Navigating a divorce is challenging enough, but when you add selling a house into the mix, it can become even more complex. If you’re in Lexington, Kentucky, and facing a divorce, understanding the steps to sell your house while going through this process can help ease the burden. This comprehensive guide will walk you through the essential steps, legal considerations, and strategies to ensure a smooth sale.
Can You Divorce Without Selling the House?
You have several options for handling a house during a divorce, whether you choose to keep it or sell it to split the proceeds. The first step is to inform your lawyers and the Court of the date you acquired the house. This crucial detail can determine if the property needs to be sold and the assets divided equally, or if it is considered separate property.
If the Court determines that the property is “separate property”—meaning it was purchased before the marriage, was gifted or inherited solely by you, or was bought with your separate assets—then, in both community property and equitable distribution states, your spouse typically has no claim to it. However, there may be exceptions, such as if the property was significantly improved, which could increase its value. Consulting a lawyer will help clarify whether your property is classified as separate or marital.
A court will look at several factors to decide who gets the house, including:
The value of the property.
The financial circumstances of each partner.
The employability of each partner.
Both physical and monetary contributions to the marital home.
The age and physical and mental health of each partner.
The amount of time each partner will have custody of the children.
Who Gets The House in A Divorce?
During a divorce, the division of assets is governed by state law, which significantly influences how your marital property is split. Most states adhere to the principle of equitable distribution, where a judge divides property in a manner deemed fair, though not necessarily equal. This division considers various factors, including individual contributions to the household, such as child-rearing responsibilities.
There are nine states that follow community property laws: Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin. Alaska also has community property laws, but only if you choose to opt into this system. In community property states, assets acquired during the marriage (i.e., marital property) are generally divided 50/50, with few exceptions.
There are a few options both you and your partner and/or the Courts might choose when it comes to selling (or not selling) your marital home. These include:
One of the spouses buys out the other legal interest and keeps the home
For married homeowners in a community property state, you and your spouse will typically split all assets equally. However, this doesn’t necessarily mean you must sell your house. Instead, you can negotiate with your spouse in Court to buy out their legal interest in the property, allowing you to retain ownership. To do this, you will need to ensure that you can be the sole person listed on the title within the timeframe set by the Court after the divorce decree is finalized.
One spouse keeps use and occupancy of the home for a specified period; typically when the youngest child turns eighteen, then the house can be sold.
In many states, a parent with custody of minor children may be allowed to remain in the house until the children reach the age of eighteen. Depending on the Court’s decision, the spouse living in the house may or may not be responsible for paying the mortgage, bills, insurance, and other expenses. The property would generally remain theirs until all children turn eighteen, at which point the house would need to be sold, and the proceeds divided between the spouses.
Co-own the home
Divorce doesn’t have to be an emotional and financial battleground. Co-owning a property might be the best solution for the family’s well-being, whether you’re living together or separately. For instance, if you have children and want to keep them in the same home, both spouses could remain on the mortgage to minimize disruption.
For example, consider a couple with three children where the husband is the primary breadwinner and the wife is the main caregiver. If the wife lacks the funds, job history, or means to buy out her husband’s share of the property, co-owning might be a viable option.
While this arrangement can provide stability for the family, it requires trust from the departing spouse that the other will make mortgage payments on time. Otherwise, missed payments could negatively impact both partners’ credit scores.
The house is sold immediately and any equity is split up
In some cases, selling the house can be the simplest and most straightforward solution. The property is listed at an agreed-upon price, and once it’s sold, the proceeds are divided either equally or according to the Court’s decision. Depending on your local market, this process can be quick or slow.
If the housing market in your area is sluggish, the house is in disrepair, or there are liens against the title, a traditional home sale might not be feasible. In such situations, selling directly to a homebuyer or investor could offer a faster and more convenient solution, allowing you to move on with your life more quickly.
Selling Your House During A Divorce?
