Selling a House During Divorce in Texas Guide
When couples get divorced, many of them decide to sell their Texas homes. The reasons may be finances, wanting a change, or other possibilities. For any of these reasons or others, it’s wise for sellers to avoid rushing into the process. A house is one of the most common shared assets, and dividing it during a divorce can be complicated. If you’re facing a divorce and a possible marital home sale, it’s important to know how to approach the processes correctly. This guide will cover some common questions of sellers and provide useful information about Texas home sales during a divorce.
Table Of Contents
- How Does Selling Your House During a Divorce Work in Texas?
- Who Gets the House in a Divorce in Texas?
- Should I Sell My House in Texas Before or After a Divorce?
- Who Gets To Stay in the House During Divorce in Texas?
- Alternatives To Selling During Divorce in Texas
- Divorce House Sale Texas Frequently Asked Questions
- Easiest Way To Sell a House During a Divorce in Texas
How Does Selling Your House During a Divorce Work in Texas?
When you’re facing divorce, it’s important to take these steps in the correct order.
Step 1: Find a Divorce Attorney in Texas
Although you’re not required by law to work with an attorney for a divorce, it’s wise to do so. Some couples have a mediator handle an uncontested divorce if it’s simple and there aren’t any children or marital assets involved. However, when there are child custody issues or assets like a home involved, it’s important to have a lawyer who understands state divorce laws. Each spouse should have their own attorney. Some divorce lawyers handle estate and family law as well.
Step 2: Determine Who Owns the Real Estate
Before trying to sell a Texas home, it’s important to determine who legally owns it. With divorces, the courts typically divide marital property equally since it’s a community property state. This means that assets of value bought with communal funds during the marriage are equally owned by each spouse. However, property that was owned before the marriage or bought after a legal separation isn’t included. Also, gifts and inheritances may not be included. If there are any prenuptial agreements, those often override community property laws in a divorce.
Each community property state has specific laws, which is why the previous step is so critical in a divorce case potentially involving a home sale. For example, while some states are stricter with dividing assets equally in divorce cases, others like Texas may use a partial equitable division approach. For instance, a judge may decide to not split all the marital assets 50/50 in a divorce if there are compelling reasons, instead, according to Tex. Fam. Code § 7.001, the judge may separate the assets in a just and right manner. However, in many cases, a house that’s joint property is often sold to ensure both individuals receive their fair portion of the proceeds.
Step 3: Decide How You Want To Sell the Property
If you decide to sell the Texas house because it’s joint property or simply to move on with a fresh start, the next step is deciding on how to approach the sale. For example, you may decide to work with a real estate agent or an investor who offered to buy your Texas house. Some sellers also advertise their properties on their own. When working with a real estate agent or Realtor, it helps to first sign a settlement agreement. This specifies the agent’s roles and other important details. Divorce lawyers can often help sellers in drafting these.
Divorcing sellers who want to avoid costly hassles often work with a local Texas cash home buyer. The process is quicker since the entity does not need lender approval or ask for inspections, repairs, and other requirements that are common for sellers who choose agents. Trying to time the sale of a home with divorce proceedings can be stressful for sellers. Sales through cash buyers are typically fast, and there aren’t agent fees or other expenses that are common for sellers with third-party home sales entities.
For those who prefer to sell a Texas house on their own during the divorce process, trying to find potential buyers can be challenging. Trying to sell marital property can also be difficult if both parties have differences that lead to quarreling. However, this option gives the sellers full control and eliminates agent fees.
Step 4: Sell the House
In most divorce cases, couples can eventually agree on a sale approach for marital real estate assets. If one spouse refuses to sell joint property, a judge may order it to be sold for equal division of assets. How long the sale takes to finalize depends on the selling method chosen. For quick house sales during a divorce, cash home buyers are ideal. They usually make a fair offer and can close within days instead of several weeks or months. Alternately, working with an agent takes more time, communication, and money. Some people must work hard by keeping up a costly staged house during the process as well.
Step 5: Divide the Proceeds From the Sale
Once the house is sold, the proceeds are divided equally. It’s important to factor in other possible costs associated with selling. Depending on individual circumstances, these can differ. They may include unpaid property tax liens in some cases. In others, there may be a mortgage, a refinance, or an equity line of credit to pay off first. Realtors or agents must also be paid if you worked with them instead of selling to a cash buyer. After all financial obligations are satisfied, each individual receives half the proceeds if the property was jointly owned.
Who Gets the House in a Divorce in Texas?
This depends on the factors of your individual situation. As covered in earlier sections, the state primarily uses community property laws to divide assets purchased jointly. A Texas home you bought on your own before you got married or after you legally separated may still belong to you. The same may apply to a home included in a prenuptial agreement. A lawyer should look over any prenup, deeds, and other legal paperwork to determine who’ll get the house.
Just because a house is jointly owned doesn’t mean it must be sold in every case. For example, a couple may decide that the partner with primary custody retains the house, and the other individual may get other joint assets that are similar in total value. Each case is different.
What happens when one spouse wants to sell and one doesn’t if they both own the home? If this happens, the spouse who wants to keep the house may be able to refinance the mortgage balance to keep the residence. What if neither spouse wants to sell? In such a case, the court decides what’ll happen.
Should I Sell My House in Texas Before or After a Divorce?
When shared properties are sold depends on individual cases. Some sellers choose to wait until after the divorce papers are signed to sell the home. Others wait until the final divorce decree is issued. If spouses agree to sell a joint property before the finalization of their divorce, it’s important to have a signed agreement beforehand to avoid some hassles and potential disputes. The agreement may outline the method of selling, the sale price, and other factors an attorney recommends.
