When a married couple owns a house, dealing with the house is a very important aspect of the divorce. The first question is whether or not either spouse can afford to keep the house on his or her own. If not, then the house must be sold. If the parties are in agreement, the house can be sold while the divorce is pending and the proceeds split as part of the division of the estate.
If the parties are not in agreement about selling the house, either side can request that the court order the sale of the house. Normally, the parties will have a certain amount of time to sell the house after the divorce is finalized. If they cannot agree on a sales price or there are other issues with the sale, a receiver may be appointed to help finalize the sale of the property.
If one spouse is keeping the house, the other would want to ensure that the spouse keeping the house refinanced the property into his or her own name within a certain amount of time after the divorce is finalized. If the house cannot be refinanced, the house should be sold. I would never recommend that a client allow the other party to keep a house without having my client’s name removed from the mortgage for two reasons. One, if the spouse who kept the house fails to make the mortgage payments, the other spouse’s credit will be damaged. Two, the spouse who did not keep the house may be prevented from buying his or her own house in the future due to the large mortgage debt still in his or her name.
Once the spouse keeping the house has it refinanced into his or her own name, the other spouse would need to deed over his or her interest in the house. I usually do this with a Quitclaim Deed, but there are other options as well.
If a house is involved in a divorce, I highly recommend having an attorney to make sure that everything is handled properly. You cannot change a decree years down the road if you made a mistake in how the house was dealt with in the decree. I have seen this destroy people’s ability to move on with their lives. It is well worth the cost to ensure it is done right.