Selling A House During Divorce in Tennessee Guide
Many married couples in Tennessee buy a house together, and that home becomes one of the marital assets that must be settled in the event of a divorce. While divorce is often a complicated process that can cause stress for both parties for months, the decision to sell a house adds to the complexity and may delay the finalization of the divorce. This aspect of your divorce can have long-term effects on your finances, where you live, and other important factors. You understandably may have many questions before you sell shared properties in Tennessee, and we have prepared a thorough guide to help you understand the sales process while divorcing in Tennessee.
Table Of Contents
- How Do You Sell Your Home During a Divorce Work in Tennessee?
- Who Gets the House in a Divorce in Tennessee?
- Should I Sell Before or After Finalizing the Divorce?
- Who Gets to Stay in the House During Divorce in Tennessee?
- Alternatives to Selling During Divorce in Tennessee
- Divorce House Sale in Tennessee: Frequently Asked Questions
- Easiest Way to Sell a House During a Divorce in Tennessee?
- Selling a House During Divorce in Tennessee to a Cash Home Buyer
How Do You Sell Your Home During a Divorce Work in Tennessee?
Tennessee is an equitable property state. Unlike in a 50-50 state, each divorcing spouse receives a portion of the assets, but the marital property may not necessarily be divided evenly. Given the many factors that could impact the settlement of the divorce and the ruling of the court about changing ownership, it is important to seek legal advice from an experienced lawyer who can make a difference in the case. Your attorney can help you to negotiate equitable terms and can answer your questions about the division of assets. After you decide that you want to sell your real estate, you can then decide if you should sell the property through a real estate agent or to a cash investor.
Step 1. Find a Divorce Attorney in Tennessee
When you are facing divorce, you may want to go through the proceedings with as little cost and stress as possible. You may be thinking about walking through the process without an attorney, and you do not need to have an attorney to file for divorce in Tennessee. However, a divorce involving significant marital assets, such as a house, can be more complicated. Divorce lawyers generally have extensive legal expertise that can benefit you throughout the proceedings, and they can handle tough negotiations. Keep in mind that you and your ex each need a divorce attorney to prevent a conflict of interest.
Step 2: Determine Who Owns the Real Estate
Before you and your ex decide what to do with the Tennessee house, you need to research its ownership. For a home that was purchased before marriage, the original buyer is the owner. If the house was purchased after the marriage date using inherited or gifted assets, the person whose assets were used is the owner. In some cases, the home may be partially a separate asset and partially a marital asset. This can be a complicated aspect of the law. If the couple cannot come to an agreement in this area, the judge will set the requirement. In the event that the proceeds from the sale are divided between the two individuals, the split will be based on their individual percentage of ownership.
Step 3: Decide How You Want to Sell the Property
There are three primary methods to sell a home Tennessee during a divorce. Hiring a real estate agent may initially come to mind for both parties. Both will need to decide which Realtor to engage for their services. If an agreement cannot be reached through negotiations, the matter is decided by the court.
Another option is to sell to a cash buyer. A cash buyer will purchase the Tennessee home as-is, so no agreements need to be made between the parties related to repairs, staging, paying for fees, and more. Often, this can be a less costly option that can produce faster results. However, the divorcing couple must decide which cash buyer to sell to.
The last possibility is to sell the home yourselves as an FSBO. This helps you to avoid some Realtor commissions, but it may take longer to find a seller and transfer the title. In addition, you may need to work more closely with your ex for a longer period of time than you otherwise would need to.
Step 4: Sell the Tennessee House
Selling a house could take many long weeks or months if you sell the property on your own or you work with a real estate agent. If you work with a cash buyer, you won’t need to wait for a buyer to line up a mortgage or deal with specific issues related to an appraisal or a property inspection. You could potentially receive a higher offer when you sell through a real estate agent, but there are costly fees to consider as well as delays. In addition, if you sell the house as an FBSO or through an agent, the house must be made available for showings and open houses. You may also need to pay for the house to be updated before listing it on the open market.
Step 5: Divide the Proceeds from the Sale
Once the Tennessee house sales process is finalized, the proceeds will first need to be applied to several expenses and fees before any remaining assets can be divided. These expenses include unpaid property taxes, the remaining balance on the mortgage and home equity loans, closing costs, and agent’s fees. Because Tennessee is an equitable property state rather than a 50-50 state, the remaining cash proceeds after paying costly expenses will be divided based on their ownership percentage.
Who Gets the House in a Divorce in Tennessee?
Determining who gets the home after a divorce depends on a few specific factors, even in an uncontested divorce. Many couples believe that a home purchased by one person before getting married is considered to be separate property. While this is the case in many situations, it is not always the case.
When a Spouse Purchased the Real Estate Before Marriage
While one spouse may have bought the Tennessee house before marriage, the monthly payments to the lender may have been made with joint income from both individuals. If this is the case, the spouse who’s on the title is typically not ordered by the court to relinquish the home. However, the judge may rule that he or she must fairly compensate the other spouse for the money he or she contributed to paying the home lender.
Only One Spouse Wants to Sell a Jointly-Owned Home
In some situations, the home may have been purchased after the marriage, but only one of the people may want to sell it. For example, the other individual may want to reside in the home after getting a divorce. The spouse who isn’t interested in finding a buyer must refinance the home loan so that only he or she is on the deed. That person must also provide the other spouse with his or her equitable share of the home’s equity based on its current value.
Neither Spouse Wants to Sell the Home
In this case, the court will decide who gets to retain ownership of the property or if it needs to be sold. All relevant factors will be taken into account by the judge to make a fair decision. To make the decision, the judge will review all marital debts and assets so that there is an equitable distribution.
