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Find out how much equity you’re entitled to
Divorcing couples won’t always split everything 50-50, and a number of factors affect how much of a home’s value each is 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,” Sirkin says.
Your state’s property division laws
Community property states
Nine states have community property laws, with three more allowing you to opt into community property division, which essentially splits all marital assets 50-50.
States with community property laws:
- Arizona
- California
- Idaho
- Louisiana
- Nevada
- New Mexico
- Texas
- Washington
- Wisconsin
Meanwhile, residents in Alaska, Florida, Kentucky, South Dakota, and Tennessee can opt in to a community property agreement. Community property law also applies to registered domestic partners in California, Nevada, or Washington.
Non-community-property states
Also known as common law property states, the remaining states follow separate property laws, meaning that a house purchased by one spouse before marriage remains solely theirs.
Common law property states:
- Alabama
- Arkansas
- Colorado
- Connecticut
- Delaware
- Florida
- Georgia
- Hawaii
- Illinois
- Indiana
- Iowa
- Kansas
- Kentucky
- Maine
- Maryland
- Massachusetts
- Michigan
- Minnesota
- Mississippi
- Missouri
- Montana
- Nebraska
- New Hampshire
- New Jersey
- New York
- North Carolina
- North Dakota
- Ohio
- Oklahoma
- Oregon
- Pennsylvania
- Rhode Island
- South Carolina
- South Dakota
- Tennessee
- Utah
- Vermont
- Virginia
- West Virginia
- Wyoming
- District of Columbia
Even a home bought during the marriage under one spouse’s name can remain separate property if it wasn’t used to benefit the other spouse or the marriage. How your state categorizes property could influence how much equity you’re entitled to from the home sale.
Premarital assets invested in the property
“States vary drastically with regard 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,” Sirkin says.
For example, let’s say you brought 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 and getting the home sold:
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,” Sirkin says.
If you’re open to letting them purchase your share of the home, your partner might be more willing to negotiate on other issues, like custody agreements or 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,” Sirkin recalls.
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 in your best interest to forgo the 50-50 split you’re entitled to and offer a financial bonus from the home-sale proceeds to your uncooperative partner to secure 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,” Van Wig says. 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,” Van Wig says. However, if an agreement can’t be reached, you’ll want to talk to an attorney as soon as possible.
