Divorcing and Selling the House? Ways to Get Your Marital Home Sold During the Divorce Process

by | Feb 28, 2018


Who Gets the House During a Divorce?

One of the first things you’ll need to address is- who technically has ownership of the house and “gets the house” during a divorce? In most cases, in a community property state, you and your spouse will split all assets in half. So, this would mean that you and your spouse are entitled to 50% of the equity in your marital home. But, when was the home purchased and how was the property acquired? This is very important. A judge is not able to award “separate” property of yours to your spouse. Separate property includes property that was inherited or gifted to you, or that was acquired before the marriage took place. So, if you bought the home you and your spouse lived in together before being married or you inherited it from your parents who passed, your spouse is not entitled to half.

It’s possible for one spouse to be awarded your joint marital home during a divorce, depending on factors like the financial circumstances of each spouse, the home’s value, who has custody of the children, and more. Or, if you and your spouse choose, you can divvy up your assets without the help of a judge and you may decide together that the marital home will go to one of you.

Selling Before the Divorce is Final

If you sell your home before the divorce has been completed or finalized, then you’re looking at a split of the proceeds, or equitable distribution. If you find yourself in a situation where you’re selling at a loss, then you and your spouse will share the debt. In some cases, your attorney may be able to negotiate a short sale with your lender, which would allow you and your spouse to part ways and would remove the burden of the mortgage from your plate. The caveat to trying to sell before your divorce is final is that real estate transactions, like divorces, can be lengthy and unpredictable processes. The chances of both concluding simultaneously are slim.

Selling After the Divorce

Most people want to be completely separated from their spouse in every way possible following a divorce. This definitely includes getting rid of the house that you both owned together. But, in some cases, this isn’t your best option financially if the market isn’t conducive to selling and you may want to hold off until values increase and you can make more from the sale. In this case, you’d both retain title to the home and would need to decide whether you’re going to live in the house until it’s a better time to sell (if one of you can afford it) or rent it out. This can make an already tough situation more difficult, as it may be hard to agree on the “best option.”

Factors to Consider When Divorcing and Selling at the Same Time:

Below are some of the things you should consider when looking to sell during or after your divorce. These factors will help dictate which options are best for you in ensuring a clean break, with less harm.

  • Who will live in the house until it sells? You will be paying the mortgage still, so consider who will be residing in the home until you are ready to sell. If you have children, the custodial parent is usually the person who opts to stay put and avoid uprooting the kids before it’s necessary. In other cases, if the divorce is more amicable than others, you and your spouse may be okay with inhabiting the same home during the divorce and sale process. This is usually the most cost-effective option for both spouses, but certainly not always ideal or easy. The other option is to both move out and rents the house to a tenant. This can be a positive in that if the rental market is strong, you could actually generate some extra revenue to help pay lawyer fees. On the other hand, showing a house and scheduling an open house around tenants can be tricky (plus you aren’t in control of how well the home is “staged” and cleaned).
  • Who will pay the bills? Are you both still splitting the mortgage, or will one of you assume the responsibility of paying? If one of you chooses to pay the mortgage, your marriage decree or agreement will usually state that that person is to be reimbursed for those payments at the time of the home’s eventual sale. It would be wise to include a provision in your marriage agreement that determines what happens when a spouse doesn’t pay the mortgage. If you’re in a bitter divorce battle, your spouse who is supposed to pay the bill may avoid paying the mortgage in an attempt to sabotage your credit. If this happens, you’re best off just making the payments to avoid the damage and then deal with the repercussions/payback later.
    • Additional home expenses: Ensure that your marriage decree also covers additional expenses related to the home, such as repairs. It’s not uncommon to need to fix a few things before listing your home on the market – so who will foot the bill when this happens? Ensure all of these details are outlined in your agreement so you don’t get stuck paying in the end.

Another factor to consider is the tax implications of selling a home during a divorce. Just because you’re getting divorced, doesn’t mean you’re exempt from paying capital gains tax. Here’s more on what capital gains taxes you can expect to pay from the sale.

Make it Easier to Sell During a Divorce

One of the hardest things about selling during a divorce is that you’re combining two of life’s most stressful events, into one. Both going through a divorce and going through the sale of a home can be emotionally, physically, and financially taxing on everyone involved. And, this is for many reasons. For one, it’s hard to agree on anything when you’re getting a divorce. For two, your home holds a lot of memories and is a symbol of your relationship together with your spouse. For three, selling requires a lot of prep, paperwork, repairs, and even money. All of these things combined can provide a recipe for mayhem.

With that, opting to sell the easiest way possible makes sense when you’re going through a tough divorce. If you could sell on YOUR timeline, with no fees, and without having to do a thing to the house- wouldn’t that make your life easier? Plus, you’re probably tired of dealing with stacks and stacks of legal documents and paperwork. By choosing to sell directly to an investor or cash buyer, you’re choosing to sell in the simplest way possible and will need to have limited interaction with your spouse. So long as you both agree on the cash offer provided and when you’d like to close, we take care of everything else.

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