Both Spouses Want to Sell the Home
This may be the easiest scenario to walk through. In this case, the proceeds from the sale will pay off the loan and other outstanding marital debts. The remaining proceeds will be split equitably.
Should I Sell Before or After Finalizing the Divorce?
Before the final divorce decree is signed, the couple must decide when to sell the Tennessee house. While it’s possible to sell either before or after the divorce is finalized, there are important matters to consider for both scenarios.
Sell Before Finalizing the Divorce
Generally, it may be best to have your attorney prepare an agreement related to the terms of the sale. This could include which real estate agent to use to find interested buyers or which cash buyer to work with. It also may outline the repairs that will be made to the house before you sell it and the sales price that the couple agrees to. By making this agreement as detailed as possible, the couple may avoid some potential issues during the sales process.
Sell the House After Finalizing the Divorce
If your divorce case goes to trial, the judge may order that the house be sold before signing the decree unless it is considered to be separate or personal property. The proceeds from the sale will then be divided equitably. However, some couples agree that one of the parties will keep the house, and it’s then up to that sole owner to device to sell the house after the divorce or to continue living in it.
Other Factors That Play a Role in This Decision
Several other factors could play a role in this decision and should be taken into consideration. For example, can both parties feasibly wait until after the divorce? Do either or both of the spouses need the proceeds to buy or rent another house soon? In addition, the portion that each spouse contributes to the loan payments could affect the decision about when to sell.
Who Gets to Stay in the House During Divorce in Tennessee?
In Tennessee, both parties could continue living in the house until the divorce decree is signed, or one party may do so. When considering if this is a feasible option to pursue, you must review your budget to determine if you can make the loan payments on your own. The spouse who will have temporary child custody until the divorce settlement is signed may choose to use the house to avoid disruption and unnecessary stress to the children. The property’s condition, the expectation of an increase or decrease in property value, and other factors may be taken into account as well.
Alternatives to Selling During Divorce in Tennessee
Selling a Tennessee house is a common step in a divorce settlement, but it isn’t the only option. What are the alternatives to consider before you sell the marital house?
Co-Own the Property
If you and your ex communicate well, the option of co-owning the house after the divorce could be considered. The meaning of co-ownership is that both parties continue to own the house, and they continue to split related expenses. This includes repairs, insurance, taxes, and monthly payments. Co-ownership could be the only realistic option if the mortgage is higher than the home’s value or if a buyer cannot be located. A property may continue to be co-owned for months or years.
Buy Out the Other Spouse
If you have sufficient funds to do so, you could buy out your spouse. By doing so, you’d be the sole property owner. Keep in mind that these funds could come from refinancing the loan. If you have children, buying out the other spouse could allow the kids to remain in the house and stay in their current school.
Divide the Marital Assets
Through the divorce settlement, each party will receive his or her equitable share of the assets after the debts have been paid. However, this doesn’t necessarily mean that the house needs to be sold. The total net assets should be considered. By doing so, it may be possible for one spouse to own the house after the divorce while the other spouse gets a larger allocation of cash, stocks, and other assets.
Divorce House Sale in Tennessee: Frequently Asked Questions
Many individuals who are in the middle of a divorce in Tennessee have similar questions. A closer look at common questions could help you more confidently decide how to proceed.
Can I sell the house before the divorce is final?
Selling the house before a divorce is possible, and it may be the best option in many cases. Doing so enables all of the marital assets and debts to be more easily divided, and this is especially true in a contested divorce. However, there may be reasons to decide not to sell the house, such as for continuity with the kids or other reasons.
Is Tennessee a 50-50 divorce state?
Tennessee is an equitable distribution state rather than a 50-50 state. This means that several factors will be reviewed to determine how the house’s equity is split or who gets ownership after the divorce. These things include when the house was purchased, where the purchase funds came from, and how much each spouse contributed toward the mortgage payments.
How does capital gains tax work in a divorce?
If the house is sold before the divorce settlement is finalized, the spousal pair can avoid paying capital gains tax on taxable proceeds from the sale. However, if the house is co-owned or one spouse buys out the other, capital gains tax will apply to the owner or owners at the time it’s sold in the future.
Can I force my ex to sell the house after the divorce?
In an uncontested divorce, the spousal pair will agree on all important matters, including the sale of the house. However, if selling the house is contested and the attorneys cannot negotiate a reasonable solution, the matter will be decided by the judge. The court’s ruling is final, even if it is not a desired outcome for either party.
How do I sell my Tennessee house if one partner refuses?
In some divorce cases, only one partner wants to be a seller. In this situation, the person who wants to retain ownership has the option to buy the other party out. However, if this isn’t a realistic option for your case, the judge can make a ruling on the matter.
Easiest Way to Sell a House During a Divorce in Tennessee?
The fastest and easiest way to sell a marital house while getting a divorce in Tennessee is to work with a cash buyer. Dignity Properties buys houses, mobile homes, and other residential real estate throughout the state. Our business pays cash for homes in their current state, so there isn’t a need to wait for a buyer to get a mortgage, order an appraisal, and more. Contact our courteous team today to learn more and to get a cash offer from us.
Selling a House During Divorce in Tennessee to a Cash Home Buyer
At Dignity Properties, we have worked with sellers throughout the state in a variety of situations. Whether you are facing a foreclosure, going through a divorce, or dealing with another issue, we can help. By getting an offer from us, you can benefit from a hassle-free, expedited process. No repairs are needed, so we’ll make an as-is offer. You don’t even need to remove unwanted articles and belongings from the house. We serve the entire state, including areas like Nashville, Memphis, Chattanooga, Knoxville, Clarksville, Murfreesboro, Franklin, and others. Before you book an appointment with a real estate sales agent in Tennessee, contact us for more information about selling to a cash buyer.