When a married couple splits up, the house is often one of the major assets that is divided between them. Selling a house during divorce in Virginia can be complicated and stressful for both parties involved. So, if you are going through a divorce and need to sell your home, it’s important to know how the process will work. Check out our in-depth guide to understand all available options making the process less stressful while navigating the sale of your house during divorce in Virginia.
- Virginia is an equitable distribution state meaning the proceeds from selling the house may not be split 50/50.
- The determination of marital versus separate property can conclude who gets the house in a divorce in Virginia.
- In Virginia, a court can force the sale of the house in divorce but typically allows spouses to come to an agreement first.
- Alternatives to selling the house during divorce include buying out your spouse, co-owning, or splitting assets of equivalent value.
Table of Contents
1. How Does Selling a House in Divorce Work in Virginia?
2. Who Gets the House in a Divorce in Virginia?
3. Should I Sell Before or After Divorce?
4. Can a Judge Force the Sale of the House in Divorce?
5. Who Gets to Stay in the House During Divorce?
6. Alternatives to Selling a House During Divorce in Virginia
How Does Selling a House in Divorce Work in Virginia?
Selling a house in divorce can be complicated but getting yourself a divorce lawyer is a good place to start. You then need to determine who owns the house (i.e. is it marital property, separate property, or a combination?). Next, it’s time to figure out if you want to sell the house with a realtor, investor, or by owner in Virginia and divide the proceeds from the sale.
Let’s explore the details of how selling a house during divorce works in Virginia…
Step 1: Find a Divorce Lawyer in Virginia
An attorney is not required in a divorce proceeding in Virginia. However, it is advisable to hire an attorney as the divorce process can be complex. Each party will need a separate attorney to avoid a conflict of interest.
Step 2: Determine who Owns the Home
Determining who owns the home during divorce is necessary before selling in Virginia as this could determine whether the home is sold at all or how to split the proceeds from the home sale. Virginia is one of more than forty states that divides property following a process called “equitable distribution,” which means the marital assets may not be split 50/50.
The Virginia Code section 20-107.3 defines marital property as all property acquired from the date of marriage to the date of separation (excluding inherited assets or gifts). This could include the family home (titled in the name of both spouses), income, debt, etc. If the home was purchased after the date of marriage or jointly titled, it is marital property. This means after selling the home, the proceeds will be split between spouses how the court deems most fair and equitable in Virginia.
Separate property includes all property acquired by either spouse before the marriage. It also includes property acquired during the marriage by inheritance or by a gift from someone other than the spouse. If the home was owned outright before the date of marriage, that party gets to decide what to do with the home whether it’s continuing to live there or selling it (no proceeds of the home sale have to go to the spouse).
Part Marital & Part Separate Property
This gets more complicated and may require a court to determine what assets fall into part marital and part separate. In terms of a home, if one spouse purchased the home before the date of marriage but used joint income to pay the mortgage, it is a part marital and part separate property (this is just one example).
The division of how much is marital and how much is separate depends on multiple factors such as down payment contributions, mortgage payments, source of funds for paying (separate vs. joint), and when the payments were made (pre-marital vs. marital). If you choose to sell the home, the percentage split by the court of part marital/part separate on the home will contribute to determining who gets how much of the home sale proceeds.
Step 3: Figure Out How You Want to Sell
Real Estate Agent
Both spouses can decide on a real estate agent to list the home. It’s typically a good idea to sign a settlement agreement that documents the realtor’s roles; however, this agreement is not required in Virginia. If both parties cannot come to an agreement, the clients’ attorneys may be able to agree on a realtor.
If the divorce does go to an equitable distribution trial, then the judge or a court appointed representative will choose an agent for the sale.
Local Cash Home Buyer
Working with a local cash home buyer in Virginia can save both spouses from having to agree on repairs/upgrades, paying for staging, paying realtor fees, etc. A cash buyer will purchase the home in as-is condition without open houses or repeated walkthroughs. It’s the most hassle free way of selling your home during divorce. The only thing both parties need to agree on is which cash buyer in the area to choose.
