Each year almost 700,000 divorces occur in America. Combine this with the fact that almost 80% of married couples own their home, it is obvious that many properties are sold each year because of divorce.
We calculated over half a million marital homes are sold each year because of married couples separating and divorcing.
Married Couples With Homes Getting Divorced Need Facts To Sell
With so many married couples not seeing eye to eye, and so many assets on the line it’s no wonder that questions around how to sell the house during a divorce are common.
Unfortunately, due to AI, there is a lot of garbage out there. But that’s where this article comes in.
How To Sell A House During Divorce In Colorado
This article will cover everything you need to know about selling a house during a divorce in Colorado. Because 41 states share the equitable distribution method of dividing assets these facts are relevant for the majority of the country.
Topics covered today about selling during divorce include…
- Who gets the house?
- Is selling necessary?
- Before, During or After – What’s the best time to sell?
- Can the sale be forced by one spouse?
- How are proceeds divided?
- Tax implications.
- And of course, options to get the house sold.
Are you ready to dive in?
Who Gets the House In A Divorce?
If you are thinking about selling a house while in divorce one of your first questions might be:
Who gets the house when we get divorced?
The answer depends on various factors, including:
- The laws of your jurisdiction
- The terms of your divorce agreement
- Preferences of both parties.
Ideally Couples Agree to Divide Assets Fairly
So who gets the house?
Initially, the two parties are allowed to agree on a fair solution by themselves. If this isn’t possible it is common for a mediator to be involved.
Finally, if an agreement can’t be made it is up to the courts to make a final judgment.
Is that what happens in Colorado?
In the Colorado divorce process, all the property acquired during the marriage is divided equitably between the spouses. Therefore if the house is the only thing of value, ownership would be divided 50/50.
If couples can’t agree on their own, the courts will ultimately decide who gets the house. In Colorado, assets are typically split 50/50, so the judge would award each party half of the house.
Of course, divorce occurs because the 2 people don’t want to live together anymore. So is owning half a house with your ex partner a good solution?
Should We Sell the House During the Divorce? Selling House During Divorce
Before, during or after. What’s the best time to sell?
If you’re wondering if you should sell the house during the divorce these are questions to ask yourself.
- Do you want to own half a house with your ex?
- Would you like to sell the marital home and use the cash to pay rent or as a down payment on a new home?
- Perhaps you remain friends and agree to rent the house out to generate income?
- Finally, could you continue to live under the same roof, to save money?
The answers to these questions can be complicated and emotional decisions to make. There are pros and cons to each situation. Rent it our for income or sell it for a swift clean break.
Selling the house during divorce can be a great idea - Do you agree?
9 times out of 10 the property is either sold or transferred into one of the divorced couple’s name. This is because most couples getting a divorce do not want to coexist, own a house with their ex, or take care of a rental together.
For obvious reasons selling the house during a divorce quickly becomes a good idea. You may choose to sell the entire property and split the proceeds equally.
Alternatively, one spouse may want to keep the house and in this scenario, the other spouse can sell their share.
Both of these are great solutions because the divorced couple can make a clean break and the asset can be objectively divided.
Get a no-obligation online quote to sell the house during divorce
If you like the sound of selling your house quickly, easily, and stress-free during a divorce, request an online quote today. We make selling the home while in divorce quick and easy.
Determining the Value of the Marital Home
Is it better to sell house before or after divorce?
The decision has been made to sell the house during the divorce and now you need to know how much it is worth. Working out the value is crucial for equitable property division.
As is the case with any divorce proceeding, both parties must be in agreement. Therefore the easiest way for quarreling couples to determine the value of the house is to involve a real estate professional such as:
- Real estate agent.
- Professional home buying company.
- Property appraiser.
Each of these experts could run the numbers, look at comparable sales, assess the local housing market based on inventory and interest rates, and come up with fair market value. As the third party is impartial, the estranged spouses should be able to agree on the dollar amount.
The process of determining value is also know as running comps. If you would like to verify the information given to you you can run comps on your own quite easily for free.
If there is enough equity in the property (fair market value – mortgage) it may be possible for one spouse to use the equity to buy out the other spouse’s interest.
Can One Spouse Force the Sale of the House?
One spouse cannot directly force the other to sell the house unless they have a court order. Getting a court order to force a sale involves a lengthy and costly process. Such an order would only be given in unique circumstances and because of this one spouse forcing the sale of the house during divorce does not happen often.
Instead, what typically happens if an agreement can’t be made the judge will order the house sold and divide the cash equally.
If the judge orders the house sold the party that wanted the house sold got what they wanted, in a roundabout way.
Most couples are forced to sell for financial reasons
It is common for divorcing couples to agree to sell their home. This is the case because most couples are forced to sell the house anyway. Some common reasons include:
- To pay for divorce attorney and proceedings.
- One spouse cannot afford to buy out the other’s interest.
- The couple cannot agree on the value of the house.
Each scenario results in a sale at the current market value, the proceeds are divided equally, and the unhappy couple can go their separate ways.
This is not unlike selling inherited property when more than one person is the inherits it.
What Happens to the Mortgage and Other Debts?
Deciding how to handle the mortgage and any other debts associated with the property is essential. This may involve refinancing, assuming the mortgage, or selling the property to pay off debts.
What happens to the mortgage?
Asking what happens to the mortgage when in divorce is a common question. Simply put, the mortgage stays with the house.
Think of the mortgage and the house as being tied together. Any financial decision made involving the house will have a direct effect on the mortgage. For example:
If the house is sold the mortgage is paid off during escrow. Or if one spouse buys the other half, they get the house but they get the mortgage too.
How are proceeds from the sale divided?
Proceeds from the sale are divided according to the divorce settlement agreement. In Colorado, the law requires an equitable division of the money. This may look like most cases where:
In most cases, the divorcing couple will agree to divide the money equally.
This happens to be in line with Colorado State law which requires an equitable distribution based on various factors.
Can we sell the house if it's in one person's name?
The ownership of the house may not necessarily dictate who gets to sell it. Jointly owned or marital property may still be subject to division in a divorce.
What happens if one spouse wants to buy out the other?
If one spouse wishes to keep the house, they may need to negotiate a buyout of the other spouse’s share of the property.
Negotiating a buyout is the same for married couples as it is when a house is in probate and one sibling wants to retain ownership. It can take a cool calm and collected approach from all parties to get the deal done.
Are there tax implications to consider?
Selling a house during a divorce can have tax consequences. Consulting with a tax professional or financial advisor is advisable to understand these implications.
How long does it take to sell a house during a divorce?
The timeline for selling a house can vary widely depending on market conditions, the property’s location, and the cooperation of both spouses.
Do we need to involve attorneys?
Legal representation is often recommended in divorce cases, especially when dealing with property division and real estate transactions.
Can we sell the house if there's a restraining order or protective order in place?
Legal restrictions like restraining orders can complicate the sale of a house, and it’s essential to consult with an attorney to navigate such situations.
IMPORTANT NOTE:
It’s important to note that divorce laws and procedures can vary significantly depending on your jurisdiction, so it’s crucial to seek legal advice from a qualified attorney who specializes in family law to address your specific circumstances.