Disclaimer: Information in this blog post is meant to be used for educational purposes only, not as legal advice. If you need assistance navigating a complex transaction, HomeLight always encourages you to reach out to your own advisor or legal counsel.
Divorce is difficult. Selling a home is difficult. Trying to navigate both with a partner who vehemently disagrees with you is another level of stress entirely. While you might be jumping to get a court order at the first sign of an impasse, our conversations with real estate experts and a reputable divorce attorney would indicate that like most legal battles, litigating should be your last resort.
“What the stubborn partner needs to realize is that the home sale is going to happen in some form no matter what,” explains Allison Van Wig, a top-selling real estate agent in Los Angeles, CA with experience helping divorcing clients. “Either you can negotiate with your spouse, or yOKou go to court with your divorce attorney and the judge will order the home sold. And with all of the attorney’s fees and all of the court appearances, that’ll probably end up costing you an extra $40,000.”
If you’re here seeking help, you’ve probably already tried persuading your partner in some shape or form and aren’t sure what to do next. To help break a stalemate, follow this guide with tips on how to:
- Get to the root cause of your partner’s concerns
- Find out how much equity you’re entitled to and investigate your state laws
- Weigh your main options for moving forward, including court (if you absolutely need it)
Get to the root cause of your partner’s concerns
Happy marriages don’t typically end in divorce, which is why many couples bring a lot of extraneous baggage into the process of selling a home after a split. Those feelings of anger, resentment, sadness, and betrayal can lead to decisions that wind up hurting both of you.
In an emotionally charged situation, you may assume that your partner’s refusal to sell comes from a place of vindictiveness, but it could also be because:
- They feel an overwhelming sense of sentimental attachment to the home.
- They’re holding out hope for a reconciliation.
- They’re still grieving the loss of the marriage and the home where they raised their children.
- They’re afraid that they won’t be able to afford a similar home once the divorce is finalized.
“Some partners who are stonewalling are simply afraid that their children will be negatively affected, they’re having trouble envisioning their future living situation, or
they’re afraid that their rights will not be protected,” explains Corrie Sirkin, an experienced divorce attorney with offices in Manassas and Fairfax, Virginia.
Start by trying to have an honest conversation.
If you blow your chance to negotiate an amicable home sale with your reluctant partner, they can make the home sale difficult every step of the way. They can refuse to sign documents throughout the process. They can become unreasonable over accepting an offer. And they can even make it difficult to find a buyer at all.
“It’s a challenge to show a home when you have one partner who’s unwilling to sell. They can make a mess in the house, or be unreasonable about scheduling showings,” explains Van Wig.
“I offer the reluctant seller a $50 gift certificate to take the kids out to eat or to the movies. I’ve learned that it’s best to spend a little money to let the partner who’s refusing to sell know that I’m on their side, too. And that I’m working for the best for both of them.”
But if you can convince your partner to get on the same page before the selling process begins, it can save you both an immense amount of stress and hassle.
Find out how much equity you’re entitled to
Divorcing couples won’t always split everything 50-50, and there are a number of factors that impact how much of a home’s value you’re entitled to. These include:
Who’s on the deed
You can find this information by checking with your county recorder’s office or by going through a title company. However, even if your partner isn’t on the deed with you, you may not be able to sell the house without their blessing.
If the house was purchased during the marriage, then they may still have rights to equity from the home sale even without being named on the deed. You may even still need their signature to sell the house.
“Many states require the signature of a spouse at closing even if the spouse is not on the deed or the mortgage. Some states do not. Without the agreement of the other partner, it may be necessary to file a partition action for which you would need a real estate attorney,” explains Sirkin.
Your state’s property division laws
Nine states have community property laws, (and three more let you opt-in to community property division) which essentially splits all marital assets 50-50.
The remaining states have separate property laws. In these states, a house purchased by one spouse prior to marriage remains the property of that spouse. A home purchased during the marriage under one spouse’s name can also remain separate property if it was never used to benefit the other spouse or the marriage.
You could be entitled to more or less equity from the home sale depending in part on how your state is categorized.
Premarital assets invested into the property
“States vary drastically with regards to how much equity each spouse is entitled to. Some states even take into consideration how much each party has contributed to the property from separate or premarital assets,” advises Sirkin.
For example, let’s say you brought a private savings of $100,000 into the marriage, and those funds were used as a down payment on the house. In some states, that money is considered a premarital asset, so you may be entitled to receive that money back (or a portion of it) out of the home sale proceeds.
But this isn’t true in every state. In some areas, this premarital asset is regarded as a gift to your spouse rather than a premarital asset, so the court will not factor that into the distribution of the home sale proceeds.
Consult an experienced divorce attorney to help you understand the property laws in your state and how they could affect your home sale.
Weigh your options: 3 ways to convince your stubborn partner to sell
Let’s say you’re entitled to a generous portion of your home’s equity. Great! But you’ve still got the problem of getting the house sold while your partner is refusing to cooperate. According to the experts we spoke with, these are your main options for moving forward:
1. Ask your partner to buy you out
Reluctant partners who want to keep the home for the sake of the kids, for sentimental reasons, or simply to maintain their current lifestyle may be persuaded to buy out your equity in the home.
While the home won’t go on the market like a traditional home sale, the buyout will require your partner to refinance the mortgage and place the deed solely in their own name. And letting them buy you out of the house can work in your favor.
“Homes often have more sentimental value than fair market value. If you are the spouse that wants to sell, you may be able to use that to your advantage to negotiate a better overall deal,” says Sirkin.
