Everyone wants a “happily ever after” marriage. Unfortunately, for many couples, it doesn’t always seem to work out that way. In fact, in Pennsylvania alone, nearly half of the marriages end in divorce. In 2021, there was almost 32,000 divorce arrangements in the keystone state.
In addition to all of the headaches and misery that come with a divorce or separation, many couples also own property together in the form of their primary residence. This complicates the breakup and could drastically increase the legal and financial costs if a reasonable separation agreement is not reached. Selling a house during divorce is such a critical thing to get right because it usually represents the majority of your combined net worth.
So today, I’ll share many resources that can help you and your partner sell your real estate during a divorce. These tips, tricks and options are meant to make an already sour situation just a little bit better.
- Divorce is a serious and entangled legal process. Don’t make it more complicated by fighting over or “splitting up” your home. Start by reaching out to experts in the field for advice and support.
- Selling a house during a divorce is entirely possible and should be a strong consideration for both parties. We’ll talk about removing, selling and handling of property during a separation.
- Look at all of your options! Before you and your spouse make a joint decision about your assets or real estate, walk through the various options and what benefits and risks of each are.
Table of Contents
What Happens to the House in a Divorce in Pennsylvania?
If going through a divorce isn’t already enough an emotional and painful rollercoaster ride, deciding what happens to the house you and your partner own is a whole other layer of stress.
It’s going to come up though. It’s always a major focus of divorce.
Real estate typically represents the greatest asset a couple may jointly own. Not only is it a financial pillar in their life and marriage, but it also holds a great deal of sentimental value. Getting divorced means making big decisions about what will happen to the house, vehicles, bank accounts and other pieces of marital property.
In most cases, it’s going to make sense to sell your house. Although that’s not your only option, it is a great and clean one to consider.
Who Gets the House in a Divorce?
If it is decided that the house should go with one of the spouses after divorce, then how is that determined?
Assuming that both parties wish to own the home, how can we make a separation agreement that is fair and just. Well, only a judge can do this.
In Pennsylvania, the reality is that either person could end up with the house after divorce. Since Pennsylvania is an “equitable distribution” state, there are many factors involved in the final divorce decree:
- Duration of the marriage,
- Ability of each individual to support themselves post-divorce
- Financial standings before marriage
Marital Home Division Process Overview:
- Pennsylvania law does not stipulate a 50/50 split of marital property, however a 50/50 division most common.
- If the divorcing husband, wife or both have similar incomes and the assets include a home and/or modest retirement accounts, the judge will typically create a 50/50 division.
- For these cases, divorce attorneys are usually able to reach settlements since division of the marital property is fairly straightforward. That is, except for the house!
If it gets as far as the courts, the judge could order the couple to sell the house and split the net proceeds after the mortgage is paid off. In that case, no one ends up with the house.
In a case like this the judge may order the property to be sold while the details of the divorce are still being arranged.
At the end of the day, either party can end up with the house. If you decide to fight to keep it, think about how practical that would be. Can you afford the mortgage yourself? What about any alimony for children or financial costs related to the divorce proceedings?
Common Law Marriage – Divorce Implications
Once you and your partner establish a “common law” marriage per your state’s guidelines for those, you are then legally obligated to the same processes as married couples. In filing for a divorce, as it is for married couples, spouses by common law can also enlist help from attorneys, especially if a court is required to decide division, who gets the house, and other property settlements.
Who Can Help You When You’re Selling a House During Divorce?
If you can’t already tell, selling a house during a divorce can be quite a messy topic if it’s not your first time doing it.
If there is one thing you two can agree on, it should be asking for help.
Please ask for help from others along the way. There are many top-notch real estate and divorce experts in Pennsylvania and across the country. At a minimum, you’ll want to be in touch with a divorce attorney, but you may also require the services of some other experts.
1. Divorce Attorneys
Lawyers are absolutely required during separation or divorce proceedings. Even if a divorce settlement is probable, you won’t get there without a strong legal team. There are attorneys who specialize in marital property, real estate, child custody and other divorce agreements. Divorce laws are going to vary by state so be sure to find a lawyer who is certified to serve in the state that you reside.
