A divorce can be a complicated time in your life whether you are ending your marriage amicably or for other reasons. One of the key issues to consider when going through a divorce is how marital property will be split. In most cases, a marital home will be among the most valuable assets a couple has, so it’s important to ensure that it is dealt with properly.
The Home May Be Sold
One possible outcome is that the home is sold pursuant to a divorce decree. Typically, the proceeds from the sale after the mortgage is paid off will be split between yourself and your former spouse. The percentage that you receive may be determined by a number of factors including your income, whether you contributed to mortgage or maintenance costs and other variables deemed relevant by the judge in your case.
When Can the Home Be Sold?
Theoretically, the home can be sold at any time assuming that you and your former spouse accept an offer to buy it. In many cases, the timing of a sale will be determined by market factors as well as whether you have any children. Your ability to secure housing after the sale may also be taken into account.
For instance, a judge may allow you to live in the home for a year to provide you time to find a new home or apartment. If you have kids, a judge may order the home to remain unsold until the child reaches a certain age. Your former spouse may also be allowed to keep the home for a certain period of time whether you have kids or not.
Otherwise, the sale of the home will proceed much like any other home sale. This means that you’ll be empowered to sell it when it makes the most sense to do so. A judge is unlikely to prevent a sale if you can prove that it is being sold for fair market value and that doing so is otherwise in the interest of both parties.
What Happens if the Sale Occurs Before the Divorce is Finalized?
In the event that the sale is finalized before the divorce is, funds from the sale may be placed in escrow. When the divorce decree is issued, the funds are then released to each party based on its terms. For instance, if there was $100,000 left over after the sale, that money would be held by the court until the divorce is finalized.
This makes it possible to strike the best possible deal for the home while other issues are being sorted out. Funds from the sale of other items like a boat, vehicle or other real estate will likely be handled in the same manner.
Do I Have a Right to Buy the Home?
Depending on the circumstances in your case, you may be given the right to make an offer on the property. At a minimum, your offer should be substantial enough so that your spouse is properly compensated for their interest in the home.
For example, if your home has $100,000 of equity in it, your offer should enable your spouse to walk away with at least $50,000 in cash. Your spouse may also have the right to make an offer on the property assuming that they have cash available or can obtain a mortgage in their own name.
Other Issues to Consider
The sale price is just one factor that you’ll need to consider when selling a home. Typically, you’ll need to pay your realtor’s commission as well as other closing costs, which can impact how much you’ll actually have left over.
Furthermore, you may need to get approval as to who sells the home on your behalf. Your spouse may object to your best friend, mother or other family member from selling the home as it could create a conflict of interest. Conversely, you also have a say in who sells the property.
It’s important to keep in mind that you may not have the authority to sell the house even if you’re the only one on the deed. Even if you brought it into the marriage as separate property, it’s possible that it has become joint property during the relationship.
Even if it remains separate property in a divorce proceeding, your spouse may still have a right to live there. Therefore, you could accidentally put yourself in contempt of court or face other penalties if you sell without permission to do so. An experienced divorce lawyer like those at Davis & Associates will be able to talk more about what to consider before selling the marital home.
What Might Happen If You Sell Too Soon?
If you sell the home too soon, the court may require you to put the money into escrow or take other actions to ensure that it remains available to be transferred to your spouse. Alternatively, you may be required to make up for the lack of funds from a house sale by providing funds from the sale of other property or making other concessions as part of a final settlement.
However, in most cases, the sale won’t be allowed to proceed without approval from the court. Therefore, it’s unlikely that anything will happen that can’t either be reversed or allowed to proceed without anyone finding out about it.
If you are going through a divorce, it’s generally a good idea to have an attorney by your side. Doing so makes it easier to obtain an equitable split of marital property in a timely manner. Furthermore, legal counsel may help to ensure that assets are divided in accordance with state law as well as any instructions given by the court.
