Divorce is a challenging time, and one of the biggest concerns for homeowners going through a divorce is what to do with their house. If you find yourself in this situation, you’re not alone.
In Maryland, where the divorce rate is approximately 30%, many homeowners face the dilemma of selling their house in a divorce.
In this guide, you’ll learn everything you need to know about how to sell a house during a divorce in Maryland.
Specifically, you’ll discover:
- How divorce affects property rights and responsibilities in Maryland
- How to sell a house during a divorce in Maryland (step-by-step)
- How to handle the family home in MD during a divorce
- What are the legal and financial implications of selling a house in MD when divorcing, and more…
If you want to sell your house in Maryland fast and easy during a divorce and avoid common pitfalls and problems, you’ll love this guide.
Disclaimer: This blog post is intended for educational purposes only. As every real estate transaction is unique, Creo Home Buyers recommends you consult with a trusted advisor regarding your specific situation.
What Happens to a House During a Divorce in Maryland?
One of the most common questions that divorcing couples in Maryland have is: what happens to our house?
After all, your house is probably one of your biggest and most valuable assets, not to mention a place where you have created memories and invested time and money.
Specifically, how do you decide who gets the house, how to divide it, or even how to sell a house during a divorce in Maryland?
The answer depends on several factors, such as:
- how your property was financed and titled
- whether you have a prenuptial or postnuptial agreement
- what state laws apply to your situation
In this section, we will explain some of the basics of how going through a divorce affects property rights and responsibilities when selling in Maryland.
A. Is Your House in Maryland Considered Marital Property?
The first thing you need to know is whether your house is even considered to be marital property or if it’s separate property. This distinction will determine how your house will be divided in a divorce in MD.
Marital property is any property that you or your spouse acquired or earned during the marriage, regardless of whose name is on the title or who paid for it.
For example, if you bought your house together after you got married, or if you used money from your joint account to pay for the mortgage, then your house is considered marital property in the state of Maryland.
Separate property is any property that you or your spouse owned before the marriage, or inherited or received as a gift during the marriage.
For example, if you inherited your house from your parents, or if your spouse gave you the house as a gift and put it in your name only, then your house is considered separate property in the state of Maryland.
H4: Separate property can become marital property in MD
How? By mixing it with your spouse’s property.
For example, let’s say you owned a house in Maryland before you got married. And then you put your spouse’s name on the deed. Or you used money from your joint account to fix up the house.
In that case, the house in Maryland becomes marital property. This means your spouse can claim a share of your house’s value or growth. This is known as commingling or transmutation.
Therefore, it is important to keep records of how you acquired and maintained your separate property and consult with an attorney in Maryland to determine its status.
B. How does Maryland split up your property in a divorce?
Well, Maryland follows the equitable distribution rule.
This means that the court divides your property fairly, but not necessarily 50/50. This is different from community property states, where the court splits your property evenly.
In Maryland, the court looks at factors like income, contributions, needs, and length of marriage to decide who gets what.
For example, if you earn more money or put more work into your house than your spouse, you may get a bigger piece of the pie.
But here’s the kicker:
Maryland courts don’t simply cut the house in half or give it to one person in every divorce case.
The court can also explore other options, such as:
- Selling the house and sharing the money
- Letting one person buy out the other person’s share
- Letting one person keep the house and pay the other person alimony or a lump sum
- Co-owning the house until something happens (like your kids grow up or one of you remarries)
Each option has its pros and cons. And each option may affect your finances and taxes differently.
That’s why you may want to talk to a divorce lawyer and an accountant versed in assisting couples sort their finances and sell property in MD. They can help you understand the consequences of each option and help you pick the best house selling option for your particular situation.
C. How Can One Spouse Keep the House in MD?
If one spouse wants to keep the house after the divorce (and can afford to do so), there are several options for doing so.
The most common ones are:
1. Buying out the other spouse’s share of the house
This option involves one spouse paying the other spouse an agreed-upon amount for their share of the equity in the house. The equity is calculated by subtracting any outstanding mortgage balance or other liens from the current market value of the house.
For example:
Current market value: $300,000
Mortgage balance: $200,000
Equity: $100,000
Buyout amount: $50,000 (half of equity)
This option allows one spouse to become the sole owner of the house and remove the other spouse’s name from the title and mortgage.
2. Paying alimony or a lump sum to the other spouse
Another option is to let one person keep the house and pay the other person alimony or a lump sum in exchange.
Alimony is a monthly check that one person agrees to send to their ex-spouse for a specified amount of time. The amount depends on things like income, needs, and lifestyle.
