When a marriage ends, the house is often the biggest thing two people own together. It can also be the hardest to talk about. One person may want to stay, the other may need their share to start over, and both may be tired of the arguing. Selling the house is a common answer, and it's worth doing carefully.
We're not attorneys and this isn't legal advice. Divorce and property rules are complicated, and every case is different, so please work with a family law attorney and talk to a CPA about taxes. What we can do is explain how a house sale works when two people are going separate ways, from the side of a buyer who has seen a lot of them.
Start with who owns the house and who has to sign
California is a community property state, and how the house is treated in your divorce depends on things like when it was bought, whose money paid for it and how title is held. Your attorney will sort out who owns what. For the sale itself, the practical question is simpler: whose names are on title, and who has to sign?
In most cases, everyone on title needs to sign the sale documents. If one spouse refuses, the sale can stall until the two of you agree or a court gives direction. If a divorce case is already open, there may also be court orders that limit selling or moving money until the court approves. Ask your attorney before you list or sign anything.
Your options for the house
- One spouse keeps it. That usually means refinancing to take the other's name off the loan and paying out their share. It works when the person staying can qualify for the loan alone.
- Sell and split the proceeds. The most common path when neither person can or wants to keep the house. Loans and costs are paid off through escrow and the rest is divided the way your agreement or the court says.
- Hold it for a while. Some couples keep the house until a child finishes school or the market changes. That requires a lot of cooperation, because you stay co-owners.
Listing vs. a cash sale during a divorce
If the house is in good shape and you can cooperate through a few months of showings, offers and negotiation, listing with an agent may bring the highest price. Every decision, from the list price to which repairs to make to whether to accept an offer, needs both of you to agree, so think honestly about how well that will go.
A cash sale is simpler. There are fewer decisions to make together:
- One price, one date. You agree on one written offer and one closing date instead of negotiating repairs, credits and appraisal gaps.
- No repairs or showings. Nobody has to fix the house up, keep it spotless, or leave for showings. That matters if one of you still lives there.
- Escrow handles the money. A licensed, neutral escrow and title company pays off the loan and liens and pays out proceeds according to written instructions both of you sign. Neither spouse has to hold the money for the other.
The trade-off is price. A cash offer on a house that needs work is usually less than what it might sell for after repairs on the open market. Our post on what selling really costs helps you compare the two on your own numbers, and How a Cash Offer on Your House Is Calculated shows exactly how we build ours.
Splitting the proceeds
At closing, escrow pays the mortgage, any liens, property taxes owed and closing costs. What's left is the net proceeds. How that money gets divided is up to your agreement or the court, not the buyer. Escrow follows the written instructions it receives, and many couples ask escrow to split the funds directly, or to hold them until there's an agreement or a court order. Your attorneys can tell escrow exactly what to do.
Ask a CPA about taxes before you sell. Whether you owe tax on a gain, and how it's split between you, depends on your situation.
Timing the sale
Some people want to sell before the divorce is final, and some after. There can be reasons for either, including taxes, the court schedule, and where everyone will live. Talk it through with your attorney first.
Once you're ready, we can close in about 7 days or on the date you pick. If one of you needs to move out first, or needs money for a deposit on an apartment, we may be able to advance up to $30,000 before closing on qualifying homes.* Any advance comes out of the proceeds at closing, so both of you and your attorneys should agree to it.
Making it easier on both of you
- Talk to us together, or separately. We're happy to walk through the offer with both of you, or with each of your attorneys.
- Put everything in writing. The offer, the closing date and what happens to belongings left behind.
- Sign separately. Escrow can arrange separate signing appointments or a mobile notary, so you don't have to be in the same room.
- Leave what you don't want. Furniture and belongings nobody wants can stay. That's one less thing to divide.
Who's actually buying?
When emotions are high, a pushy buyer can make things worse. Some companies sign a contract and then try to sell it to someone else, which can mean more strangers at the house, delays and a lower price near closing. Ask any buyer whether they're the one actually buying the house, and read No Middlemen for what to look for in the contract.
We're family-owned, we've bought 359 homes in Southern California since 2011, and we buy every house ourselves. If you'd like a no-obligation offer to compare against other options, call us at (909) 833-4848 or start with your address.
We buy houses as-is across San Bernardino County, Riverside County, Los Angeles County and Orange County, including San Bernardino, Fontana, Riverside and Pomona.
*Cash advance of up to $30,000 is available case by case, on qualifying homes and situations only, and is subject to our review of the property and title. Any advance is subtracted from your proceeds at closing. It’s money paid to you, never a fee: we never ask sellers to pay us anything up front.
This article is general information, not legal, tax or financial advice. Every situation is different, so talk to a real estate attorney, CPA or other qualified professional about yours.