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Steps to Sell a Home During Divorce
1. Hire A Divorce Specialist Real Estate Agent
Before you put the house up on the market, your first step is determining who gets what either through lawyers or the Court. Divorce can be an extremely turbulent and emotional time for both partners. Let professional experts with experience in selling real estate during a divorce guide you through this process.
2. Agree On Home Sale Specifics
You and your partner will need to decide how you would like to sell the house. Would you prefer a fast sale so that you can split the assets and move on with your life, or is it worth it to you to spend a few more months fixing up the property to make it “market ready” so that it can sell for the most money possible in the current housing market? If you can’t come to a decision through your lawyers, the Court may need to become involved.
If you decide to spend the money on any necessary repairs and upgrades, you’ll want to come to an agreement on how to split those expenses, as well as how that investment may impact the final split of the profits. Before you spend one more dime, make sure to finalize these agreements with a lawyer so that you’re not left high and dry at close.
But expenses and profits are just the tip of the iceberg. How will the house be dealt with during a listing? Whose agent will you use? What price point should it be set at? Will it be empty or will you or your spouse live in it until the property is sold? Who is responsible for the mortgage and bills and, if no one is living in the house, who is the one who will make sure that it’s ready to be shown during open houses and daily showings? If possible, let your lawyers hash this out before taking it to court. This can save you a lot of time and help keep any profits from the home sale being eaten up by the price of paying a lawyer to represent you in court.
3. Know What to Expect in Order to Close the Sale
There’s one more step where you and your ex-partner will need to button down your emotions to work together so that you can both make a profit – reviewing offers from potential buyers. If only one or two offers filter in, then this might be an easy decision, but in places where the housing market is hot and you get multiple different offers there might be a lot of back and forth using your lawyers and real estate agent about which offer is the right one for your situation. To help with this, try to agree on a strategy before putting up the house for sale. Whether you decide to take the first offer that comes in with no contingencies or you would prefer to choose the offer that will net you both the most profit at close, you must come to a decision together before you can sell.
4. Divide the Proceeds
It’s the final step, and hopefully the simplest! Whether the Courts or your lawyers helped you settle your divorce, you should already understand how the proceeds of the house sale will be divided. If there are any liens or obligations on the house, the escrow company will pay them off before distributing the money so that you can move on with your life.
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5. Sell Your House AS-IS to A Cash Buyer
Are you stuck in a situation where you and your ex-partner can’t (or don’t want to) speak? Are you ready to be out of the marriage and on to the next phase of your life? Is the stress from the divorce eating away at you, and a fast and straightforward sale of your shared marital property seems like the best option for everyone? Selling your property to a direct cash home buyer or investor might be the right option for you!
Investors and direct home buyers pay cash for properties, no matter what the condition or the owners’ financial (and marital) situation. They specialize in fast closings so that property owners can get out from under a property faster than with a traditional home sale. They also purchase houses and properties as-is, meaning that even if the house needs upgrades or major repairs, they still are willing to pay cash for it and close as quickly as possible. For two spouses stuck in a painful and expensive divorce, this might be the best option for the family. Not only are they able to sell the house for a fair cash amount, but they’re able to close quickly and without having to negotiate terms through lawyers and a shared real estate agent.
Selling Your House During A Divorce? Contact Us For Your Cash Offer Today!
White Barn Home Buyers is a local house buying company that’s built their business by buying houses for cash, no matter what the condition or the homeowners’ financial situation. We promise competitive cash offers without the hassle of dealing with real estate agents, lawyers, and more. If a direct home sale sounds like the best option for you, let’s chat! Call us day or night at 859-785-8989. We have a reputation for buying houses with less stress and less fees.
If you own a property that you need to sell fast due to divorce, we have a solution. Contact us today and get a competitive cash offer for that house or rental property. We buy homes, no matter what your individual financial situation or the property’s condition. Even if the house has been neglected for years or suffered damage in the last storm, once you accept our fair cash offer our team of experts will handle all of those expensive repairs and upgrades so you don’t have to! We make selling a house during a divorce as hassle-free as possible.