A lump sum is a big payment that one person gives to the other person once. The amount will likely depend on things like the value of the house or other assets that are being exchanged for a lump payment.
This option lets one person keep the home without necessarily having to get a new loan or sell other stuff. But there’s a catch:
This option also means that one person has to have enough money or savings to pay for the alimony or lump sum. And this option may also impact your taxes and credit scores.
3. Co-owning the house until a certain event
Co-owning marital property means that both of you keep your names on the deed and the loan and agree to own the house together until a certain event happens.
For example, until your kids grow up, the market gets better, or one of you gets married again.
During this time, one of you can stay in the house and the other can move out. Or both of you can move out and rent the house to someone else. Or in some cases, spouses agree to continue living in the house together after the divorce for a period of time.
Continuing to co-own the house in MD lets both of you keep your stake and share in the house and avoid losing money on the sale. But here’s the thing:
This option also means that both of you have to work together and talk to each other and split the costs and duties of keeping up the house. Many couples going through a divorce ultimately find the work required in co-owning property too difficult and choose to sell or buy out the other spouse.
However, every option also requires one or both spouses to have enough cash or assets to cover the costs of buying the house in Maryland or co-owning it together. Additionally, either of these options may affect taxes and credit scores for one or both members of the divorcing couple. So it can be beneficial to talked to an experienced tax attorney and divorce lawyer to help you settle your financial and real estate affairs in MD.
If while going through a divorce, you and your spouse both decide to sell your Maryland home rather than keep it read on to learn how.
How to Sell a House During a Divorce in Maryland
If you and your spouse decide to sell the house during your divorce, you will need to follow some steps and tips to make the process smoother and more successful.
Selling a house when divorcing in Maryland may have some benefits, such as having a fresh start, reducing your expenses, or simplifying your finances. However, it also usually comes with challenges even when you both want to sell.
You’ll need to agree on terms, how to prepare the house for sale, marketing, negotiating offers, and how to divide the proceeds.
Here are some of the options and tips for selling a home during divorce in Maryland:
A. Should Both Spouses Agree to Sell the House?
The first step in selling property during a divorce is to have both spouses’ consent to sell. This is important because if one spouse refuses to sell or cooperate with the sale, it can cause delays, complications, or legal disputes.
Therefore, it is advisable to have a written agreement between you and your spouse that outlines the terms and conditions for the sale your property in Maryland, such as:
- The list price and minimum acceptable price
- The division of proceeds and expenses
- The authority and responsibility of each spouse
- The timeline and deadlines of the sale
- The contingency plans in case of issues
Having an agreement can help you avoid conflicts and misunderstandings with your spouse and make the sale process faster and easier. However, if you cannot reach an agreement with your spouse or if your spouse is uncooperative, you may wish to seek professional legal help from a Maryland divorce attorney.
B. Should a Real Estate Agent be Consulted?
The next step to selling property during a divorce is to determine if you want to consult with a real estate agent who can help you with the sale process.
A real estate agent can provide you with valuable services such as:
- Conducting market research and analysis
- Suggesting improvements and repairs
- Setting a realistic and competitive price
- Marketing your home to potential buyers
- Scheduling and hosting showings and open houses
- Negotiating offers and contracts
- Handling paperwork and closing details
However, not all real estate agents are created equal. When you need to sell during a divorce, you need an agent who has experience and who can work with both spouses professionally and empathetically.
You also need an agent who can remain neutral and unbiased and who will represent your best interests without favoring one spouse over the other during the home sale.
Therefore, it is important to do some research and interview several agents before choosing one to sell your home in Maryland. You can ask Maryland real estate agents about their qualifications, experience working with couples going through a divorce, references, fees, communication style, availability, and home selling strategy. You can also ask for referrals from friends or family who have sold their homes during a divorce in MD.
C. Determine Fair Market Value of Your MD Home
The third step to selling real estate when divorcing in MD is to determine its fair market value. This is the price that a willing buyer in MD would pay for your home in its current condition in today’s market.
Knowing your home’s fair market value can help you set a price that attracts buyers and maximizes your profit.
There are several ways to determine your home’s fair market value in Maryland, such as:
- Comparing it with similar homes that have sold recently in your area (also known as comparables or comps)
- Hiring an appraiser who can provide an objective and professional opinion of your home’s value based on its features, condition, location, and market trends
- Using online tools or calculators that can estimate your home’s value in MD based on data and algorithms
However, keep in mind that none of these methods are 100% accurate or reliable. They may not account for all the factors that affect your home’s value, such as its unique features, upgrades, defects, or curb appeal. They may also not reflect the current market conditions, such as supply and demand, buyer preferences, or market seasonality.