When you’re amicable about letting them purchase your share of the home, your partner may become agreeable in other areas, such as better custody agreements or more reasonable alimony.
2. Exchange your equity for another valuable asset
“My clients and I have been able to successfully sell a house by negotiating other assets in exchange. For example, in one case, the parties had a valuable coin collection. When one party didn’t want to sell the home, the other party negotiated receiving the coin collection which had as much value as the equity in the home,” recalls Sirkin.
This type of trade is known as an offset, and it’s a viable option for a spouse who wants to keep the house but doesn’t have the financial means to refinance or purchase their partner’s share outright. Common assets that are exchanged as offsets for home equity include vehicles, retirement accounts, or vacation home equity.
3. Offer a financial bonus to agree to the sale
Sometimes it’s to your benefit to forgo the 50-50 split that you may be entitled to and offer your partner who’s refusing to sell a financial bonus out of the home sale proceeds to gain their cooperation.
“If one homeowner doesn’t want to sell, we might offer them an extra $5,000 to $10,000 or more out of the proceeds to move forward.,” advises Van Wig. Sometimes this may be a less expensive option than bringing in an attorney right away, so long as the other party is willing to cooperate and come to a reasonable agreement.
“If we have to go through the attorney, the sale is usually going to happen anyway because the court will order it. It’s just going to take longer, and it will mean less money for everyone involved.” However, if an agreement can’t be reached, you’ll want to talk to an attorney as soon as possible.
Power to your partner: Let them choose the best deal
Here’s an approach: Present all of the options — buyout, offset exchange, closing bonus, and any others you’ve been able to work out. Then, let your partner weigh in on which path they prefer. You might even suggest that they bring their own attorney or real estate agent into the proceedings so that they feel independently represented.
An experienced divorce attorney or a top real estate agent with divorce sales experience can help you frame these options with your partner’s perspective in mind.
What’s great is that all three options could be a win for you, too. When the home sale or asset exchange can move forward, you save on divorce attorney fees and get your freedom to start a new life unencumbered by a messy court battle.
No matter which option your partner selects, make sure to get the agreement in writing, preferably with an attorney. In the event of a sale, buyout, or offset arrangement, you’ll need to outline details such as:
- How the equity will be split
- Who pays if expensive repairs are needed on the home
- How the paying partner will be reimbursed (such as with the home sale proceeds)
- How you will agree on an offer if the home is sold
“We frequently draft partial agreements that deal with only the sale of the home and the proceeds when the parties cannot agree on all terms of the divorce,” explains Sirkin.
No dice? Ask a family law judge to compel a sale
Maybe your former spouse would love to buy your share of the home, but they can’t afford to do so. Or perhaps the partner refusing to sell won’t accept the financial incentive or an equity trade. Whatever the reason that negotiations broke down, the result is that the court will compel the sale of the home.
“When a judge orders the home sold, the divorce attorney submits three or four Realtors®, and then the judge will choose one after checking their internet presence or sales record. Then the attorney calls in the agent to sell the house,” explains Van Wig.
Don’t skip negotiation attempts because you think a court ordered sale will speed the process up, though. The house is often the last to go when dividing assets during a divorce, and there’s good reason for this.
“In many states, courts will normally not compel the sale of the home until a full trial on all financial aspects has occurred — unless there are extenuating circumstances like a foreclosure,” explains Sirkin.
“The Court would not want to compel the sale of the home when child support, spousal support, and allocation of assets and debts had not occurred. If the court compelled the sale without support, then one party could be made homeless.”
Challenges with compelling a sale
Even after the court compels a sale, your partner can still throw wrenches into the process.
“I’ve had a few cases where it was a fight until the very end and we went to court for every little thing. We went to court to get the listing agreement signed, then to get an offer accepted, then to get the disclosure signed, and so on,” recalls Van Wig.
If the reluctant partner is still being uncooperative (refusing to sign documents, resisting showings, etc.) the judge can always sign on their behalf or force the unwilling partner to move out prior to listing the home for sale. But this all takes time and money.
And remember, your partner may still be entitled to equity even if they’re not listed on the deed, which gives them the right to take legal actions that could impede the home sale.
“Even if your partner is not on the deed or the mortgage, if they have a potential right to money from the home, then they could file a lis pendens on the property pending the outcome of the litigation,” advises Sirkin.
“A lis pendens tells a potential buyer that a suit regarding the property is pending. This negatively affects the seller’s ability to sell the home as the buyer is on notice that title to the property may not be clear.”
This doesn’t just hold up the sale, it can also impact the quality of the offers you get. When buyers become aware of a dispute over the property or that there’s an order compelling the sale of the home, you’ll likely see more lowball offers than great ones. Buyers will sense that you’re desperate to unload the home and will want to avoid an extended escrow due to the divorce proceedings.
Cooperation is hard, but it saves money
If only you could just put out a for-sale sign up and move on, right? As painful as the process is, there is likely no way to sell the home without some cooperation from your partner (even if it’s compelled by the court).
“You can list the home with one signature, but you can’t sell it without both signatures,” warns Van Wig. “So listing a home without the cooperation of both partners is a waste of time. And if a seller pretends that they’re the only one on the title and signs a contract with a buyer, they could be held liable for damages done to that buyer.”
The bottom line is this: the less you cooperate with one another, the less money you’ll probably get in the end.
No matter how you get to the finish line, make sure to protect your interests by consulting a seasoned divorce attorney and a real estate agent with divorce sales experience to walk you through your best options.
Header Image Source: (Etienne Boulanger / Unsplash)