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Divorce and Real Estate Transactions: Understanding the Impact

Divorce is never easy and can be even more challenging when dealing with real estate transactions. Whether you own a home with your spouse or are going through the process of dividing property, it’s essential to understand the legal implications and your options.

In this article, we’ll explore the various aspects of divorce and how it can impact real estate transactions. We’ll cover everything you need to know, from the divorce decree to listing the property, buying someone out, splitting proceeds, mortgage payments, and maintenance.

Divorce Decree and Real Estate Transactions

The divorce decree is the legal document that finalizes the divorce and outlines the settlement terms. As a result, it can significantly impact real estate transactions, especially if the couple owns property together.

In most cases, the divorce decree will include provisions for the disposition of the marital home. For example, it may order the sale of the property, with the proceeds divided between the spouses, or it may award the home to one of the spouses.

If the home is awarded to one of the spouses, the other spouse may be required to sign a quitclaim deed relinquishing their ownership rights. This document transfers any interest the non-owning spouse has in the property to the owning spouse. This is an important document, as it can prevent disputes over ownership and ensure that the owning spouse has clear title to the property.

Listing the Property

If the divorce decree orders the sale of the marital home, the spouses must list the property for sale. Working with a real estate agent who is experienced in dealing with divorce is essential. They can help navigate the complexities of the sale and ensure that both parties interests are protected.

When listing the property, it’s essential to determine the home’s fair market value. This value will be used to determine the asking price and can also impact the division of proceeds. Sometimes, the spouses may need an appraiser to assess the home’s value.

The spouses will also need to determine the listing agreement and commission. The commission is typically split between the listing agent and the buyer’s agent. Still, the spouses may need to negotiate the terms of the agreement.

Buying Someone Out

Sometimes, one spouse may wish to keep the marital home after the divorce. However, this scenario can be complicated, as it involves buying out the other spouse’s share of the property.

The first step is to determine the value of the home. This can be done through an appraisal or by working with a real estate agent to determine the fair market value. Once the value has been determined, the spouses can negotiate a buyout price.

If the owning spouse cannot afford to buy out the other spouse, they may need to refinance the mortgage. However, refinancing can be challenging, as they must independently qualify for a new mortgage. As a result, they may need to sell the home or consider other options if they cannot qualify.

Splitting Proceeds

If the marital home is sold, the spouses will need to divide the proceeds. In most cases, the division will be based on the percentage of ownership each spouse had in the property. For example, if one spouse owned 60% of the home and the other owned 40%, the proceeds would be divided accordingly. However, it’s important to note that other factors, such as the contribution of each spouse to the mortgage payments and the upkeep of the home, can also impact the division of profits.

In some cases, the spouses may also need to pay off any outstanding debts on the property, such as a mortgage or home equity loan. These liens can impact the division of proceeds and should be considered when negotiating the terms of the sale.

Mortgage Payments

If the marital home has a mortgage, the spouses must determine how to handle the mortgage payments during and after the divorce. In most cases, both spouses will remain liable for the mortgage until it is paid or refinanced. The divorce decree may order one spouse to assume responsibility for the mortgage payments or require the spouses to share the costs until the property is sold or refinanced. Suppose the home is awarded to one spouse. In that case, that spouse may need to refinance the mortgage in their name only to remove the other spouse’s liability.

It’s important to note that failing to make mortgage payments can have serious consequences, including foreclosure. Therefore, if one spouse struggles to make payments, they should contact their lender to discuss their options. Sometimes, the lender may be willing to modify the mortgage or offer forbearance.

Maintenance and Repairs

Maintaining the marital home can also be a contentious issue during a divorce. The divorce decree may order one spouse to assume responsibility for the maintenance and repairs, or the spouses may need to share the costs.

If the home is being sold, making any necessary repairs and updates is essential to ensure it is marketable. The cost of repairs and updates may impact the net proceeds from the sale, so it’s important to budget accordingly.

If one spouse stays home, they must assume responsibility for the ongoing maintenance and repairs. This can be challenging, as they may be responsible for costly repairs they need help to afford.

Both spouses must work together to ensure the home is adequately maintained and repairs are made promptly. Failing to keep the house can decrease value and make it more challenging to sell in the future.


Divorce can be a complicated and emotional process, especially when dealing with real estate transactions. However, both spouses must work together to protect their interests, and the process goes as smoothly as possible.

Whether you’re selling the marital home or one spouse is buying out the other, it’s essential to understand the legal implications and your options. Working with experienced professionals, such as real estate agents and attorneys, can help ensure that the process is handled correctly and that both parties’ interests are protected.

Remember, every divorce situation is unique, and no one-size-fits-all solution exists. However, you can make informed decisions and confidently move forward by understanding the legal implications and your options.

If you’re going through a divorce and need assistance with your real estate transactions, it’s essential to work with experienced professionals who can guide you through the process. At TWINCITIES.REALESTATE, we have a team of knowledgeable real estate agents and attorneys who can help you navigate the complexities of divorce and real estate.

Contact Us today to schedule a consultation and learn how we can help you protect your interests and achieve your real estate goals. Our team is dedicated to providing personalized service and tailored solutions to meet your unique needs. Let us help you move forward with confidence during this challenging time.

Jerry Arguello