Therefore, it is advisable to consult with a reliable real estate agent in MD who can provide you with a more accurate and updated valuation of your home based on their expertise and knowledge of the local market.
III. How to Handle the Family Home During a Divorce in Maryland
The fourth step to selling a house during divorce is how to handle the family home during the divorce proceedings. This involves preparing your home for sale, marketing your home effectively, and negotiating the sale with your soon-to-be ex-spouse.
A. How to Prepare Your Home for Sale During Divorce Proceedings
One of the keys to selling property during a divorce is to make your home look amazing and attract buyers.
How?
By decluttering, cleaning, repairing, staging, or updating your home before you list it.
Here’s how each step works:
Decluttering: This is where you get rid of any stuff that you or your spouse don’t need or want anymore. Donate, sell, or toss anything that makes your home look cluttered, messy, or old. Pack and store any personal items that may distract buyers from your home’s features, like family photos, trophies, or collections.
Cleaning: This is where you make your home shine and sparkle from top to bottom. Focus on every detail, like dusting, vacuuming, wiping, scrubbing, polishing, or sanitizing every surface, corner, and crevice. Get rid of any smells or stains that may turn off buyers, like pet odors, cigarette smoke, or mold.
Repairing: This is where you fix any issues that may affect your home’s function, safety, or look. Fix any problems that may lower your home’s value or make buyers ask for repairs or discounts, like leaky faucets, cracked tiles, peeling paint, broken windows, or faulty appliances.
Staging: This is where you arrange your furniture and accessories in a way that shows off your home’s space, layout, and potential. Here are some basic rules of staging, like:
- Removing any big furniture – that may make your rooms look smaller
- Rearranging your furniture – in a way that creates a good flow and highlights focal points
- Adding some accents and touches – that create a cozy and welcoming vibe
- Choosing neutral colors and themes – that appeal to a broad range of buyers
- Adding some plants and flowers – that add life and freshness
Updating: This is where you make some changes that may boost your home’s appeal and value. You can hire a pro or do it yourself. You should concentrate on areas that matter most to Maryland buyers, like:
- New cabinets, countertops, backsplash, appliances in your kitchen
- New fixtures, cabinets, and tile in your bathroom
- New carpet, hardwood, tile, or laminate floors
- New light fixtures, lamps, or recessed lighting
- New paint, siding, porch, or landscaping for your home’s exterior
B. What Financial Obligations Exist? Mortgage Payments and Property Taxes
Until you sell the house and transfer the title to an end buyer, you and your spouse are still on the hook for any mortgage payments and property taxes in Maryland. This means that you have to figure out how to split these payments and who will stay in the house or pay rent somewhere else.
Plus, if you sell the marital home for more than what you owe on the loan, you will have some cash left after paying off the debt. But if you sell your home for less than what you owe on the loan, you will have a shortfall or a negative balance. This means that you will have to pay the difference between the sale price and the loan amount to the bank. This is also called a short sale.
And that’s not all.
You also have to pay for closing costs, commissions, repairs, or other expenses (such as cleaning and staging) related to the sale.
Depending on your deal with your spouse and your agent, you may have to share these costs equally or based on a ratio. You may also have to deal with negotiations with the buyer and offer seller concessions to get the house sold.
That’s why you may want to talk to a lawyer and an accountant. They can help you understand what financial obligations you and your spouse have regarding your house in Maryland until you sell it and how to pay them off or transfer any marital property.
C. How to Handle Selling a Home in a Slow Real Estate Market
Another financial implication of selling your house during a divorce is that you may have to deal with a slow real estate market in Maryland.
A slow real estate market is a market where there are more homes for sale than buyers who want to buy them. This means that it may take longer to sell the house and you may have to lower your price or offer incentives to attract buyers.
There are several factors that can affect the demand and supply of homes in your area and how they can impact your sale, such as:
- Location: Some areas are more desirable or convenient than others due to factors such as schools, amenities, transportation, or safety.
- Condition: Some homes are more appealing or functional than others due to factors such as features, upgrades, defects, or maintenance.
- Price: Some homes are more affordable or competitive than others due to factors such as market value, equity, or motivation.
- Season: Some times of the year are more favorable or popular than others due to factors such as weather, holidays, or school schedules.
To get money from your house faster in Maryland you can try:
- Making improvements or repairs to increase your home’s value and appeal that aren’t expensive
- Offering incentives such as paying for closing costs or providing a home warranty
- Considering alternative options such as renting out your house or selling directly to a Maryland cash buyer
However, keep in mind that selling a house in a slow market may not be the best option for you and your spouse. You may have to accept a lower price or a longer time frame than you expected. This can result in deal added conflicts and stress when trying to sell your home quickly.