Spouses who sell after the divorce is finalized may do so by choice or because of a court order. Whether you sell before or after, it helps to consider urgency, any new home purchases, and individual finances. For example, sometimes spouses can’t afford to wait months to potentially sell a Texas home, and they work with a cash buyer. One or the other may also want to purchase a different home, and waiting may not make sense. Also, if one spouse is paying more toward the mortgage during the divorce process, this can make it more difficult than if they’re both paying equal amounts.
Who Gets To Stay in the House During Divorce in Texas?
Who stays in the home during divorce proceedings depends on several things. Typically, courts prefer to see the parent with primary custody reside in the home to give the children some stability during this difficult time. Prior ownership before the union may also play a role in determining who stays. There may be other specific factors considered as well. For instance, any modifications made to the home related to one spouse’s disability could make it more suitable for that individual to stay. If there was a natural disaster, pandemic, or similar extreme event, you couldn’t be forced to leave even if your partner wanted you out.
Alternatives To Selling During Divorce in Texas
Some couples may decide to negotiate a different arrangement. It’s important to seek the advice of a lawyer before deciding on an alternative option instead of choosing to sell.
Co-Own the Property
Spouses can decide to share ownership of a Texas home after a divorce. This may happen when the market is bad or the house is underwater. It’s important to have a written agreement about who’ll handle taxes, utilities, mortgage payments, insurance, and more. Also, it’s important to specify how the property can be used. For instance, a couple may decide to rent it out on a monthly basis or as a vacation home to split the income. Although this arrangement requires amicability, it can be a useful tool for waiting until the market improves to sell.
Buy Out the Other Spouse
In this sale arrangement, one spouse pays half the current value of the home to the other. A refinance is one way to acquire funds in some instances. Many people wonder if property transfers are taxable in such cases. If a Texas house is transferred from one spouse to the other during a divorce, it’s typically exempt to a point from capital gains taxes under Section 1041(a) of the U.S. Tax Code. A buyout is something people often do when they want their kids to enjoy the stability of remaining in their childhood home or staying in a familiar school. In addition, the house may have a personal or special meaning to one spouse and not the other.
Divide the Marital Assets
A marital home and other assets can be divided if there are other valuable assets. For example, one person may keep the primary marital home. There may be another marital home that’s a vacation property, and the other spouse may want the title to that. Some other marital assets involved in divorce proceedings may be boats, RVs, retirement funds, cash, bonds, or stocks. Those are just some examples. There may also be rare or valuable books, art, jewelry, and more. Dividing assets can be a good way to avoid making lump-sum cash payments or dealing with the hassles of selling a house.
Divorce House Sale Texas Frequently Asked Questions
Trying to comb through articles to find answers can feel challenging. This FAQ section condenses some common questions and answers for sellers going through a divorce.
Can I Sell the Texas House Before the Divorce Is Final?
Yes, divorcing sellers can sell a Texas home they both own before the divorce decree is issued when both agree. One spouse arranging the sale of a home that both spouses own without the other’s permission is illegal. If it’s part of the divorce settlement of divided assets, the receiving spouse can sell it.
Is Texas a 50/50 Divorce State?
Although it’s a community property state, this doesn’t mean all marital assets are split exactly 50/50 during a divorce. Courts typically aim for a fair division of assets and debts close to 50/50 and may make some exceptions for certain circumstances. It’s important to communicate any special needs or conditions to an attorney.
How Does Capital Gains Tax Work in a Divorce?
There’s a $250,000 exclusion limit for avoiding capital gains tax from a house sale to the other spouse during a divorce. This exclusion applies for up to a year after the divorce. For example, a divorced seller may decide to arrange a house sale a few months after the divorce is final. In terms of IRS rules, the sale is considered incidental to the divorce since it’s within a year. Divorce attorneys can explain other tax rules and considerations.
Can I Force My Ex To Sell the House After the Divorce?
It may be possible to force the sale of a Texas house if being courteous and asking for the other partner’s cooperation fail after the divorce. However, this usually only happens with a court’s decision that a sale is necessary to divide spousal assets.
How Do I Sell My Texas House if One Partner Refuses?
If a buyout or other options aren’t feasible, the court must get involved to help push a sale. When a sale is part of a divorce settlement and requires cooperation from both spouses, they must comply. Failure to do so can lead to legal consequences. Contact a divorce lawyer if the other spouse is unlawfully refusing to sell.
Easiest Way To Sell a House During a Divorce in Texas
If you want a good value for your Texas home or have further questions, contact us – at A-List Properties . A business like A-List Properties that buys Texas houses for cash is the ideal solution after a divorce. We buy mobile homes, houses, apartments, duplexes, and more. If your Texas home has title issues, you’re at risk of foreclosure or there are other issues, we’ll still buy it for cash.
With house sales for cash, costly repairs aren’t needed. They’re not an important consideration in our buying decision. We buy Texas houses as-is and fix damage after we purchase them, and we buy them even if sellers leave behind their belongings. Our business works with sellers in all situations. Also, we understand the unique needs of sellers facing divorce. A-List Properties works with sellers of inherited properties, relocating sellers, and home sellers in many other situations as well. With us, there are no hidden fees when we buy houses. We pride ourselves on our excellent service and care for house sellers. This information applies to Dallas, Houston, San Antonio, Austin, and other cities in the state.