Vorce ranks divorce as life’s second most stressful event, with heated disputes in families of what to do with their real estate as couples are parting ways. In this post, we hope to give you insight and clarity about your options for selling your property in Minneapolis St Paul because of divorce.
Beyond the emotional ties that connect us to a home, shared real estate within a marriage comes with an intricate maze of legal strings and hoops to jump through that has to be figured out. It’s a bit more complicated than, say, just going your ways when you divorce each other.
However, with over 780,000 divorces recorded annually in the United States as of 2019, you’re not the first to face the tricky divorce real estate questions keeping you up at night.
Let’s go through each one and tackling your concerns with the experts in real estate at Minnesota Cash Home Buyers, drawing on their more than 30 years experience.
Top 15 divorce Real Estate Questions in Minneapolis St Paul Minnesota
1. Are you in a community property or equitable distribution state?
According to Divorce Net by Nolo, noted as a leading website for legal matters, “the courts will divide your assets under one of two basic schemes: community property or equitable distribution.”
Community property (a minority of states here in the USA):
If you live in a community property state—Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, Wisconsin, and Alaska* and you are going through a divorce with a house, it is classified as community property. And the house was acquired during the marriage, the proceeds from the sale are split strictly and equally 50-50.
As a single coming into the marriage, if one spouse purchased the house before the union, that house is considered separate and will not need to be split between the two parties.
Divorce proceedings are governed by local state law as opposed to federal law; there are exceptions to these rules. MaritalLaws.com, an online place to find information on divorce, child custody, child support, visitation, real estate property division, and alimony laws, provides the divorce laws of each state with a comfortable, interactive state map and all the fine print in one place.
Great place to do some more research. *Note: Divorcing couples that reside in the state of Alaska can opt-in to a community property system or default to an equitable distribution system.
Equitable distribution (the majority of states) including Minnesota :
If you live in Minnesota under law, the house in Minneapolis St Paul that was purchased during the marriage will be divided equitably based on factors deemed by the county courts.
According to LegalZoom, a leading internet provider of legal advice, solutions, and contracts, such factors include:
- How much each spouse makes in gross income each year
- The amount each spouse has the opportunity to make each year
- A dollar amount value is given for a spouse that is staying home or raising the kids.
James L. Powers, an attorney from Chicago with over 30 years of experience working in divorce courts and representing between 30 to 40 clients each year states. “While there are small differences between community property and equitable distribution, the laws of community property and equitable distribution remain about the end of the day.”
2. Should you keep or sell the Minneapolis St Paul house?
Ideally, If everything goes well, you and your spouse can decide what is best for everyone.
However, when emotions are running high, and it’s challenging to have a basic conversation or reach an agreement on what you should do with the house. Take heart that there are laws in Minnesota that can force a particular outcome.
You may want to keep your Minneapolis St Paul house if:
- You have children and don’t want to add to their emotional distress when moving; the breakup in the family may be all you want them to handle at this point.
- You have strong emotional ties that are connected to memories associated with the home.
You may want to sell your home if:
- You can’t afford the payments and home upkeep. Going threw divorce may require two places to stay, and the mortgage and maintenance on the original family house maybe too much for one person to afford.
- It’s too emotionally painful to live there after the divorce.
When couples go through a divorce, emotional pain is often relieved as they see the house with so much stress related to it that it’s often better to move on.
Know going into selling your families home is part emotional and part financial, don’t try to separate them. Sometimes at the moment, our wants aren’t financially feasible—especially when it comes to selling your house—which is why cooperation between the spouses goes a long way in this situation.
Fran Williams, from Lakeland, Florida, with 19 years of experience, is one of the best real estate agents in the area that works with divorcing clients. Fran tells people that a divorcing couple should reach out to a local real estate agent or professional home buyer after they’ve consulted an attorney and before they decide to sell the house. In doing so, you will understand the steps and obstacles that may be coming your way.
We here at Minnesota Cash Home Buyers have helped many people going threw difficult situations. Being a local company that is both a licensed Minnesota real estate agent and professional home buyer, we can provide creative solutions to complex real estate issues revolving around divorce.
If you’re still in the split-up argument stages, you may find it a bit of a challenge to get an agent to work with you. But that is where we shine.
“If you’ve got a belligerent situation, and one party says they’re not going to sell the Minneapolis St Paul property, no matter what—that they’re going to sabotage this process—then don’t even try to list the house for sale or try to sell it outright to someone else. In Minnesota , it takes one person in the marriage to buy a house, but both have to agree and sign the paperwork to sell. On the other hand, “If it’s Minnesota court-ordered sale, that’s a different situation. They have to cooperate with the selling.”
