Selling a house during a divorce can be one of the hardest parts of ending your marriage. You need to make big money choices when you’re already dealing with lots of stress and strong feelings. But don’t worry – millions of people go through this same thing every year.
About 65-70% of divorces involve real estate decisions, meaning over 581,000 divorces annually in the U.S. could involve selling or dividing property. This guide will walk you through everything you need to know to sell your house with less stress and get the best outcome for your family.
Understanding Your Legal Rights When Selling During Divorce
Know Your State’s Property Laws
Every state handles divorce property differently. In Colorado, for example, marital property is divided equitably (almost always means equally), based upon the value on the day of dissolution unless the parties agree otherwise. This means fair, not always equal.
Most states follow one of two rules:
Community Property States – Everything gets split 50/50 Equitable Distribution States – Things get split fairly based on many factors
Colorado is an “equitable distribution” state rather than a “community property” state. That means marital property isn’t automatically assumed to be owned by both parties and therefore should be divided equally upon divorce.
What Counts as Marital Property
Your house is likely marital property if you bought it after getting married. State law, specifically Colo. Rev. Stat. § 14-10-113(2), defines “marital property” as “all property acquired by either spouse subsequent to the marriage”. It doesn’t matter whose name is on the deed.
The house stays marital property even if:
- Only one person’s name is on the mortgage
- One spouse paid more toward the down payment
- One person handles all the house payments
When You Can’t Sell Without Permission
Laws are in place in California to prevent an individual from selling a home out from under his or her spouse in the midst of a divorce, even if the house is solely in that spouse’s name. Many other states have similar rules.
These rules protect both spouses from someone selling the house in secret. You’ll need either:
- Written agreement from your spouse
- Court order saying you can sell
- Signed divorce papers that spell out the sale
Deciding When to Sell Your House
Should You Sell Right Away?
You can list a house for sale at any time during a California divorce. Listing and selling early in a divorce may be advantageous because it will be one less source of friction if you can finalize the deal.
Selling early can help because:
- You get the house question settled fast
- Both people can start planning their new life
- You avoid fights about the house while dealing with other divorce issues
- You get cash to help pay for lawyers and new housing
When to Wait Before Selling
Sometimes waiting makes more sense:
- If house prices are going up fast in your area
- When you need time to fix up the house first
- If one spouse wants to buy out the other
- When school-age kids need stability
Think About Your Kids
Often, the custodial parent will be the one to continue living in the house, which can be a great way to provide stability for the kids when there is so much change.
Kids deal with lots of changes during divorce. Staying in the same house can help them feel more secure. But you also need to think about money. Can one parent afford the house payments alone?
Getting Your House Ready to Sell
Pick a Real Estate Agent Together
The first step you should take if you’re selling your home during a divorce is to agree on a real estate agent with your former partner. That may sound daunting to many, but keep in mind that the agent’s priority will be to get the best price possible for both parties, not to take sides.
Look for agents who have:
- Experience with divorce sales
- Good reviews from past clients
- Understanding of your local market
- Patience with emotional situations
Get Your House Valued
You need to know what your house is worth. Before listing your house, it’s essential to determine its fair market value. A professional appraisal or consultation with a reputable real estate agent can help you understand the current market conditions and price your property competitively.
Ways to find your house value:
- Professional appraisal – Most accurate but costs money
- Real estate agent analysis – Free with listing agreement
- Online tools – Quick but less accurate
- Recent sales – Look at similar houses sold nearby
Handle Needed Repairs
Before the house goes on the market, you both need to sit down and determine what repairs you are both willing to make on the house. You may need to consult with your Realtor to determine what is necessary and what is not.
Focus on repairs that help you sell faster:
- Fix obvious problems like leaky faucets
- Fresh paint in neutral colors
- Clean carpets or floors
- Make sure everything works properly
- Keep the yard neat and tidy
Don’t spend lots of money on big upgrades. You probably won’t get that money back during a divorce sale.
Managing the Selling Process
Who Stays in the House?
In terms of getting the best offers for your home, it’s usually best if one spouse remains living there for a couple reasons. If both spouses move out, it’s more difficult to sell an empty house.
Having someone live in the house helps because:
- The house looks lived in and welcoming
- Someone can handle showings and repairs
- Utilities stay on and the house stays maintained
- No extra costs for staging or security
But this can be hard emotionally. The person staying needs to keep the house clean for showings and deal with strangers walking through their home.
Handle Showings Carefully
If both spouses stay, it can get complicated to schedule home tours for potential buyers due to conflicting schedules or disputes about how to show the home.
Make showing rules like:
- Only one spouse handles buyer visits
- Both spouses leave during showings
- Use a lockbox so the agent can show without you
- Keep personal items and photos put away
Don’t Share Too Much Information
If people know you’re divorcing, potential buyers may decide that you really want to get rid of the house quickly. As a result, they might lowball their offer.
Keep your story simple:
- Say you’re downsizing
- Mention job relocation
- Talk about wanting a smaller place
- Don’t mention the divorce unless asked directly
Exploring Alternatives to Traditional Sales
One Spouse Buys Out the Other
When one spouse desires to keep the home, a common approach is a “buyout.” This involves one spouse purchasing the other spouse’s share in the house, effectively becoming the sole owner.