2. Divorce or Marriage Counselors
Marriage counseling does not always end with a positive result. It’s often the case that marriage counselors may be your first place to begin divorce discussions between you and your spouse. Some counselors are even great mediators for the beginning phases of “who gets what?” and “what will happen to the house or children?”.
Hiring a realtor during a divorce can be tricky. On the one hand, you may have clear alignment to sell the house fast. This is usually done in order to clear the mortgage on the real estate and split what is left. However, there are other times that realtors get brought into the situation too late or by court order. In these cases, it’s often difficult for a real estate agent to be effective in selling the house because it is now under a timeline.
4. Divorce Home Buyers
If you’re getting divorced and you’ve jointly decided that selling your house is the best and cleanest solution for all, then think about finding a reputable home buyer who can work with you on a quick cash offer. This is an ideal way to go because it removes all of the mess around “who gets the house” and it also saves the couple fees and costs along the way. Cash home buyers typically cover closing costs, legal forms, repairs as well as title work.
You can expect to pay for all of that with a real estate agent…plus loan contingencies from buyers, home staging costs and other fees.
That’s why a cash offer from a local home buyer is the way to go!
Get Your Cash Offer Today!
Can You Divorce and Still Own a House Together?
If your home is owned free and clear, then entirely possible to own the house together as a divorced couple! Joint property, even if you are divorced, is a possibility but it will require a massive amount of coordination and paperwork. Some couples decide to do this so that their children can continue to live there until they are old enough.
However, having a jointly owned marital property can lead to potential risks and contentions in the future. With the way the bills can stack up between mortgages, taxes, insurance and divorce attorney fees, it’s usually decided that selling the house and splitting the profits is the way to go. Why is this? Well, sharing a house after divorce can lead to arguments around:
- Bookkeeping – If you opt to split the house and file a quit claim deed, then it’s incumbent for the divorced couple to negotiate those terms and document them in writing. Secondly, you both will also need to outline and keep track of how each party contributes to the mortgage, maintenance expenses, and insurance, etc.
- Credit & Taxes – If you both continue jointly own the property, then in the eyes of a credit agency you both will state the entire mortgage amount as liability on your credit reports. That could limit your ability to purchase a new house (with a new spouse!). And if your ex -partner misses mortgage payments, the that could negatively impact you credit score. And on top of that, who gets to deduct mortgage interest from their tax returns? You’ll need to agree on that too!
- Awkward Interactions – Even settlements that seem equal and peaceful can turn into complicated and angry rather quickly. When keeping a home, you will still have to regularly see and communicate with one another. For some couples, this is just not practical after divorce.
Removing Marital Property Before Divorce
Keep in mind that divorce brings about a lot of scrutiny from lawyers, courts and others involved. It is not only frowned upon, but also penalizing to remove martial property ahead of a separation or divorce. Courts do not tolerate spouses try to remove assets prior to the proceedings and to the benefit of themselves at the expense of their spouse. This behavior loosens your credibility in the eyes of the court and judge. The last thing you want is the entire courtroom to not trust you and therefore think differently about the division of your property and home.
Selling Community Property Before Divorce
Couples can certainly sell off assets, including marital property and real estate, prior to a divorce proceeding or settlement. However, it should be known that the proceeds from such a sale are and will be included in the division of marital property. Unless the spouse is selling community or marital property in attempt to outwit the other through foul play, then it would only be up to the court to determine if that is the case or not.
Getting rid of jointly owner property, such as selling your house, before a divorce begins is actually not a bad idea at all. Cash is almost always easier to divide up than real property (houses, vehicles, boats, antiques, etc.).
Creating a PA Divorce Property Settlement Agreement
Your attorney may advise you in the direction of a property settlement agreement.
A Pennsylvania marital settlement agreement is legally binding upon all parties included. Before finalizing the agreement, each spouse should review it with his or her legal counsel to ensure that all of the pre-discussed criteria and arrangements are fully and correctly documented in writing. A property settlement agreement can be entered into at any time before the divorce decree. And once it is established, it is sent to the court and included as part of the court’s final divorce decree. The final divorce decree may or may not include instructions for the estate to grant deed to one of the spouses.
