House Selling Options During A Divorce

Many questions arise when trying to sell a home during a divorce. What needs to be done to ensure a quick and profitable sale? Who will choose the Realtor? When is the best time to list a home? Who bears the financial responsibilities of the sale? You can proactively allay your fears and clear up misconceptions by doing your due diligence and researching what to expect throughout the selling process.

The court determines who receives what based upon a variety of factors, such as the relative earning contributions of the spouses. In addition there are mutual court orders that automatically protect marital properties. An automatic temporary restraining order prohibits spouses from selling, transferring, or borrowing against the property when a divorce is filed. This should be discussed with your attorney, as this protection varies from state to state.

The family home is typically a couples most valuable joint asset and must often be sold in order to equally distribute its value between the two spouses. Therefore, it is vital for you to understand the relationship and difference between a mortgage deed and a property title. Mortgages are conditional legal agreements made for the purpose of buying a property/home. The lenders security interest is on record when the title is registered and  lien is placed on the property. . Allowing the mortgage (lender) the right to obtain a foreclosure order to take possession if payments of the debt are in default.

A property title refers to ownership of the property and the right to use it. A person on the title can transfer ownership to another party but cannot transfer more than what he or she owns. Some divorcing couples utilize a quitclaim deed, which transfers ownership from one spouse to another, but it does not transfer financial responsibility. One spouse may transfer title of the home to the other and consider him or herself free from the financial responsibility of the mortgage payments, but this is not the case. The loan payments are are the responsibility of the parties on the mortgage. In order to change the names on the mortgage, one spouse must obtain financing with which to buy out the other.

Taking ownership in title is needed when one spouse is awarded the home, but buying the other spouse out and having the mortgage in the title parties name is what is needed for full ownership. This removes all financial ties of that spouse from the property.

Before being awarded the family home and having one spouse sign over their title rights, both parties should obtain a true value. Having a real estate professional go over a detail market analysis  for value is a recommend first start. Both parties should also consult a professional mortgage lender to be approved for a mortgage. Knowing how much the home is worth and how much house you can afford will help determine if the family home should be sold or if either party can afford the financial responsibility alone.

All discussions regarding mortgages, quitclaim deeds, and title of property should be conducted with your legal adviser.