For a buyout to work:
- The staying spouse must qualify for a new mortgage alone
- You need an accurate house appraisal
- The buying spouse needs cash or assets to pay the other
- Both people must agree on the house value
Selling to a Cash Buyer
Companies likeWe Buy Colorado offer another option. Cash buyers can:
- Close in days instead of months
- Buy houses that need repairs
- Skip inspections and appraisals
- Avoid real estate agent fees
This works well when:
- You need to sell very fast
- The house needs lots of work
- You want to avoid dealing with multiple buyers
- You want certainty over getting the highest possible price
Keeping Joint Ownership
It’s not unusual for both spouses to continue owning the marital home after a divorce, especially when children are involved or when one spouse can’t afford the mortgage payments alone.
Joint ownership might work if:
- You have kids who need housing stability
- Neither spouse can afford the house alone
- You think house values will go up
- You can cooperate as business partners
But this keeps you financially tied together, which many divorced couples want to avoid.
Understanding the Financial Side
Calculate All Costs of Selling
Selling a house costs money beyond just the sale price:
- Real estate agent fees (usually 5-6% of sale price)
- Closing costs
- Repairs and improvements
- Moving expenses
- Temporary housing costs
When you and your spouse are putting your home on the market, you have to consider the costs that will come with your home being on the market. Dividing mortgage payments during the home selling process should be lined out in a separation agreement or divorce settlement.
Think About Taxes
For example, married couples — and even ex-spouses who still co-own the property — have up to $500,000 of capital gain exclusion when they sell a principal residence within certain time frames. Sole owners have only $250,000 in exclusion.
This means selling while still married might save you money on taxes if your house gained lots of value.
Split Sale Proceeds Fairly
If one spouse was responsible for making the mortgage payments, keeping up with repairs, and paying for a lawn service, it’s important to agree whether or not that spouse may get a larger share of the proceeds from selling a home.
Consider these factors:
- Who paid the down payment
- Who made mortgage payments
- Who paid for improvements
- Who maintained the property
- Current financial needs of each spouse
Working Through Emotional Challenges
Expect Strong Feelings
The first step in selling the house during divorce is to acknowledge that you will most likely have an emotional reaction. Because of this, it is completely normal to feel emotional about moving on.
Your house holds memories of your marriage and family life. Feeling sad, angry, or scared about selling is normal. These feelings can make it hard to make good business decisions.
Focus on Your Future
Once you have allowed yourself to feel these strong emotions, it is important to recognize the impact they may have on your decision making. If your emotions control your decision making, you may not be putting yourself in the best position to succeed in the future.
Try to think of the house sale as:
- A way to start fresh
- Money to help build your new life
- Freedom from shared property ownership
- One less thing to argue about
Get Support When You Need It
Selling during divorce is hard. Consider getting help from:
- A therapist or counselor
- Trusted family and friends
- Support groups for divorced people
- Financial advisors who understand divorce
Avoiding Common Mistakes
Don’t Price Too High or Too Low
Setting a sales price on your home may become a point of contention, especially if one person wants to sell it quickly while the other person wants to set the higher price and is willing to wait.
Listen to your real estate agent’s advice about pricing. Houses priced right sell faster and often get better offers than overpriced homes.
Don’t Neglect House Maintenance
While your house is on the market, will one of you be living in the home? If so, this person should probably be the one keeping the home ready for show, meaning keeping the home and lawn neat and tidy.
A messy or broken-down house turns away buyers. Keep up with:
- Regular cleaning
- Yard work
- Small repairs
- Fresh flowers or plants
- Good lighting throughout the house
Don’t Make Big Changes Without Agreement
Both spouses need to agree on:
- The listing price
- What repairs to make
- Which offers to accept
- When to reduce the price
- Whether to take the house off the market
Making big decisions alone can cause legal problems and hurt your divorce case.
Getting Legal and Professional Help
Work With Experienced Professionals
At Claery & Hammond, LLP, we understand the challenges of divorce, especially when it involves real estate decisions. Look for professionals who understand both real estate and divorce law.
Your team might include:
- Divorce lawyer – Protects your legal rights
- Real estate agent – Handles the sale process
- Appraiser – Determines fair house value
- Financial advisor – Helps with money decisions
- Tax professional – Handles tax implications
Understand Your Options Early
In addition to working with a financial advisor, it is also beneficial to work with a divorce attorney who is a creative thinker with helping you strategize how to get the best outcome regarding your house.
The earlier you understand your choices, the better decisions you can make. Don’t wait until the last minute to explore your options.
Document Everything
Keep records of:
- All house payments made during the divorce
- Repair costs and who paid them
- Communication about the house sale
- Offers received and rejected
- Professional advice you received
Good records protect you if there are disagreements later.
Navigating Divorce Sale: Overcoming ChallengesFinal Thoughts
Selling your house during a divorce feels overwhelming, but thousands of people do it successfully every year. The key is understanding your options, working with good professionals, and making decisions based on facts rather than emotions.
Remember that divorces involving real estate represent nearly 15% of these transactions in the housing market. You’re not alone in this process.
Whether you choose to sell through a traditional real estate agent, work with acash buyer like We Buy Colorado, or pursue a buyout, the most important thing is making a choice that helps you move forward with your life.
Take time to understand your options, get professional help when you need it, and focus on creating a better future for yourself and your family. The house sale is just one step in building your new life after divorce.
If you need to sell quickly in Colorado, consider reaching out to cash buyers who specialize indivorce situations. They can provide a fast, simple solution when you need to move on with your life without the stress of a traditional home sale.