For Sale By Owner
Depending on the circumstances of the divorce, an FSBO home sale may be a good option if you want to avoid working with a realtor and have full control over the sale of your home. You don’t have to pay agent commission, but you may have less access to potential buyers. Working with your spouse to sell for sale by owner in Virginia requires coordination and agreement, which may not be easy during divorce.
Step 4: Sell the Home
Depending on which method you choose will dictate how quickly and hassle free your home sale goes in Virginia. A local cash home buyer will be the fastest guaranteed sale as there is no waiting for buyer financing or contract contingencies such as home inspections or appraisals.
Working with a realtor will require some coordination between spouses to determine repairs and a waiting period while waiting to find a retail buyer; however, this will typically garner a higher price for the house than working with an investor.
It’s up to both parties to determine if waiting for the home to sell while dealing with open houses, walk throughs, contract contingencies, buyer financing approval, and paying agent fees is worth the higher price.
Step 5: Divide the Proceeds from the Sale
A 50/50 split of the home sale proceeds should not be the assumed division since Virginia is an equitable distribution state. Keep in mind the fees and additional considerations to take into account after the sale:
2. : The remainder of your current mortgage needs paid off.
3. : If you choose to work with a realtor, you can expect to pay ~6% in agent fees in Virginia.
4. : Did you and your spouse take out a second mortgage on the home? This will need paid off with the proceeds of the home sale.
Who Gets the House in a Divorce in Virginia?
In short, the answer to who gets the house in a divorce is it depends. If one spouse purchased the home before being married, he/she might think it is separate property, and therefore get to keep it after the divorce is finalized. However, this isn’t necessarily true. There are a few situations which can determine who will get the house in a divorce in Virginia.
One Spouse Purchased the Home Before Marriage
If one spouse purchased the home before marriage but did not own it outright, the court will take into account whether the funds used to pay down the mortgage during marriage were sourced from joint income. Typically, the court will not force the spouse to give up the home, but the court might order him/her to pay the spouse a share of the property depending on how much money that spouse put towards paying off the home during marriage.
Both Spouses Own the Home, One Wants to Sell
When both spouses acquired the home during marriage but only one wants to sell, there are several steps involved in making sure the spouse who wants to sell gets paid. First, the couple will have to refinance the remaining mortgage on the house in order to remove the selling spouse’s name from any liability on the home. Also, the selling spouse’s portion of the equity typically needs refinanced since they are entitled to half the equity.
Both Spouses Own the Home, Neither Want to Sell
When both spouses acquired the home during marriage and neither want to sell, the court will have to make the decision (unless both spouses agree to co-owning the house). Since Virginia is an equitable distribution state, the court’s decision will be made based on what is fair for both spouses. This decision requires all other property to be taken into account to make sure all assets are equitably distributed.
The last scenario not mentioned above is when both spouses own the home and both want to sell. This is the most straightforward situation as a home sale will occur.
Should I Sell Before or After Divorce?
Selling before or after the divorce is finalized are both valid options in Virginia. If there is a chance one spouse will not want to sell the house, this should be discussed and decided upon before the divorce is finalized.
Selling Before the Divorce
Selling before the divorce is finalized requires coordination with your spouse to ensure you’re on the same page– it is highly recommended to have an agreement signed by both parties if this is the route you choose.
The agreement should govern selecting a realtor or investor as well as recommended repairs (if choosing a realtor) and an agreement on the sales price as well as adjustments to the price. The more detailed you can make this agreement the less headaches you will encounter during the home sale.
Selling After the Divorce
If you go to an equitable distribution divorce trial in Virginia, it will most likely end in selling the house (unless the home is found to be separate property). Commonly a judge will order sale of the property and divide the proceeds. If either spouse wants to keep the home, he/she should negotiate that arrangement with their spouse prior to trial.
Other Factors to Consider…
2. : Is either spouse looking to purchase another home right away or rent?
3. : Is one spouse paying the majority of the mortgage, or are both paying equal amounts prior to the home sale?
