How to Sell Your California Home After a Divorce

How to Sell Your California Home After A Divorce

Divorces are already difficult. Dividing your assets and selling your home adds another layer of complexity to this time in your life. Even the most friendly and levelheaded couple will need to be patient through this process.

Despite this, your future self will be thrilled if the divorce sale goes well. When the property has sentimental value to you, like a family home, you need to understand the laws in California regarding divorce sales.

Just so you know, we’ve written a book called Best Selling Options in a Divorce. We’d like to make your divorce sale go smoothly by giving you a free copy.

Divorce Sale

Let us help you navigate this divorce sale - Image source

California Laws on Marital Property 

In California, the assets or valuables in your possession during a marriage could be considered marital property. This means houses, boats, airplanes, jewelry, antiques, and more. 

Monetary assets are also considered marital property under the right circumstances, meaning that investments, patent filings, and bank accounts are included. 

The marital property gets designated in one of three ways.

  • Community Property: If property was purchased or acquired during the marriage by both people, that is community property. Homes likely fall under this term if they were purchased during a marriage.
  • Separate Property: If you receive something specifically intended for you and not your spouse, that might be a separate property in California. For example, if you inherit a home from your relatives or even gifts and heirlooms, those are likely separate property. 
  • Commingled property: In longer marriages, the line between separate and community property becomes more difficult to see. When separate property becomes mixed with community property, like paying for a spouse's debt using a joint bank account, it sometimes becomes commingled property.

Separate property can transform into something that both spouses have equity in. For example, some homeowners might create a document that makes their home commingled property, rather than the separate property of one spouse.

terms and conditions

Let’s see the first steps to take after defining property ownership - credit to Puwasit Inyavileart

First Steps for Selling a Home During a Divorce

You’ve got to start by finding out what kind of property your home is; separate or community?

You might already know the answer, but if you don’t, here are some key indicators. 

Check the title.

If the home was purchased during a marriage, it’s likely part of the marital property. If the property was owned by one spouse prior to the marriage, then their name is probably the only one on the title. In most cases, that means they’ll have legal ownership rights in California. Spouses that aren’t on the title can still prove community property by showing the home was bought with certain intentions. 

Who pays the mortgage?

When both spouses are making mortgage payments, it makes perfect sense that they should both get some equity in the home. When both spouses contribute, the home is generally considered community property - even if that home was bought before the marriage began. 

Once the ownership is clear, it’s time to sort out equitable distribution before selling the home.

If you’re concerned about selling your home but not having another home to move into after, fear not. Our Guaranteed Sale Program will make your sale risk-free and give you the peace of mind to move forward.

Your Options for Selling During a Divorce

Divorcing couples in California usually choose one of these two options for selling their home.

When the couple’s home is deemed community property, things are simple. The spouses sell the home to a third party by using a California realtor and divide the equity from the sale. The terms of the divorce settlement will be agreed upon before the sale.

Some spouses might decide to keep living in the house by buying their partner's equity. This is known as a “buy out” and it’s one way that someone can stay in the home after a divorce.

Depending on how the house is owned

  • If the home is owned, then one partner pays for the other’s equity.
  • If the home is mortgaged, then the person who wants to live in the home will have to restructure the loan into their own name. 

If you want to hear what two experienced realtors think your best options are, we’ll send you our free book!

Best Selling Options in a Divorce is written by Bob and Sandy Jamison, two of the Bay Area’s top real estate agents and founders of the Jamison Team. They have a wealth of combined experience dealing with divorce sales and getting the most profit possible, even in complex situations.

We’ll send you a free copy of Best Selling Options in a Divorce – just click here to order your free copy. 

Best Selling Options Ina Divorce Book by Sandy and Bob Jamison

Our detailed guide to your options during a divorce sale

Splitting the Home Equity in a Divorce 

California splits community property right down the middle in a property division, giving both spouses 50%.

Depending on how agreeable both parties in the divorce are, there are a few different ways to divide the equity. Assets could take the place of equity in the home, and vice versa. 

So, if you want to keep more equity in your home, there are ways to exchange other assets to retain more equity in your marital home. 

In California, the Moore/Marsden calculation is used to divide property during divorces. The concept is quite logical and it uses several factors, such as:

  • The home’s market value during marriage and divorce.
  • The purchase prices of the home.
  • The principal amount paid during the marriage
  • The property’s increase in value during the marriage.

When your final equity distribution is calculated, you can start the next steps.

Should You Sell or Choose a Different Option?

Now you’ve reached a very important stage of the divorce sale process. 

If you know how much equity you have in the home, what should you do with it?

If there’s been an order to sell the home, then both parties need to cooperate to list, show, and promote the home. You’ll have to select a real estate agent in California and follow the terms of the settlement.

If the residence is a partially separate property, it won’t be an obstacle to selling the home. In this case, the divorced couple can agree to an unequal split that allocates the right amount to each spouse. 

If one spouse doesn’t agree to sell the home, the issue might need to go to court for resolution. One party of the deal might disagree for many different reasons; maybe they think the split is unfair or they simply have too much emotional attachment to the home. 

We’ll go deeper into this topic in the future, but if you have more questions, our team is here. 

The Jamison Team has been selling homes in California and the Bay Area since 2008, helping many divorce sales go smoothly along the way. The team can provide a personalized roadmap for how your divorce sale will likely go and explain some of the costs, plus what you can expect to gain. 

Trust us - we’ve literally written a book on your selling options during a divorce. Have you picked up your free copy yet?

More Questions? Follow-up With Us!

If you have more questions about what to expect from the markets around the Bay Area, don’t be afraid to reach out to us today. Our experts are experienced in all property types and the entire San Francisco Bay Area, and we can help you to find what you need to know today.

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