3. Should you buy out your spouse’s half of the family home?
While purchasing your other spouses part of the family house so that you own 100% of it makes sense for some, here are several reasons:
- You have children and want to maintain the family’s stability, including being around their friends or schools that are familiar.
- The house is in an ideal location and close to your family, work, things to do, and friends.
- The local market conditions are more of a buyers market and aren’t right now to sell
- You bought the house in the last couple of years and haven’t had much time to build up equity.
Real estate attorneys say it’s usually the case that one or both spouses want to keep the house, but the real question is whether one can afford to do so on their own.
Typically the spouses have qualified for their mortgage amount when the bank considered both or their incomes, and only one or neither may be eligible to take over the mortgage independently. In that scenario, the person who gets to keep the home is the one who can come up with the money to buy the other out. Some spouses have done this threw getting a second mortgage on the house or refinanced it.
That can be a challenge for some couples splitting up during a divorce when all of your assets, savings, checking accounts, and retirement is involved.
4. Will my divorce settle or go to trial?
Lawyers.com, an online legal website from Martindale-Hubbell, reports that “more than 90% of divorce cases settle before trial—either by then coming to a mutual agreement, one spouse offering an acceptable settlement or at mediation.”
If you and your spouse can reach a mutual agreement on how to divide your assets, you are ahead of most. You can negotiate a settlement agreement between the two of you without the assistance of an attorney that will save you money, and some say it is much better for all involved. This mutual agreement in Minnesota is known as an uncontested divorce.
However, while Powers says that couples can choose this route, it’s not necessarily in their best individual interest.
“As it relates to drafting a marital property settlement agreement, you should hire a local attorney because you will be dealing with issues or finances that people don’t know about,” says Powers.
Since the attorney your hire can only legally represent one of the spouses in a divorce case, due to a conflict of interest, the benefit of both parties cooperating and coming to an agreement is enormous. If you can not agree quickly on what to do with your house, the cost of the attorney may skyrocket.
“When you’ve heard people say ‘We are working together with an attorney,’ it’s most likely people who’ve reached a settlement on their own. One or both of them have hired the attorney who then represents them to draft up the paperwork.” Powers explains.
If you and your spouse can’t agree on who gets to keep the house, when you both want it, an experienced attorney will advise you as to what Minnesota state’s law says about it.
5. What happens to the house mortgage after your divorce?
After a divorce has happened, one of two things typically happens to the mortgage on the joint property. 1. you can sell the house to pay off the mortgage, and each spouse collects their share of the net proceeds after the payoff. 2. One spouse takes over full ownership of the real estate by refinancing the mortgage under their own name.
Needless to say, the spouse assuming ownership of the house will need the necessary income and quality credit score to qualify for the new house loan.
The process gets more complicated when a divorcing couple is underwater on their property, which means that they owe more on-the-house mortgages than they’re currently worth, or if they’re facing financial hardship.
“For example: Maybe the husband quit making payments of the home mortgage, and they’re behind on their payments. An option for the couple to do is to move ahead with a short sale on their home,” says Williams.
Short sales happen when the bank agrees to let you sell your home for less than you owe on the mortgage instead of foreclosing on you. If the bank is willing to consider a short sale, it saves the couple from credit disaster because the forclosure will not show up on their credit report, and they can get out of the mortgage. Most of the time, there are some tax implications for making a short sale, consult your tax adviser before making a real estate short sale.
“In one case, we dealt with the lender personally, which the couple was very grateful for,” Williams adds. “We were the go-between. Because they were so far behind in the mortgage and because divorce often resulted in financial disaster, they had that option.”
6. What if your spouse refuses to sell the real estate?
It may be the case that you need to sell the home in a divorce, but your spouse won’t cooperate. During a divorce, people do all kinds of things that, at times, don’t make sense. They are driven by a feeling or hurt that complicated the whole process.
If your spouse can’t afford to buy you out, you’ll need to work with your divorce attorney to file a motion with a family law judge and compel the sale according to Minnesota law.
When you’re at odds with your spouse during a home sale, it’s critical to get an experienced Minneapolis St Paul real estate agent involved in managing the transaction and handling all communications. They can be an outside neutral party to help guide you through the whole process.
While you might be tempted to hire a friend or family member as your real estate agent, Powers advises against doing that during a divorce. Your ex-spouse may be resistant to working with a professional who they feel is on “your side,” and if you think about it for a moment, that it could be true. You should work together with a neutral third party who can act as a fair go-between as you put your house up for sale.
