Ways To Sell Your House During a Divorce in Pennsylvania
Divorces are tough, not just emotionally, but financially. It’s one of my least favorite real estate topics, but divorce has its claws in here, too. During a divorce, soon-to-be ex-spouses may want to sell their house quickly, but that’s not how the situation works.
Selling your house during a divorce in the Pennsylvania market adds more pressure. And deciding what to do with the family home is a significant financial obstacle in a Pennsylvania divorce.
Pennsylvania’s Equitable Distribution Law
Divorces in Pennsylvania are based on the law of “equitable distribution”. To dumb it down for me, our attorney explained it as “unlike the states that allow for a 50/50 split, Pennsylvania’s legal system focuses on fairness.”
I was amazed when I first heard about this. I had questions about how fair it would be and if one spouse would get more than the other. So I found out that during a Pennsylvania divorce, the courts may consider factors like:
- The length of the marriage.
- The age and income of both spouses.
- The standard of living established during the marriage.
- Which spouse will have the custody of the minor children?
Selling a house during a divorce in PA is an easy way to liquidate the asset so that the proceeds can be divided according to the court’s ruling. Our real estate attorney advises, “During a divorce, couples should work alongside attorneys to sell the house as they would in a normal scenario. Since the percentage of the asset is divided by the court, fairness will be implied.”
Ways To Sell a House During a Pennsylvania Divorce
Not that it gets any easier, but according to Jon, “don’t make it any messier.” In PA, couples have four options for dealing with marital real estate.
Immediate Sale or As-Is
An immediate sale is the most common approach to selling a house during a divorce in Pennsylvania. One of my friends went with the option of an immediate sale during her divorce. She explained that she and her husband agreed to list the home with an agreed-upon real estate agent, sell it, and split the proceeds.
“The hard part was agreeing on the price and the agent. Since the divorce causes massive insecurity between couples, agreeing upon anything is complex.”
Cash Sale
Selling to a cash home-buying company during a PA divorce is also viable. The company will check for judgments against either spouse and deduct the tax liens or unpaid debt from the proceeds of the sale. Both spouses must also sign the seller’s disclosure statement. Even in a cash sale during a divorce, hiding defects could lead to a lawsuit.
One Spouse Buys Out the Other
If one spouse wishes to retain the house, they can buy out the other’s share. This would entail:
- An appraisal to get the current market value.
- Refinancing the mortgage paperwork.
- Paying the spouse being bought out of the house their share of the equity.
This is easier if the split is amicable. If both spouses are out to get each other, then buying the other one out is not an option. Pennsylvania real estate professionals are always on guard when one spouse is buying the other out of the house during a divorce.
Co-ownership
In a deferred sale (co-ownership), the parties decide to keep the house and sell it at a later date. This could happen if the market isn’t right for a sale or parents want to minimize disruption for their children while they are in school.
Another colleague chose a deferred sale during his PA divorce because the housing market wasn’t favorable.
Partition Action
In simple terms, this is when both parties can’t agree.
If one spouse refuses to sell and a buyout isn’t possible, Pennsylvania has a law called a partition action. Under this law, a co-owner can sue to force the sale of the house. As you may have realized, this is expensive and time-consuming.
Guide To Selling Your House During a Pennsylvania Divorce
Although I do not endorse emotional turmoil of any kind, being aware of how to sell your house during a divorce is the better choice for both parties.
As Jon says, it’s better to be “smarter than sorry.”
- Consult your attorney religiously.
- Undertake a separate appraisal.
- Prepare the asset for sale.
- Establish a respectful communication protocol.
- Escrow the proceeds
Moving Forward
Navigating how to sell your PA home during a divorce can quickly get nasty and hateful. You’re already fighting one battle; you don’t want another. Divorce is a massive life transition, but with the right approach, your home sale can lay the foundation for a new life.
