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When a marriage comes to an end, the family home often becomes one of the most pivotal issues to settle. This is especially true in Texas, where marital assets are generally considered community property.
If you and your former spouse decide—or are ordered by the court—to sell the home after your divorce is finalized, here are essential considerations and steps to take.
1. Understand Community Property in Texas
Texas is a community property state, which means most assets (and debts) acquired during the marriage belong equally to both spouses. If the home was purchased or significantly paid for during the marriage, it typically falls under the umbrella of community property. Even if only one spouse’s name is on the mortgage or the title, the property can still be subject to division in the divorce unless it is established as separate property (such as being purchased before marriage or inherited).
- Key Takeaway: Determining whether your home is community or separate property is the foundation for decisions about its disposition. Consult a knowledgeable attorney if you have questions about how Texas law applies to your specific situation.
2. Review Your Divorce Decree or Settlement Agreement
By the time your divorce is final, your decree or settlement agreement may have already spelled out whether the home must be sold, who controls the sale process, and how proceeds will be divided. Understanding these instructions is critical:
- Timing Requirements: Your decree may mandate that the home be listed for sale within a certain period after the divorce.
- Division of Responsibilities: If both spouses are tasked with managing the sale, clarify each party’s responsibilities, such as handling showings, maintaining the property, and negotiating with potential buyers.
- Sale Proceeds Distribution: The decree may state a specific percentage split or provide other directives (e.g., paying off certain debts before splitting proceeds).
3. Determine the Appropriate Sale Price and Strategy
Selling a house post-divorce can be emotionally charged. If you and your former spouse can collaborate—or at least maintain open communication—on a few strategic steps, it can help streamline the sale process:
- Obtain a Professional Appraisal: A neutral, third-party appraisal can set a baseline for a fair listing price.
- Engage a Real Estate Agent: Consider hiring an experienced local realtor who understands divorce-related sales. A reliable agent can handle showings, negotiations, and the final transaction to reduce stress and potential conflict.
- Agree on a Pricing and Marketing Plan: Decide on marketing strategies and a timeline for reevaluating the listing price if there are no offers.
4. Address Mortgage and Financial Obligations
If there is an existing mortgage, you’ll need to determine how monthly payments are handled until the home sells. This may be outlined in your divorce decree. If not, it’s best to establish a clear, written agreement with your ex-spouse to avoid missed payments or credit damage.
Things to consider:
- Who Makes the Mortgage Payments? While waiting for the sale, you must ensure the mortgage is current. Often, both spouses continue contributing based on their financial means.
- Utility and Maintenance Costs: Costs such as utilities, HOA dues, and routine maintenance should also be spelled out. Quick resolution of these issues helps preserve the home’s marketability.
- Refinancing (If One Spouse Keeps the Home): If the decree states that one spouse will retain the home and buy out the other, refinancing is typically required. This releases the spouse who is no longer an owner from the financial obligation. If you plan to sell later, formalizing these steps helps prevent future complications.
5. Consider Tax Implications
Consult with a tax professional if you’re worried about potential capital gains taxes or how selling the home might affect your overall tax picture. In many cases, the IRS provides exclusions for capital gains when selling a primary residence, but eligibility may change depending on how long you lived in the home and whether the divorce decree altered ownership.
6. Ensure Clear Title Transfer and Post-Sale Logistics
As you move closer to closing the sale, be sure you have the required documentation. In Texas, this typically involves:
- Deed Transfer: Make sure the deed is properly transferred if one spouse’s name needs to be removed before listing or after finalizing the sale.
- Lien Releases: Confirm any liens or judgments against the property (including possible liens from divorce-related debts) are satisfied or accounted for.
- Closing Proceeds: Outline how the title company should distribute proceeds from the sale. Provide them with a copy of the final divorce decree if it specifies the division percentage or any offsets for debts or reimbursements.
7. Plan for the Future
Selling the marital home is one chapter in the larger story of your post-divorce life. Deciding what to do next—whether purchasing another home, renting while you rebuild finances, or relocating—should reflect your new goals and budget. Seeking guidance from professionals, including financial advisors and family law attorneys, can help you make informed decisions and safeguard your long-term interests.
8. Work with Experienced Texas Divorce Attorneys
Successfully navigating the sale of a marital home after divorce often requires clear legal direction. A seasoned Texas family law attorney can review your situation, interpret the divorce decree, and advise you on compliance with court orders as well as the most strategic path to sell the property. If disputes arise over the sale price, timing, or profit allocation, you’ll want an advocate who knows Texas divorce law and can represent your interests effectively.
Questions? Coker, Robb & Cannon, Family Lawyers Can Help.
Selling the marital home in Texas can be both emotionally and legally complex. By understanding community property rules, clarifying your responsibilities in the divorce decree, setting a fair sale price, and consulting experienced professionals, you can help ensure a smoother transition.
If you’re considering divorce, in the midst of one, or finalizing post-divorce arrangements and need clarity on how to handle your home or other assets, Coker, Robb & Cannon, Family Lawyers can help. Comprised of three Texas Board of Legal Specialization Board Certified Family Law Specialists (Duane L. Coker, Kelly K. E. Robb, and Jacqueline Cannon) and backed by decades of collective experience, we know how to help clients protect their rights and interests in matters of property division during and after divorce.
To speak with a member of our team, call (940) 293-2313 or contact us online. We serve clients across Collin County, Denton County, and beyond.