The home can be seen as a source of financial stress. Selling a home during a divorce can only be done with the consent of the other spouse or through an order issued by a judge. If there will be an agreement to sell with your spouse, you should be sure to have it in writing and signed.
There are several issues to be addressed in the sale of the home including:
1. Who will be the realtor? What if there is a disagreement on the choice of the realtor?
2. How will the price of the home be set?
3. How will the price be reduced, if needed?
4. Who will be the lead contact with the realtor?
5. How are offers handled and should offers be limited to bona fide offers? Who decides what a bona fide offer is for the home?
6. Which spouse will ensure that the home is shown to prospective buyers?
7. Is there an agreed upon amount if offered that will result in the acceptance of an offer?
8. Are there liens or encumbrances against the home? If so, how will they be paid during the time that the sale is pending?
9. What will happen to the sales proceeds?
10. Are there any reimbursement claims for repairs or down payments on the home?
Certainly, the home should be sold if there is a threat of foreclosure. It can be sold to fund the divorce litigation, too. Of course, there might be tax consequences stemming from the sale. Please consult your tax advisor for advice.
If there is no equity in the home, you should have a discussion with the realtor about a short sale or a deed in lieu of foreclosure. But, as with a more generic sale of the home, you should consult your tax advisor for advice.