If you look up the most stressful life events, moving and divorce are frequently at the top of the list.
Unfortunately, if you are currently divorcing or are researching divorce, at some point you will have to address moving.
You will have to figure out whether you, your spouse or both of you find somewhere else to live. This includes the strong possibility of selling the marital house.
Selling a house is a challenge. But once you sell, you get the satisfaction of moving on to the next chapter of life.
If you are selling a house for divorce calling it a challenge is an understatement. For some, it will be harder than others depending on your situation.
But once the home is sold, it will be a weight off to know that the (most likely) largest marital asset has been taken care. You can be that much closer to moving on.
This guide will give you some insight into when and how to sell your home when facing divorce.
If you have questions about your property during this time reach out to me.
Finding a Divorce Lawyer in Northern VA
Before anything is decided about your property, it is a good idea to speak with an attorney who specializes in family law. A good lawyer will represent your best interests and also guide you on what to do next.
For this guide, I am teaming up with attorney Matthew Smith with the firm Livesay Myers in Fairfax, VA.
Matt has a stellar reputation and has received multiple recognitions for his work in Northern VA divorce cases.
Have a legal question? Feel free to reach out to Matt. Remember, his answers are based on Virginia divorce laws. If you are out of state, find an attorney in your state.
Next, we will get down to what to do with the house.
Who Owns the Home?
The first matter to settle when selling the home is, who owns the home? This question is not always as easy as it sounds.
A lawyer can help you determine this.
Attorney Matt Smith points out “Family lawyers are able to run complex analyses (such as the Brandenburg analysis) to determine how much equity each party should receive.”
This type of analysis will determine who owns the property, and to what degree. There are three scenarios for your marital home.
1. Marital Property
“Usually the home was purchased during the marriage and/or jointly titled, making it presumptively marital.” Matt explained that much of the time the home is equally shared.
In this scenario, you and your spouse will have two options.
First, one of you could buy the other out.
Matt states that “If the home is marital property, then in order for one party to keep it, they will have to buy out the other party (typically for one-half of the equity, perhaps deducting a hypothetical Realtor’s fee) and refinance the mortgage into their sole name.”
The other option is to sell the home on the open market, and split the equity. Unless you come up with another arrangement, an equal split is the most common.
2. Separate Property
Matt goes on to explain that “If a home is the separate property of one party, then that party will be able to keep it.”
There are a few different ways this could play out. The most simple is if you or your spouse owned the property outright before marriage.
If the home is clearly your property, then that will be acknowledged and you will be able to live in the property, sell it, or rent it out to a tenant and move.
3. Hybrid Property
Hybrid property is where things can get more complicated. If you owned your home before marriage, but used marital funds to pay down the mortgage, this would likely classify your home as hybrid ownership.
There are many other instances where it could be hybrid. The determination according to Matt is “based upon down payment contributions, mortgage payments, and the source (separate or marital funds) and timing (pre-marital, marital, or post-separation) of those monies.”
This is where equations such as the Brandenburg Analysis come into play. This helps determine if how much profit you and your spouse will keep from the sale of your home.
Selling Before Divorce Is Finalized
If you are in a circumstance where you would like to sell before the divorce is finalized, this is an option as well.
For either financial or logistical reasons, some divorcees go this route.
The key to doing this is working with your spouse to make sure you are on the same page.
As Matt puts it, “It’s common for the parties to sell before finalizing their divorce, but that depends on a number of factors. Is there a settlement agreement in place that governs the sales process, down to the nuts and bolts of selecting a Realtor, recommended repairs and upgrades, and sales price adjustments? If not, do the parties trust each other enough to work through these issues without a formal agreement in place?”.
As you can see, selling a house before a divorce can be done. But the best practice is for you to have an agreement in writing. Preferably, as detailed as possible.
There are also other factors to consider. These are tough conversations, but good ones to have that will make the process as painless as it can possible be.
Other factors to keep in mind according to Matt: “Is either party desperate to get the home sold, or are they perfectly fine staying put to save money until the divorce is finalized? Is either party eager to purchase another home? Is one party shouldering the burden of the mortgage, or are the parties able to share the financial load prior to sale?”
If you are able to get the house sold prior to divorce, it will be one less thing to worry about down the line.
Court Ordered Sale After Divorce
If you go to a divorce trial, this will most likely result in your selling the house. Commonly a judge will order you to sell the property and split up the proceeds.
“A judge will typically order the sale of the home at the conclusion of an equitable distribution (divorce) trial, unless the home is found to be the separate property of one party or the other, or in some other rare circumstances. That’s why if either party wants to keep the home, they should negotiate that arrangement with their spouse prior to trial.”
As you can see, if one of you wants to stay in the home the time to work that out is before trial.
Finding a Real Estate Agent
So who gets to pick the agent? That depends, says Matt. “The parties are free to jointly select a Realtor, either with or without a settlement agreement that governs the parameters of the Realtor’s role. Sometimes the parties’ attorneys are able to agree upon a Realtor if their clients can’t.”
If you decide to sell before the divorce hearing, you are free to select a Realtor yourself with the agreement of both parties (they will have to sign the listing agreement as well). Or your attorneys may be able to select one.
A good real estate professional that has experience can navigate the tension between yourself and your former partner by being neutral. My only objective in these situations is to maximize your profits from selling.
If the property is separate property and it is agreed to belong to you, you will have the option to hire an agent.
If the divorce does go to an equitable distribution trial, then the judge or a court appointed representative will select an agent.
Matt expands on this, saying, “If a sale is ordered by the judge, the court may appoint a special commissioner to facilitate the sale, receive the proceeds and distribute them to each party in accordance with the court’s ruling. The special commissioner typically has the authority to select a Realtor, or the judge may do so instead.”
Finding Another Property
Divorce can be brutal. But at some point, it will be time to move on to your new goals. That means at some point a new town and a new home.
The timing on this varies. You may already be looking for a home. Or you may want to rent for a little while to let the dust settle.
Either way, when you are ready to start your home search, I am here to help.
Jump on my home search to see homes available in Northern VA.
Tips for Successfully Selling The Marital House
Will this process be difficult? Yes. But you can get it done. Here are some tips for selling the house for a divorce, without losing your mind in the process.
• Get a great lawyer. Just like real estate professionals, an “ok” attorney is not going to be good enough. Seek a consultation, this can help you navigate your next steps.
• Find out your homes value. You will want to know how much equity is at stake. Reach out me below with your address and I can send you a detailed home value report and market update if you are in Northern VA.
• Go for cooperation. If you can agree on terms, you can get the process done more quickly. This is not always possible, but making an effort to focus on the the task at hand instead of the past can be helpful.
• Get an agent with experience. If you can find an agent who has sold homes in these situations, that is best. It takes a very good communicator who also stays focused on the goal of getting the home sold for the most money possible, despite any conflict.
• Keep records, get a settlement agreement. Unless you are confident you and your spouse can navigate the decisions needed to sell the property, getting something in writing is crucial. This will spell out all the terms of the sale so that there will not be unexpected resistance later.
Are you facing a potential divorce? Want to know what your home is worth? Have questions about the selling process?
The first step to getting answers is to reach out to me. If you have legal questions, reach out to Matthew here.
If you live in Northern VA and want to sell your home, fill out the form below with your address and a description of how I can help you.[showcaseidx shortcode encountered an error]