Can I Be Forced to Sell My House in a Divorce?

Can I Be Forced to Sell My House in a Divorce

Couples classify their homes among the biggest assets they have, generating a lot of confrontation when it has to be divided in a divorce. A house cannot be physically split, but there are ways of solving this problem.

Some couples agree to sell their house and split the proceeds, while others come to an amicable decision by letting one spouse take ownership of the house.

Dividing the equity in a marital home is not an easy task. To get an acceptable decision regarding property division for both parties, great care must be taken by the mediators of the divorce as well as each person’s divorce attorney. Under some circumstances, you might be forced to sell your house, especially in the case of a high asset divorce.

Some states will not force you to sell if the house is under your name and you bought it before getting married. However, if you co-own it with your spouse, bought it after getting married, or contributed significantly to paying the mortgage, you may be forced to sell.

This only happens if one spouse cannot buy out the other spouse’s interest in the house or there is a disagreement on how to split the equity.

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Can I Sell My House Before Divorce?

You can sell your house before the divorce process is finalized. Most couples prefer selling after the divorce settlement is finalized, but this is unnecessary.

If you and your partner can not agree on how to divide the proceeds of the sale and your other personal property after all other expenses have been settled, the judge might direct the marital funds to be held by one of the attorneys until the divorce proceedings are officially over and the marital residence can be divided fairly.

However, if you already have a buyer in mind, you don’t have to delay the process as long as you and your partner can make alternate living arrangements.

When you decide to sell, you should consult your spouse when choosing a realtor. If settling on one realtor becomes an issue, you can ask your spouse to come up with three names of potential realtors, and then you can choose from that pool.

After choosing your preferred realtor, you need to sit down with them and discuss all the repairs or renovations needed to get the best price when the sale goes through. The expenses of the repairs will be your responsibility together with your spouse, especially if the proceeds will be shared.

Selling the marital home before a divorce when you have children living there means splitting the family prematurely. Doing this may affect your case (positively or negatively). You need to consult your family law attorney or divorce lawyer to learn more about the repercussions of such a move during divorce proceedings.

If you choose to sell the house with your children residing there, you need to make arrangements that will fit the move and child custody situation, such as looking for different schools and when changing school districts.

man women holding house

Can You Sell a House During a Divorce?

Divorce [link to Can I Sell My House to My Wife] is a consuming process both emotionally and physically. You might be overwhelmed when you add the process of selling real estate.

However, the shared house is normally an important asset to both parties in a divorce case. This is because the house may have sentimental value to both spouses. Deciding home ownership or whether to sell the marital residence and split the proceeds is normally a controversial topic in any divorce agreement.

It is better to sell the house to take care of financial, legal, and personal needs. The process of selling a house and the equitable distribution of assets in such a situation is not easy.

Conflicts involving houses normally have three outcomes which are:

  • You buy your partner’s interest in the house so that you become the sole owner
  • You keep living in the house or your spouse in case you have children under 18 years and sell it later
  • You sell the house and divide the proceeds immediately

Considerations to Make When Deciding to Sell Your Home

Dividing Huge Assets

If you have more than one house, you may divide the houses with your spouse.

When you divide such assets, you make the divorce process easier because you do not have to wait for the property sale to happen or sit through rigorous negotiations to determine who remains the sole owner of the house.

You will still have to agree on the pricing of the house, but the stress of selling a will significantly reduce, especially during a divorce.

Buying Out Your Partner

In some circumstances, you and your partner might not want to yield to the ownership of the house. One of you can decide to buy out depending on their financial muscle.

The buyout can cost you more or less than the market value depending on your income, finances contributed to the property, and how much the house can earn you. If you are not interested in any back-and-forth with your partner, one of you can settle for half of the house’s value.

Whoever chooses to do the buyout should have the money and not depend on the money they will get after the divorce proceedings. They should also be comfortable paying the mortgage on a single income.

Co-Owning the House

If your divorce has been amicable, you and your partner may devise a co-ownership plan. In this situation, you and your spouse agree on a mortgage payment plan that includes each person’s contribution and when to do it. You also have to see eye to eye on how to share the proceeds when you decide to sell the house.

If you decide to go this route, you remain attached to your spouse even after divorce. Late mortgage payments can still affect your credit scores. In addition, any house owner not living in the house as a primary residence (five years before the sale) is not entitled to claim the Home Sale Tax Exclusion.

This means they will be subjected to the full capital gain tax levied on any appreciation in a sale. The only way to avoid this is by agreeing on a sales timetable guaranteeing both owners a sales tax exclusion.

Can I Sell My House Before Divorce?

You can sell your house before a divorce. Most Americans believe their house to be the most expensive asset they will ever buy in a lifetime. The house can be classified as community property which can be very stressful in a divorce.

Unlike other assets such as bank account balances, a house can not be divided. The only action that can be taken is buying your spouse out or selling the house and splitting the proceeds.

It is advisable to put the house up for sale immediately after you realize that a divorce can no longer be avoided. Putting your house on the market early enough gives you adequate time to get more interested buyers. It will increase the chances of getting a good offer that will give you enough equity to divide with your partner.

Selling your house before getting divorced eases the transition because both of you will have to move out, enabling you and your partner to get used to the single life.

Most people do not appreciate the benefit of selling their houses before divorcing to their tax filings. It is common for both parties to move out of the house after the divorce, rendering the house a second home for both partners.

The property may appreciate to a certain level after a significant period. That increase is treated as capital gain while filing taxes, and it is taxed.

Selling your house in advance before filing for divorce avoids the trouble that the house may bring if sold later. You must sit down with your partner and discuss making the sale possible. A spouse not cooperating with selling the house is most likely challenging.

Another way of ensuring that the property is sold before the divorce is finalized is by delaying the commencement of the process completely. The moment your divorce is finalized, you lose all the incentives you had before the divorce.

Some cooperating partners may play the delaying game when the court date gets near, hoping they can get a bigger share of the proceeds or continue staying in the house. Postponing the divorce can help bring back the focus on selling the house.

The court is the only entity capable of forcing you to sell a house and transfer ownership from one party to another. They can also order the sale pursuant to marriage dissolution.

It is possible to sell your house before your divorce is filed, which will help you avoid being forced to sell. You will also have time to choose the best realtor to deliver the best prices. You need to be on the same page with your spouse or soon-to-be ex-husband or wife.

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