Selling your home due to separation or divorce

Being in relationship can be like a warm ray of sunshine in life, keeping us comfortable and happy. But sadly, sometimes, the sun has to set and the relationship does not last. Whilst incomes may have been combined to buy a property together, unpicking that financial agreement can be tricky during a separation. So how do you go about selling your home, should a separation or divorce end your relationship?

There is no rule or law that directly forces you to sell your property when separating, but circumstances can result in it being necessary. The decision as to whether you need to sell your house generally comes down to various aspects. Most important of all will be how friendly you and your ex-partner manage to remain whilst going through the process of divorce or separation.

The ways of dividing the property assets following a breakup are:

1. Sell the property and split the equity – Many couples simply cannot afford to remain in the property they previously shared before separating, especially when still actively paying the mortgage. One reason is that couples often tend to buy at the highest end of the housing market that they can afford. As such, it is common for couples to opt to sell the house and divide the profits. Sometimes this is an even split, but often it is not. More on that below.
2. Buying your ex-partner out – It may be that one of the two parties are able to remain in the property and buy out the other. This does always makes financial sense, as the remaining individual would then be solely responsible for paying the mortgage, all bills, living costs, etc. For those that go this route, the process is relatively simple and a solicitor will be able to process this house sale by exchange of contracts.
3. Not selling – Sometimes the property might be an investment that neither party wishes to let go of, for example a holiday home that both could continue to use, or a buy-to-let property. If both parties can agree usage and/or the division of profit amicable, this can be a simple route. Of course, do bare in mind that should the unexpected happen to one of the pair, the other would inherit the property outright and this may have knock on effects for any children involved.

Naturally, it can be much more complicated than shown above. Initial input of capital, the involvement of any dependants or whether one party is unable to work due to childcare or disability will all have a bearing of how the two parties involved feel the situation should be resolved. Sometimes an order of deferred sale is required, which is an order from the courts that a property remain in the couple’s joint names until a trigger event occurs, such as the youngest dependant turning 18.

It is possible to sell a property without the agreement of your ex. However, is highly likely that to do so you will require a court order.

Bringing the courts into the process is not necessary when going through divorce, if a couple is able to make a separation agreement and divide the assets in a manner that they feel is suitable. Whilst emotions can be running high, it’s worth remembering that the costs of a solicitor for each side is all going to come out of the value of the estate that you are trying to divide. The longer and harder you fight for your slice of the pie, the smaller the pie will be getting. Despite this, sometimes it takes a court’s decision to help a situation move through to a resolution.

Sadly, yes you can. Whilst this may seem contradictory to the above, it is not. If your former spouse wishes to take their profit from the estate value, you will need to be able to comply and provide them with fair compensation. Whilst there are some people out there that will have sufficient cash in the bank to fund such an agreement, for many the only way to fund this would be to sell their most major asset – the house. Because of this, two thirds of separations and divorces result in the former home being sold in order to raise the capital required to pay each party their share.

If a couple is arguing over who gets to remain in the property, a divorce court may order that the property be sold, in order to keep the outcome fair. Of course, as mentioned above, court orders for a deferred sale (also known as a Mesher order) are often brought into play if there are children involved. This will generally aid the parent that remains the main parental responsibility will remain in the property with the children until they become adults. If both parties feel they should be one to stay with the children in the home, this is again something that the divorce courts will rule on.

It is important to remember that regardless of who put the most money into a property, be it at the time of purchase or in terms of maintenance and bills, if both parties are on the mortgage as joint tenants (which is where the home is owned equally as an asset, with no share agreement), or as tenants in common (where the ownership of the house can be divided up in terms of shares, agreed at the time of arranging the mortgage) then an agreement with your ex will be needed before any actions can be take, with very few exceptions.

How do you sell your house when divorced?

When couples do separate, the majority are satisfied with selling the home once the legal side of the divorce is satisfied, leaving them free of the stresses of the process. This helps to avoid any rash decisions.

Of course, for some couples they simple want or need to get away from each other as quickly as possible, and the house sale may reflect that, with slightly lowered property values or low offers accepted.

Whenever they choose to sell, there are several options available:

1. High street estate agents – The most traditional of routes to sell a property is the estate agent. Once all legal proceedings have been resolved, they will be happy to list your property for a fee of between 0.75% and 3%, plus VAT, typically.
2. Online estate agents – In recent years new offerings have come from the likes of Purple Bricks. Online estate agents have lower overheads and therefore offer similar services as traditional brick and mortar estate agents in the high street, but with lower rates. offer the same services as a high street agent, albeit at generally a lower and fixed rate.
3. Sell it yourself – With sites like Facebook Markets allowing house listings, it is possible to try and market the property yourself in order to avoid fees altogether. With no fees and no obligations, this may prove suitable for the thriftiest of sellers, though it can result in a slower process and the intricacies of selling a property, such as ensuring certificates are carried out and are up to date, can cause headaches along the way.

For the fastest (but generally less profitable) sales, you can always consider resorting to either of the following options:

1. Auctions – Property auctions are a fast way to sell. You will need to set a reserve price to ensure that lack of interest does not result in your property being sold for a fraction of its market value, but you will pay a fee to the auction company, regardless of whether the house sells or not.
2. Home-buying companies specialise in quick cash purchases of properties and can complete the sale on a property is as little as 1 week. You can expect to get slightly less than market valuation, given that they are offering such a fast service. This does remove the uncertainty that an auction brings, and of course you are not obliged to accept the offer.

Dividing the profits from a sale after divorce

Whilst an amicable separation might mean that a former couple is able to simply agree a division of the estate that suits them both and walk away, for many it will require a court ruling.

Don’t assume that a judge will rule for a 50/50 split of the spoils, as you may find that your share is reduced if your ex is able to prove any of the following:

• You have been hiding money – If it can be proven that you were unfairly concealing income from your partner, whilst they shared theirs with you, this will be seen in an unfavourable light.
• Childcare responsibilities – If one parent has been unable to work for years, by mutual agreement, they may be entitled to remain in the property to continue raising the children, or to a larger split of the profits to ensure they can continue to do so
• Improvements - Your partner bore the responsibility for the majority of the property maintenance and changes to the home, such as renovations and expansions, which will have had an effect on the value of the property.
• They paid more each month – They may be able to prove that they bore responsibility for the majority of the bills and running costs, such as council tax and utilities.
• They paid all/most of the deposit – It might have been a good idea that you paid off your debts whilst they paid the deposit, but if they can prove that this was the case, they may be entitled to more from the property.

Unfortunately, it is not uncommon for many individuals to discover upon separation and divorce that they do not have a strong legal position or a recorded interest in a property. Imagine a couple who get together but one of the two has already purchases the property and is paying all the bills via direct debit, whilst the other buys all the food and clothes the children, and if earnings allow, spends on treats for the household. Upon separation, that person will realise they have little or no recorded interest in the property.

Whilst we would never recommend that a couple in a healthy relationship starts to think about what might happen in a divorce, we would certainly recommend that both parties’ future proof themselves in terms of the property and consider either a re-mortgage in both names, or provable direct debit payments for bills in both names, to help ensure that if the worst happens, neither party is left unfairly out of pocket during a time of already high enough stress and upset.