How Can I Sell or Keep My House During a Divorce?

Although a divorce can tear a family apart and lead to complex and expensive litigation, sometimes it is unavoidable. If you and your spouse have decided divorce is in your best interests, you may be dealing with complicated matters such as asset division and who will continue to live on a shared property. It is a common desire to want to sell or keep one’s house during a divorce. Fortunately, this is one area of family law that has relatively straightforward answers, with help from a family law attorney.

A Note on Living Situations

Whether you live in the house in question does not, from a legal standpoint, affect whether you can keep/sell the house. A spouse with a community property interest in a home (i.e. if the couple paid for or mortgaged the home after marriage with joint money) does not lose this interest if he or she moves out during separation. However, moving out can create practical issues such as who will continue to pay the mortgage, property taxes, and insurance. You can avoid these complex issues by agreeing on terms of your move with your spouse beforehand.

Selling a House During Divorce

The easiest way to sell your home during divorce is with a stipulation that becomes a court order. A stipulation is a written and signed agreement between you and your spouse that decides important details about the selling of the house, such as:

  • Selection of the real estate professional
  • How to set the price of the home
  • How to reduce the price, if necessary
  • Who will be in communication with the real estate professional
  • Whether both spouses will need to formally approve offers and acceptances
  • Which spouse will ensure the home is ready for presentation
  • Whose share of the sold home will pay any liens or encumbrances

Work with an attorney or mediator for help coming up with a stipulation. A stipulation is the best way to sell your home during a divorce, as it satisfies both parties and does not lead to further litigation. However, not every couple will be able to agree on a stipulation for selling the home.

If a stipulation is not possible in your situation, your next option is to ask the court for an order to sell the house. You can do this prior to your divorce trial instead of waiting until the end of the divorce if you have a good reason. Reasons the courts will typically accept include the threat of foreclosure or to use the proceeds to pay for attorney’s fees and costs.

How to Keep the House During Divorce

If you have your heart set on keeping your home during a divorce, you will most likely go through the buyout process. This will be the case most often in California instead of the courts giving a home to one spouse over the other, as California divides all marital properties 50/50 in a divorce – including a home. A buyout is like the sale of a house except that one spouse is selling the house to the other spouse. An appraiser will give you the fair market value of the home and you will work together with your spouse to come up with a buyout amount.

Your buyout payment method will depend on your case. In a stipulation to buyout the home, you and your spouse will need to agree on how the buyout will occur, when you will pay the buyout amount, whether to remove the other spouse’s name from the title, mortgage loan issues, and other factors. Working with an attorney increases your chances of a positive outcomes if you want to sell or keep your house during a divorce in California.