Title Tip: How to Navigate The Great Divide After Divorce

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By Lydia Blair
Special Contributor

Selling the marital home. Some refer to this as the great divide. Getting divorcing spouses to agree on selling their home, an asking price, an agent, the final sales price, etc. can be difficult and stressful at best. Emotions and tensions can run high well before we add on the legal requirements of transferring title of the property.

The unfortunate, but real, scenario of legally selling a home while divorcing can combine some difficult tasks. It requires cooperation from all parties. While everyone’s situation is different, there are basically two ways to divide the property before, during, or after a divorce.

One option is for one spouse to keep the property. With agreement, they obtain it from the other spouse and put it in their name only. Once the divorce is final, an attorney can draw up a special deed to be signed and filed with the courts. It must be signed by the spouse giving up the property. If the property has a mortgage, the spouse getting the property may need to go through the mortgage process again. Typically they will refinance the home in only their name. Sometimes they need to get equity out in order to buy out the other spouse. This is done in the refinancing process.

The other option is to sell the property. To sell a homesteaded property while married, both spouses must sign the warranty deed at closing. In Texas, a spouse has certain rights to the homestead property while they are married. It doesn’t matter if the property is separate or community property. What matters is if they have lived in the property as their homestead. Neither spouse may sell the homestead without the other spouse signing. This was adopted years ago to ensure that one spouse didn’t sell the family homestead without the knowledge of the other spouse.

I’ve seen divorcing partners who would rather burn the place down than see their soon-to-be-ex gain from the sale of the property. They sometimes don’t care if they financially hurt themselves in the process. Regardless of how high the monetary stakes may be, emotions often take over. It can become a dose of stress no one needs. 

Communicating the situation to the title company can help. While we’re not counselors or mediators, we may be able to ease the tension. I usually arrange for hostile parties to sign separately, even though it means taking twice as much time. It’s usually worth it to avoid the heated exchanges that can erupt.

The title company handling the sale will want to review the divorce decree or settlement agreement that has been issued by the court. They aren’t being nosy and don’t care about who got what – except when it comes to the property. How the property and proceeds are divided needs to be clear in advance of closing.

Typically, the divorcing couple splits the proceeds or shortages from selling the home – but not necessarily 50/50. Sometimes, one spouse has been occupying the home and is being paid back at closing for additional expenses. Any number of other situations may have been worked out to divide the proceeds. At closing, the title company will distribute any monies (after liens and loans have been paid) per the directions of the divorce decree, agreement between spouses or court order.

What documents must be signed, and when and how the property is transferred can be complicated. Your title company can help lessen the frustration and any confusion. Remember that the title company is a neutral party. Communicate your situation with them to tie up the division of real estate neatly.

The opinions expressed are of the individual author for informational purposes only and not for the purpose of providing legal advice. Contact an attorney to obtain advice for any particular issue or problem.

Lydia Blair (formerly Lydia Player) was a successful Realtor for 10 years before jumping to the title side of the business in 2015. Prior to selling real estate, she bought, remodeled and sold homes (before house flipping was an expression). She’s been through the real estate closing process countless times as either a buyer, a seller, a Realtor, and an Escrow Officer. As an Escrow Officer for Allegiance Title at Preston Center, she likes solving problems and cutting through red tape. The most fun part of her job is handing people keys or a check.

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