You need a comprehensive guide to who gets the house in your divorce. In this guide, you’ll learn everything that you need to know about how to set up your marriage properly, who gets the house, and how to sell it together.
Table of Contents
- Who gets to stay in the house during a divorce?
- Do I have to sell my house in a divorce?
- How to get the house in a divorce.
- How to write your divorce agreement when selling your house.
- What is considered marital property in Georgia?
- What are the Georgia divorce laws for assets?
- No headache way for you to sell your house fast.
Who gets to stay in the house during a divorce in Georgia?
You’ve probably been told that everything is split 50/50, but that doesn’t answer your question of “Who gets the house in a Georgia divorce?”
Here are some basic questions to gain insight into who gets the house.
Who WANTS the house?
Why would you fight over a house that you don’t even want? The first thing you need to do is figure out who wants to keep the house.
Maybe one spouse is relocating while the other is staying put. Maybe the mother wants to continue to raise the kiddos in the house that they grew up in for stability. There are tons of reasons that one spouse would want to remain in the house.
Regardless of the scenario, if one spouse wants to keep the house, then you have a couple of options.
- Buy out your spouse’s rights to the house.
- Give your spouse other assets in equal value.
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How To Buy Out Your Spouse’s Rights To The House
Let’s do some quick and easy math (gross).
Let’s assume you and your spouse own a $250,000 house. You have owned it for several years, paid down some of the mortgage, and there has been some appreciation. Now, your loan payoff is $150,000. You now have $100,000 in equity.
$250,000 – $150,000 = $100,000
To be fair, we need to see how much you both would walk away with cash if you sold with a Realtor.
$250,000 * 6% (Realtor Fees) = $15,000
If you sell your house for $250,000, you will be paying 6% Realtor commissions, which is $15,000.
$250,000 – $15,000 – $150,000 = $85,000
To figure out how much cash you would walk away with, you subtract the price you sold your house for ($250,000) by your Realtor fees ($15,000) and the Loan Payoff Amount ($150,000). This leaves you with $85,000 to split with your spouse.
$85,000 / 2 = $42,500
Now that you have your check in hand from the closing attorney for $85,000, you have to split it with your spouse. You will owe them $42,500.
$42,500 is how much equitable interest you have in your home.
If you have $42,500 in cash laying around, then you can buy out your spouse’s equitable interest in the house.
If you DON’T have $42,500 in cash laying around, you can refinance your house. Refinancing will allow you to pull out 75% of the value of the home.
But what does that look like?
You go to the bank, explain to them that you want to buy out your spouse’s rights the house, and ask them for a refinance. They will also need to take your spouse off the title.
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When you refinance, you have to ‘close’ on the house with an Atlanta Real Estate Attorney. When the attorneys close on the house, they will remove your spouse from the title, making you the sole owner.
So, when you refinance, what do the numbers look like?
The banks will send out their appraiser to value the property in the “as-is” condition. To keep the numbers the same, let’s assume that valuation comes out to be $250,000.
They will only lend you 80% of the value of the property for a conventional loan. So, your loan amount from the bank looks like:
$250,000 * 80% = $200,000
But how much money do you NEED? You have a $150,000 loan to pay off and $42,500 in equitable interest to pay to your spouse.
$150,000 + $42,500 = $192,500
This means that the $200,000 loan that you get from refinancing your house WILL pay off your spouse and the current mortgage on the property. Your new mortgage will be $200,000.
Will Your Assets Cover The Equity You Owe Your Spouse?
Your assets can come in several forms.
- Extra car
Remember that your spouse has 50% equity in these assets as well. That even pertains to your savings, car, and retirement accounts.
Let’s say you have $100,000 in your own 401k that you contribute to at your job. But, you would need to pay your spouse $42,500 for them to walk away from the house and let you take full ownership of it.
They own 50% of your $100,000. But, that’s pre-tax. If you were to pull that money out of the 401k, you’re going to pay a 10% early withdrawal tax on it. So, you’re left with $90k.
$100,000 * 10% = $10,000
Let’s say that you have $90,000 equity in your 401k that you have to split with your spouse. You each get $45,000.
$100,000 – $10,000 = $90,000
That means that your retirement account is now worth $45,000 because you have to give your spouse half of that money. And, you want to use your remaining $45,000 to buy them out of the house.
$90,000 / 2 = $45,000
You’d be left with $2,500 after buying them out of the house with your 401k that originally had $100,000 in it.
$45,000 – $42,500 = $2,500
Do I Have To Sell My House In A Divorce?
You do not have to sell your house in divorce in Georgia. If you and your spouse cannot agree on a divorce settlement for the house, then the judge will order you to sell the house. The judge can even assign a Realtor if you cannot decide on one yourself. Once the home is sold, the proceeds are split accordingly to your divorce order.
What if I want to keep the house?
If you or your spouse want to keep the property, then you will have to come to an agreement on how much the house is worth, how much equity the house has, and the person keeping the house has to trade to the spouse walking away from the house’s equity.
In Georgia, the equity is not always split 50/50.
Georgia is an equitable distribution state, which is determined by Georgia’s law on divorce settlements.
Upon divorce, spouses are not guaranteed an equal split of their marital property. Equitable means fair; and, according to Georgia law, fair does not always mean equal.
A quick and easy example as follows. (Note that it’s not this simple, but it gives you an idea of what equitable distribution means.)
