’s take a brief look at how that is handled in divorce.

What do judges consider when asked to grant a deferred sale?

When one or both spouses want a deferred sale, they need to get the judge’s approval. When making the decision, a judge will look at things like:

  • Why the kids need to stay in the home
  • Whether both spouses can manage the mortgage and expenses (particularly the one who moved out)
  • Whether the spouse requesting the deferred sale can reasonably afford the home in the estimated timeframe

If just one spouse wants a deferred sale, the other spouse can make their case for why that request shouldn’t be granted. It’s better, of course, if both spouses agree on it and can agree on terms. That’s one less battle and will make continuing to co-own the home easier to manage.

If spouses can agree on terms, those need to be codified and approved by the court as part of the divorce settlement. If they can’t, a judge may determine that the home needs to be sold or awarded to one spouse. 

There are numerous factors unique to each couple to consider. It’s wise to consult with financial and tax professionals in addition to having experienced legal guidance.