Can a Judge Force the Sale of the House in Divorce?
Yes, a judge can force you to sell your house in divorce, and there are two main reasons this could happen. The first is when one spouse is unable to buy out the other spouse’s interest in the property. The second reason is when spouses fail to agree on the home’s value, so the only fair way to divide the equity is to sell the home (if children are involved, you could do a deferred home sale, which means you agree to sell at a later date specified by the court).
How to Buy Your Spouse Out of the House When Lacking Liquidity
When there is not enough liquidity meaning neither spouse has enough assets or cash to buy out the other spouse’s interest, there are two options for tapping into the home’s equity.
1. Refinance: One spouse takes out a new mortgage that exceeds the amount of the current mortgage. The difference between the new mortgage and the existing mortgage is cash that could be used for the buy out.
2. HELOC: A home equity line of credit (HELOC) can be added to your existing mortgage, which enables you to access the equity in your home.
Who Gets to Stay in the House During Divorce?
Who gets to stay in the house during divorce depends on a few different factors… If the home is deemed marital property, both spouses have equal right to remain in the home until the divorce is finalized. Since Virginia is an equitable distribution state, a spouse’s contribution to the mortgage during marriage could give them an interest in the property, as could any work they did on the home. This means even if only one spouse’s name is on the title of the home, both could have interest in the property allowing both to have the right to stay in the home during divorce in Virginia.
Can Children Affect Who Gets to Stay in the House During Divorce?
If both spouses want to reside in the marital home without one another, they will have to come to an agreement on how to split their time in the home. However, if children are involved, the court can provide a temporary order stating the children should not leave the home and the parent who is most fit to care for them stays in the home with them.
A temporary order can also be given for extreme circumstances such as a pandemic (e.g. Covid-19). You cannot be forced out of your home during an epidemic, natural disaster, or other extreme conditions.
Alternatives to Selling During Divorce in Virginia
“Buy Out” the Other Spouse
A buy out occurs when one spouse pays half of the market value to the other to gain sole ownership. This requires sufficient funds, but the spouse who pays can remain in the property as sole owner. Funds could be acquired using a HELOC or by refinancing if the spouse cannot afford the buy out.
Buy outs make sense when there are children still going to school in the area or a spouse works nearby– instead of both spouses finding new homes, only one partner has to move. A buy out offers a simple split without forcing the entire family to move. A divorce can be hard enough on kids let alone moving to a new home and school district.
Co-Own the Home
If a house is underwater or can’t be sold due to poor market conditions, spouses can continue to co-own a house after divorce. In this scenario, the parties need to agree how payments will be split (mortgage, taxes, utilities, maintenance, insurance), who will make the payments, and how the property will be used.
One benefit of continued ownership is that the house can be sold at a later mutually agreed upon date, either when children are grown up or when market conditions are more favorable. The downside is that co-ownership requires cooperation between spouses and is only advisable if the divorce is amicable.
Divide the Assets
If neither spouse wants to sell the house, buy-out his/her partner, or co-own, a final option is allowing one spouse to keep the house and the other spouse to keep additional marital property with equivalent value. For example, one spouse keeps the home while the other spouse receives a combination of assets such as cash, retirement funds, stocks/bonds, and even vehicles.
This only works when there is a large amount of marital assets, so each spouse can select property that it makes the most sense to keep. The advantages of dividing the assets is one spouse gets to remain in the home and neither have to pay a lump sum of money or go through the home sale process.
Final Thoughts: Selling a House During Divorce in Virginia
Divorce is never easy, and selling your house during divorce in Virginia can be just as complicated. Not only do you need to consider the emotional toll it will take on you, but all of your assets are also up for consideration in divorce proceedings. With so many factors to consider and everyone’s personal situation varying, it’s important to understand the ins and outs of selling your house during divorce before making a final decision.
If you’re interested in bypassing the realtor process and want to see what a local cash home buyer can offer for your home, fill out our form below or give us a call. (571) 207-5171