Therefore, you may wish to consult with your attorney, agent, and accountant to determine whether trying to sell in a slow market is worth it or not and how to minimize the risks and costs.
D. What Role Does the Court Play in the Sale of a Marital Home?
Another legal implication of selling your house during a divorce is that you may have to involve the court in the sale process. The court may play a role in approving the sale of a marital home or resolving disputes or conflicts between spouses regarding the sale of the home.
The court may require you to provide certain documents to approve the sale of a marital home, such as:
- A divorce decree that states how the property will be divided or sold
- A settlement agreement that outlines the terms and conditions of the sale
- A court order that authorizes or orders the sale of the home
The court may also play a role in resolving disputes or conflicts between spouses regarding the sale of the home, such as when a spouse:
- refuses to sell or cooperate with the sale
- disagrees with the price, terms, or division of proceeds
- fails to comply with their obligations or responsibilities
- tries to sabotage or delay the sale
In these cases, the court may intervene and issue orders or sanctions to enforce compliance, resolve disputes, or protect interests. For example, the court may:
- Order one spouse to sign documents or vacate the premises
- Appoint a third party to act as a trustee or receiver to manage the sale
- Award damages or penalties to one spouse for breach of contract or contempt of court
- Modify or terminate alimony or child support based on changes in income or expenses
Therefore, it is important to consult with your divorce attorney, and potentially a lawyer versed in family law if children are involved, and follow the court’s requirements and orders to avoid any delays or complications in the process of selling your Maryland home.
E. What are the Options if One Spouse Wants to Keep the House but Can’t Afford to Buy Out the Other Spouse?
You may find yourself in a situation where one spouse wants to keep the house after the divorce but can’t afford to buy out the other spouse’s share of equity. An option you have here is to refinance the current mortgage or apply for a new loan.
This way, you can remove your spouse’s name from the mortgage and title and become the sole owner of the house. However, this option also requires you to qualify for a new loan based on your income, assets, credit score, and current market value of your property.
Refinancing has some advantages and disadvantages for both sides of the divorcing couple. For example:
If you decide to keep the house you’ll be able to enjoy the home and avoid moving costs. However, you may find yourself with a higher interest rate or monthly payment than before.
If you decide to sell your share of the house to your spouse then you can receive your share of the equity and no longer be responsible for mortgage payments. However, you may lose some tax benefits and the potential for further appreciation of your property.
While both spouses may have to pay refinancing fees or penalties, they are able to avoid selling costs and taxes when refinancing.
Therefore, it you may consider to consulting with your attorney and accountant to determine whether refinancing your mortgage is a viable option for you and your spouse and how to do it properly.
V. Conclusion
Selling a house in Maryland during a divorce can be a complex and stressful process that involves legal, financial, and emotional implications. However, it can also be an opportunity for you and your spouse to move on with your lives and achieve your goals.
In this guide, we’ve reviewed some of the basics of how marital property is treated and how to sell a house during a divorce in Maryland.
We hope that this guide has provided you with some valuable information and tips that can help you make informed decisions and avoid common pitfalls when deciding whether to keep or sell your house during a divorce in MD.
However, every divorcing couples’ situation is unique and you may have specific questions or concerns that are not covered by this guide. That’s why we encourage you to seek professional help or support from qualified experts such as real estate agents, divorce attorneys, financial planners, or counselors when deciding what to do with your marital property in Maryland.
Considering Getting a Cash Offer for Your Marital House in MD?
If you are looking for a hassle-free way to sell your house without realtors during a divorce in Maryland then you might consider selling directly to Creo Home Buyers for quick cash.
Creo Home Buyers is a local company that buys houses in any condition, location, or situation in Maryland.
Selling to Creo Home Buyers can save you time, money, and stress when you need cash for your house when divorcing in Maryland.
You can avoid the hassle of listing, showing, negotiating, and waiting for your house to sell. You can also avoid the risk of losing money or facing legal issues if your house doesn’t sell or if your spouse doesn’t cooperate.
If you are interested in selling your house to Creo Home Buyers, all you have to do is fill out this form or call us at 410-870-9228. We will contact you as soon as possible and answer any questions you may have. We will also schedule a visit to your house or make you a no-obligation cash offer over the phone. If you accept our offer, we will take care of the rest and you’ll be paid at closing.
Selling a home during a divorce doesn’t have to be so hard or painful. With Creo Home Buyers, you can sell your house fast and easy and move on with your life. Contact us today and let us help you turn your house in Maryland into cash.