Homeownership can be complicated, but we also think it’s one of the most rewarding ventures out there. In our series Ask an Edina Realty Lawyer, we are hoping to demystify some of the trickier aspects of buying, selling and owning a home.
In this edition, one of our lawyers discusses the affect a divorce might have on home buying or selling.
Dear Edina Realty Legal,
My spouse and I have made the difficult decision to divorce, but we own a home together that we’ll need to sell. Additionally, I’d like to buy a new home. How does our divorce affect this?
I am sorry to hear about your divorce. This is often a very difficult time for all involved, and you’re right to be thinking about how a divorce can affect your home buying and selling plans.
The key issue to consider at this point is that in Minnesota (and many other states), spouses automatically share an interest in real estate owned by their spouse. This is true regardless of whether the legal title to the property is held by only one spouse. Also, a spousal interest exists even if there is a prenuptial agreement that says the spouse is not entitled to ownership of the property. A prenuptial agreement is only a tool to direct the court on how to distribute property if there is a divorce, which means the spousal interest still exists until the court has made a determination.
If you are selling a home
- If your divorce is not yet final, you and your spouse both own an interest in the property. This means that both of you must sign the purchase agreement and closing paperwork.
- If your divorce is final, which means that a judge has signed a divorce decree, your circumstances are dependent on what the court has ordered. A judge may
- Give ownership of the property to both spouses
- Award ownership to only one (possibly giving the other a right to a share of the proceeds from a sale)
- Order that the property be sold
- If the judge awards the property to one person, they are the only person who needs to be involved in the sale. Otherwise, if both spouses continue to own the property, both will need to sign the sale documents
- If the plan is to sell the marital home, divorcing couples might want to consider asking for sole ownership by one spouse in the divorce decree to avoid ongoing disagreements or issues surrounding the sale of the property
If you are buying a home
- As with selling your home, the timing of divorce proceedings may affect buying a home. If you purchase and close on a home sale before you are divorced, your former spouse may have an interest in the property because you acquired it while you were married.
- Even writing a purchase agreement before divorcing requires caution. By writing a purchase agreement, you may acquire an equitable interest in the property, and that means your spouse may acquire a share of that interest.
- You can make sure that your spouse retains no interest in the new property by addressing it in your divorce decree. If you are thinking about purchasing a property with a pending divorce, be sure to consult with your divorce attorney.
A professional REALTOR® can provide valuable assistance in navigating real estate transactions during this difficult time. Reach out to our customer care team to be matched with a local specialist who can help you through the process.
Follow #BuyerInsights and #SellerInsights on Facebook, Twitter, Instagram and YouTube for even more tips on selling a home in Minnesota and western Wisconsin.
The Edina Realty Legal Department serves as in-house counsel for Edina Realty and does not represent private clients. This Insight is not intended to provide legal advice.
