By Justin Liva, Mojo House BuyersA divorce is hard enough without a house in the middle of it. The home may be the biggest thing you own together, and it's tied up with kids, money and memories all at once. I can't tell you what to do with yours, and nothing here is legal advice. Your divorce attorney or mediator is the person who should guide the big decisions. What I can do is explain, in general terms, how the sale side tends to work in New Jersey and where a direct sale can take some pressure off.
When both spouses have to sign off
Married couples in New Jersey can own their home as tenants by the entirety. Under the state's statutes (N.J.S.A. 46:3-17.2), that form of ownership is created when a husband and wife take title together in a written instrument that names them as husband and wife.
The key rule for a divorcing couple is in N.J.S.A. 46:3-17.4: neither spouse may sever, alienate or otherwise affect their interest in a tenancy by the entirety during the marriage or upon separation without the written consent of both spouses. In plain language, when a house is held that way, one spouse can't sell or transfer it out from under the other. You can read the statutes on the New Jersey Legislature's site.
So with that kind of title, expect a buyer to need both spouses' signatures, or whatever authority a court order or your settlement provides, and let your attorney confirm what applies. If you aren't sure how your deed is titled, your attorney can pull it.
How the court looks at the house
New Jersey divides marital property through equitable distribution, which means a court weighs a list of factors instead of applying a set formula. N.J.S.A. 2A:34-23.1 lists factors a court must consider, including how long the marriage lasted, each spouse's income and debts, the tax consequences of the proposed distribution, and the need of a parent with physical custody of a child to own or occupy the marital home.
That last factor is a reminder that selling right away isn't the only possible outcome. Sometimes one spouse keeps it for a time. Sometimes one buys out the other. Sometimes it's sold and the proceeds are split. Which path fits depends on your agreement or the court's decision, and that's squarely a question for your lawyer.
The three common paths
One spouse keeps the house. The spouse who stays may need to refinance to take the other off the mortgage and pay out their share of the equity. The New Jersey Division of Taxation lists exemptions from the realty transfer fee for a deed between husband and wife, and for a deed recorded within 90 days after a divorce decree that dissolves the marriage between the two parties. Ask your attorney whether either one fits your situation.
Sell now and divide the proceeds. This gives both people a clean break and cash to start over. It also means agreeing on a price, a buyer and a date while emotions are high.
Sell later. You might agree to keep the house until a child finishes school or until you're both ready to sell. That keeps both names tied to the property and the mortgage in the meantime, so the details need to be in writing.
Why a listing can be harder during a divorce
A traditional listing asks a lot of two people who may not be speaking. You have to agree on an agent, a list price, any repairs, how to respond to every offer, and who keeps the house ready for showings. If one spouse has already moved out, the house may sit partly empty or partly packed. Each disagreement can slow things down.
None of that means you shouldn't list. If the house is in good shape and you can cooperate for a few months, listing will usually bring the higher price, and I tell couples that directly. Our agent vs. cash buyer guide goes through that choice.
Where a direct sale can help
For some couples, fewer decisions matters more than the last dollar. When I buy a house, there's one offer to evaluate and one closing date to agree on. I buy as-is, so nobody has to fund repairs. You can leave behind whatever neither of you wants; I handle the cleanout after the sale. You don't need to coordinate showings, and I'm not waiting on a mortgage approval.
A few things hold true for any sale in the middle of a divorce:
- Both spouses are part of it, directly or through their attorneys. A buyer shouldn't be taking sides.
- The closing date has to fit the case. If your settlement or a court order sets timing, follow it; I close on the seller's timeline anyway.
- The money goes where the paperwork says. Your attorneys can make sure proceeds are paid out the way your agreement or order requires.
Paperwork that comes up at closing
Every owner of a New Jersey property being sold submits a GIT/REP form to record the deed, and the Division of Taxation's buying and selling guide notes that a married couple is treated as one owner for that form. If one of you has already moved out of state, the rules for nonresident sellers may apply, which is covered in the nonresident seller guide. Ask your accountant about any tax effect of the sale itself.
For the usual seller costs, from the mortgage payoff to the realty transfer fee, see our seller closing costs guide. And if more than two people are on the deed, our guide to selling a house with multiple owners may help.
If you want a number to work with
Sometimes the most useful thing in a divorce negotiation is a firm figure both sides can see. My cash offer is free and comes with no obligation, so you and your attorneys can weigh it against a buyout or a listing. You can request an offer or read our FAQ first.