Selling Your House During a Divorce in Minnesota

Selling a house during a divorce is not an easy task.

A divorce is one of the most stressful, emotionally charged things a person can go through. And your house is probably the most valuable thing the two of you own. Even if you're splitting on good terms, figuring out the house while everything else is changing can feel overwhelming.

We've helped a lot of homeowners in the Twin Cities going through a divorce, so we thought we'd share some advice. If you're wondering what your options are, keep reading.

Before you do anything, know this one rule

Once a divorce is filed in Minnesota, the papers come with what are called temporary restraining provisions. In plain English, neither of you is supposed to sell or get rid of major assets (and the house is a big one) without the other person's written agreement or a court order.

So even if the house is only in one of your names, talk to your divorce attorney before you list it, sign anything with a buyer, or take out a loan against it.

Figure out who owns the house

The first thing to determine is who actually owns the house, and who's on the mortgage. Those aren't always the same people.

In Minnesota, property you bought during the marriage is generally considered marital property, no matter whose name is on the title, and the court divides it in a way that's "just and equitable." If one of you owned the house before you got married, or it was inherited, things can get more complicated. This is a question for your attorney.

Your options for the house

There are basically three options...

1) Sell the house and split the equity

This is usually the easiest and cleanest route, especially when there aren't kids at home. You sell, pay off the mortgage, and split what's left the way you've agreed (or the way the court decides).

It also simplifies things by getting rid of a shared mortgage, and if the house sells quickly, it can help the whole divorce move along.

2) One of you keeps the house and buys the other out

This is common when there are kids and one parent wants to keep them in the same house and school.

To keep the house, you'll generally need to refinance the mortgage into your own name, borrowing enough to pay off the old loan and pay your spouse their share of the equity. The lender is going to look at whether you can afford the house on your own income. If you'll be getting spousal maintenance, that can usually count as income.

One big thing a lot of people get wrong. Your spouse signing a quit claim deed gives you their ownership, but it does NOT take their name off the mortgage. If you don't refinance, they're still on the hook for the loan, and late payments hit both of your credit. That's why refinancing (or a lender approving a loan assumption) is so important.

3) Keep owning it together and sell later

Some couples agree that one spouse stays in the house for a set time (often until the kids reach a certain age), and then it gets sold. It can work, but it takes a lot of trust and communication... something that's often in short supply during a divorce. Get every detail in writing: who pays the mortgage, taxes, insurance and repairs, and when it gets sold.

A few tips if you're selling

Keep the house in good shape. Emotions run high, and someone may feel like taking it out on the house. Don't. You both want top dollar, and damage can come back on you in the settlement.

Use a neutral third party. Disagreements about the price and the timeline are common. A real estate professional, whether it's an agent or a direct buyer, gives you both someone neutral to work with.

Set a timeline and stick to it. Agree in writing on who is dealing with the sale, how showings and cleaning will be handled, who pays for what, the lowest price you'll accept, and how the money will be split.

Don't forget taxes. If the house was your main home, each of you can generally exclude up to $250,000 of gain from capital gains tax (more if you're still married and filing jointly). Talk to a tax professional before you sell.

Plan your next move. If you're buying another house, be careful about timing. Divorces get hung up in court and house sales get hung up for a million reasons. You don't want to be locked into a new mortgage when everything else falls apart.

Selling your house fast for a fair all-cash price

If you list with an agent, it can take months before the house sells and closes. That's months of deciding who mows the lawn, who pays the bills and who deals with the showings. Things you never argued about before can quickly turn into fights.

A lot of divorcing couples choose to sell directly to a local buyer like Trademark Properties instead:

• We buy the house as-is. No repairs, no cleaning, no showings.
• No commissions, and we pay the closing costs.
• You both know the price and the closing date right from the start.
• We close at a neutral, local title company, which makes sure the money goes where your agreement or court order says it should.

A fast sale gives you both some closure so you can move on with the next chapter.

We're not attorneys and this isn't legal advice. Every divorce is different, so please talk with a Minnesota family law attorney before you make decisions about the house.

If you want to talk through your situation, give us a call at Call us or fill out the form. We'll take a look at the house and make you a fair, no-obligation cash offer. We're here for you.