“When we were helping a lady, I asked her what was most helpful to her, and she said, ‘You took the burden completely away from me. You communicated with my husband clearly, so I didn’t have to, then would you communicated with me. I just did not want to talk to him.’ That’s what she needed at the time.”
7. How do you protect your real estate sale from the divorce?
One of the biggest pitfalls that divorcing couples allow at this point is letting personal disagreements to get in the way. Both people want a successful and profitable home sale, but their past hurts and concerns can spark a response to get the other person hurt, they hurt themselves when they want to sell their house.
“As I tell people, you’ve worked hard your whole life to get to the point you are at in paying down your mortgage,” says Powers. “Winning an argument or feeling that you got the better of someone on this particular issue when ultimately it just hurts you dollar-wise, doesn’t make any sense.”
But that is what happens in a divorce when real estate is involved.
Meaning, even when your emotions reach high levels, you need to treat selling your home like the business deal that it truly is and follow your local real estate agent’s advice when it comes to home preparations. That means your Minneapolis St Paul agent knows best what it is going to take to sell your real estate fastest and for the most amount of money. Their advice is going to include cleaning, repairs, decluttering, and staging your house. The alternative is getting fewer people interested in your property and getting an offer lower than your home’s real value if you did those things.
“I know finances are tight at that point, but you need to get the house clean at a minimum. If you’re trying to sell in a disaster-zone or run down area like North Minneapolis, you’re not going to get a top dollar,” Williams says.
8. Should someone be living in the house while you’re trying to sell it?
Whether one spouse or both spouses leave is a personal decision that can affect how selling your real estate could go. Research has shown that it can be more challenging to sell an empty house.
If both people move out of the home, it may be wise to hire a stager to come in with their furniture and prep it for sale. Often the amount that you would pay that stager is well worth the extra value the real estate brings with an offer.
Besides, it’s rarely possible that divorcing couples to make three housing payments every month, one for each place they are living and the third for the house they want to sell. So having one person remain in the home keeps your monthly housing expenses in check and additionally helps save without having to pay for the staging.
The person who stays in the house while it’s up for sale, should keep it in clean, marketable condition and be prepared to leave for showing appointments at a moment’s notice and the home inspection.
9. How can I keep my divorce private while my home is on the market?
Williams stresses that one of the best ways to keep your divorce private is to make sure the home looks tidy from the outside in and remains in generally sellable condition.
Properties that are in disrepair will send concerns to buyers that there’s trouble at home, which they may try to use as leverage in negotiations for a lower price.
Keep the home in top lived in shape, on the other hand, and buyers will see that the house has been taken care of and will bring a higher amount when they offer up a Purchase Agreement to buy it.
Just a regular home sale… nothing to see here, folks!
Make sure your curb appeal gets a refresh (99% of Minnesota Realtors recommend it)—so mow the lawn, trim the hedges, and touch-up chipped or peeling paint, and brush away debris and grime from the front entrance, even put a highlighted accent color on the front door to draw people.
On the inside, the home needs to stay clean, depersonalized, and decluttered throughout the home sale process. You want to be ready to show at any time day or night.
10. Do you have to disclose the divorce to buyers of your home?
You have no legal obligation to disclose your divorce to home buyers, and you should work with a mature professional real estate agent you trust to be discreet and safeguard confidential information as they should.
Again, keep any evidence of turmoil private and do whatever you can not to air your dirty laundry unintentionally. People pick up on things quickly, and if they know there is a divorce going on and want to sell your real estate, they will use it against you.
“I think the biggest issue is people making the sale of the home adversarial when it is separate and distinct,” Powers explains.
11. If your spouse owned the real estate before you married, are you entitled to any share of the proceeds?
Generally speaking, real estate acquired before the marriage, and that person name is solely on the deed “belongs totally to the spouse who owned the house. If they brought it with them into the marriage under Minnesota law, under the marriage you both need to sign the paperwork to sell the real estate—Other things to consider:
- The name of the other spouse was put onto the deed
- at the county before or after the marriage.
- The property has appreciated due to the other spouse’s marital efforts
in improving the real estate.
“It’s going to depend on your state law,” says Williams. “In Florida, we’re a homestead state. So whether you’re on the deed or not, it doesn’t matter. If you’re married, you live in the home, and it’s your homestead, then each party has a right to half.”
If you aren’t sure where your state stands, consult an experienced real estate attorney who will guide you through the options available in your state.
12. What if you have multiple houses or properties together? Often, a couple owns a primary residence and a cabin, vacation house, or rental properties.
Statistica, a leading provider of market and consumer data, reports that there are 3.47 million households with people who own a second home or more in the U.S. in 2018.