Options for Selling Property Before a Divorce Settlement
So as you can see from all of the above information, getting divorced and deciding how to handle your real estate property can be quite cumbersome. Below are two of the most common options for selling a house during a divorce:
Option 1 – Selling the Home Before Divorce is Final
Whether this occurs before, during or after a divorce…selling is the most common approach to creating clear and clean separation. Marital property is difficult to hang on to as joint property. Separate property is the easiest and fastest solution.
Once the house is sold, the proceeds can be easily divided as the spouses determine. Of course, this is after any and all mortgages, IRS liens or capital gains taxes are paid. The capital from this sale can be repurposed for each partner to start their new journey. This might include a new primary residence, covering attorney fees, settling debts and anything else to solidify legal separation.
Are you planning to sell your house? My team and I would love to make an offer that is fair and easy for all of us. Our company, Signature Properties, has been buying divorced property for many years.
Option 2 – Buying Out The Other Spouse
“Buying out” one spouse requires another spouse to pay half of the market value to the other to gain sole ownership. The spouse who makes this payment may now own the house clear of claim from the other spouse. This is very typical in an uncontested divorce.
Buyouts like this make sense in certain situations where families or children need to continue living in that location for schooling, work or other purposes. Divorced parents often choose this option because they have to. It offers a clean break without the family uprooting their lives.
The main drawback is that the person “buying” out the other party does need to have the cash, money or loan to pay to “buy out” the other.
Frequently Asked Divorce House Questions
Is it better to sell a house before or after divorce is final?
There’s no right answer for this one – your mileage may vary. A good way to find out what might be best for you and your ex-spouse is to contact a professional and ask for some advice. An attorney, realtor or home buyer will point you in the right direction. The minute you get handed the divorce papers, get help and start planning.
Can I sell a house in my name before divorce?
In the case of an uncooperative spouse, a court can order the sale of the house before divorce has finished. This allows the property to be sold before divorce is complete.
Can I sell my house if I’m divorced?
Selling a house before, during or after a divorce is really very consistent. As long as your expectations, such as “who gets what”, are crystal clear then it should not be an issue.
What comes first, divorce or selling a house?
In my opinion, which is not legal or financial advice, you should makes plans to sell the house as quickly as possible once you’ve aligned that divorce is inevitable. By getting the property sold and funds cleared, you’re simplifying the divorce process just that much more. And by working with the right buyer, one who will give you a fair offer, it will create more equity to eventually divide between the two of you.
Putting your house up for sale before getting divorced also lays the framework for your new separate lives. It lets you both move out and begin as single and separated lives in separate homes.
And lastly, selling the house before your divorce benefits you from a tax perspective too. It’s not uncommon for both spouses in a divorce to leave the marital home, which then classifies the house you previously shared into a second home for you both. Work with a professional tax advisor to iron out all of the details around income tax, tax brackets, tax rates and so forth.
If you and your partner have jointly decided to sell a house during divorce, then try reaching out to a local investor. They can often work with you both to get you a cash offer that is quick and meets your expectations. Working with realtors or real estate agents is not going to be the best use of your time in this type of transaction.
If you’re in or around Philadelphia, call or contact Signature Properties. We buy houses with tons of experience helping sellers get out from properties that can tie up divorce proceedings and create an utter mess. We make sure both parties walk away with some money, feeling confident about the outcome.
The findings and information in this article are focused on Pennsylvania, however it is applicable in many locations such as Philadelphia, York, Butler, Allentown, Levittown, Lancaster and much more!
Best Way To Sell My House Pennsylvania
Signature Properties provides the easiest and simplest way to sell your house in Pennsylvania. We buy houses through fair and honest cash offers.🙂 Whether you are avoiding the bank from foreclosure, coming into an inheritance, going through divorce or any other situation – we have real estate solutions to get you the outcomes you desire when you sell your house to us. We help homeowners with costly home repairs, mounting liens, code enforcement violations and even vacant homes. Are you trying to sell your house in surrounding areas or other counties and states near Pennsylvania? We buy properties in New Jersey and Delaware as well as many other towns! In fact, we buy homes all over Pennsylvania. Come find out why selling to an investor is becoming the newest and best way to sell your house in Philadelphia in 2023 and beyond!