If, in addition to the personal family home, a couple that is married and together purchased an income-producing property like a rental house, duplex, or apartment building. And they use marital funds that aren’t being used as their primary residence; the county court only has the authority to order the couple to sell the home and split the proceeds.
Additionally, if only one spouse is on the title, then the non-title-holding spouse can seek monetary compensation through the courts but can’t request that the court transfer title to their name. But, contact someone to advise you on such a case as all can be a little different depending on your situation.
13. Should you involve your children in the decision about the house?
This conversation is totally up to you and the knowledge you have about your children’s age, whether they are enrolled in a nearby school, and the kind of relationship a divorcing couple has with them.
Considering that divorce is an emotional and stressful period in life, even in amicable separations, the question of whether to involve your children in the conversation about the house should be treated with care and sensitivity.
Williams encourages divorcing couples to consider their children’s emotions regarding the home as they tend to be torn throughout the home sale and worried about how the divorce will change or uproot their lives.
One strategy parents can use to address their kids’ sentimental attachment to the home is to include them in the process of choosing their next home, as opposed to separating or isolating them.
If there are disagreements between spouses, Powers emphasizes how important it is for parents to remember what’s in the best interest of their children first and to examine the unintended consequences of their behavior.
“People come into my office, and they sit across from me in the initial meeting and say, ‘I want, I want,’ as it relates to the kids,” says Powers. “And I look at them and say, ‘Okay, but you haven’t told me what’s best for your kid. Why don’t you start telling me what’s best for the kids, and then let’s get to what you want afterward?'”
14. What is a deferred house sale, and should you consider it on behalf of your children?
A deferred sale in Minnesota is an arrangement, either agreed upon between the spouses or ordered by a court, to not sell the family home, at least for the time being.
Deferring the sale of the property may make sense if you’re waiting for the Minneapolis St Paul real estate market to improve or if your child is still under 18 years old and don’t want to uproot them from their school.
Keep in mind that “if you do agree to defer the sale, you’d also have to reach an agreement regarding who’s going to pay the house’s mortgage, property taxes, insurance, ongoing maintenance, and repairs until the house sells.” According to HomeGuides by SFGate, the established home section of the sister-site of the San Francisco Chronicle.
15. Which professionals do you need to hire to get through this whole real estate divorce process?
Though it will vary depending on your situation, here are the Minnesota professionals you may need to hire while you are going through a divorce and a breakdown of their responsibilities.
1. An experienced local real estate agent, broker to sell your home
- Handles home preparations getting it ready to sell, marketing, negotiations with buyers, and closing paperwork at title company related to the home sale
- . A professional real estate agent will help protect the home sale’s success from disagreements in divorce
- within the couple. They also serve as a neutral third party between divorcing spouses
- and keeps sensitive information confidential.
2. A professional divorce attorney to represent your legal interests
- Prepares final paperwork and appears in court
- Legally represents one party in a divorce case and works in their best interest at all costs
- Educates clients on the division of marital property and the different scenarios that could complicate or implicate a divorce case based on Minnesota state law
- Examines all financial records and calculates how to divide everything
- Fixes bad agreements from mediators or other attorneys, keeps a watch out for their client
- Discourages clients from behaving out of spite (i.e. suing a spouse) if it’s not in their best financial interest
3. A mediator to counsel you through tough decisions
- Instead of a real estate attorney, a mediator helps you and your divorcing spouse reach an amicable agreement more cost-effectively
- Works with you through the issues of property distribution, child care, retirement funds, taxes, kids visitation, and more
- Considered a kind of marriage counselor and life coach
Real estate and divorce: Where business meets emotion
Divorce is never a situation anyone expects to be in or wants to go through. Regardless of the reason, it can be a scary and emotional roller coaster at times —with many unknowns.
“There’s an old saying that in criminal law you represent the worst people who are at their best, and in divorce, you represent the best people who are at their worst,” Powers explains.
Making decisions over the family home adds complexity to an already stressful process. Still, the key takeaway is that whatever path you choose, let it be for your long-term financial interests, rather than a heat-of-moment win.
Let Us At Minnesota Cash Home Buyers Sell or Buy Your House From You
We at Minnesota Cash Home Buyers are experienced real estate agents and professional cash home buyers. Our passion and skills in the field of real estate have helped many Minneapolis St Paul Minnesota clients navigate the best solutions when having to deal with real estate in the face of a couple going through a divorce. Give us a call, and we would love to tell you the different ways we can help you get rid of your house with the least amount of stress and get what its worth. What do you have to lose, call us (612) 444-5088?