Jane and Tom are getting a divorce. Tom makes $120,000 per year and Jane makes $40,000 per year. They both put their paychecks into a single account. They do not have separate accounts. The bills, mortgage, car payments, living expenses, investments, and everything are paid out of this account.
Jane’s equitable contribution is 25% while Tom’s is 75%.
$40,000 + $120,000 = $160,000
The total annual income that goes into the single bank account is $160,000. We are now going to compare how much EACH of the spouses makes to the total income.
|Jane||$40,000 / $160,000 = 25%|
|Tom||$120,000 / $160,000 = 75%|
But what the heck does this mean?
Let’s assume that when you sell your house, you walk away with $100,000 in equity. Per the equitable distribution laws in Georgia, Jane would get $25,000 while Tom would get $75,000. It may initially feel unfair to Jane, but this is how to get the house in a divorce if she wanted to pay off Tom.
If Jane wants to keep the house, she would owe Tom $75,000 to pay him off.
If Tom wants to keep the house, he would owe Jane $25,000 to pay her off.
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How to get the house in a divorce.
So, you’re dead set on getting the house? But can you afford it after losing your spouse’s income? Here’s a step-by-step guide on how to get the house in a divorce.
Check Your Individual Finances
Getting the house and KEEPING the house are two very different things. How easily can you afford to make the same payments with half of the income? What will you have to give up to be able to afford it?
A quick and easy rule of thumb is the 30% rule. The rule is that your housing should not cost more than 30% of your gross income. You can calculate this two ways. Let’s assume that your mortgage is $1,500 and you make $50,000 per year in gross income (before taxes).
Simply multiply your gross income by 30%, or 0.3, and you know how much you can afford annually. Then, do get your monthly affordability, just divide that number by 12 months.
$50,000 x 30% = $15,000
$15,000 / 12 months = $1,250
If you do the 30% Rule, your mortgage is $1,500, and you make $50,000 per year, then you cannot afford the mortgage. But, how do you know how much you need to make to afford this payment easily on your own?
Take your mortgage and divide it by 30%, or 0.3, to know how much you need to earned monthly (before taxes) to comfortably afford the property. Then, just multiply that number by 12 months to know how much you need to earn annually.
$1,500 / 30% = $5,000
$5,000 x 12 months = $60,000
Let’s be honest though. You probably CAN afford it, but should you? How financially stressed would you be if you have this mortgage, a car payment. daycare, the costs of raising children, credit card debts, groceries, utilities, etc.?
Related: How to Leave Your Husband
This will tell you if it’s even worth fighting for the house. Depending on the market and how much equity you have, it’s probably easier and a better financial decision to just sell it.
The last thing you want to do is fight for the house, trade other valuable assets for it, and lose it in two years because you cannot afford it.
When you take your spouse’s name off of the title, you will trigger the due on sale clause. Your lender will be notified that your spouse was taken off the title and that you are the sole person on it. They will make you requalify to maintain the loan on the house. In some cases, especially if your spouse is on the mortgage, they will make you refinance to get a new loan on the house in your name. You will have to prove to the lender that you can afford the property. They use the 30% rule at mortgage companies.
Offsetting A Spouse’s Equity vs Refinancing
By this time, you have done the math. You have figured out that keeping the house is the right financial move for you. Now, it’s time to figure out how to pay for the house. It’s not as easy as just continuing to make the payments.
The simplest option is offsetting your ex’s half of the existing equity by giving up your claim on other marital assets of equal value. These marital assets can be savings, 401ks, vehicles, jewelry, or second homes.
There are other concessions that can be negotiated. These are alimony and child support. For example, let’s assume that you owe your spouse $25,000 for their portion of the equity in the house and that they owe you $500 per month in alimony for 5 years.
$500 x 12 months = $6,000
$6,000 x 5 years = $30,000
You owe them $25,000 and they owe you $30,000. You can renegotiate the difference.
$30,000 – $25,000 = $5,000
Maybe you negotiate that they only pay you alimony for 10 months and the equity in the house is yours. This would benefit them financially as they do not have to come out of pocket $500 per month for the next half-decade.
However, negotiating ownership of the house as an offset during the divorce settlement doesn’t remove your spouse from the mortgage or the deed. You will have to speak to a real estate attorney in Atlanta, but you will need to have an attorney put the house through escrow so that the names on the title are corrected and recorded.
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Just remember how much you need to refinance and quality for.
Let’s assume you owe $100,000 and the house has a total of $50,000 in equity. Your house is worth $150,000. When you refinance during a divorce, you have to refinance out the amount of equity that you owe your spouse too.
This means that if you have $50,000 in equity, then you are getting a loan to pay them their $25,000. With that, you’ll have $100,000 (the old loan) plus $25,000 (your spouses’ equity) to refinance. You’ll have a new loan of $125,000.
Spouses’ Equity: $50,000 / 2 = $25,000
Loan Amount: $100k + $25k = $125k
Just keep in mind that you’ll be refinancing for the existing loan amount PLUS half of the existing equity—and you’ll need to qualify for that larger loan amount on your income alone, which may not be feasible.
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Lenders aren’t eager to refinance home loans for more than 80% of the home’s current value. If the combined debt and equity push you above that threshold, you may not qualify for the mortgage on your own.
For this example, you would be over the 80% threshold.
$125,000 / $150,000 = 83%
This doesn’t keep you from getting a loan. It just means that you need to put a down payment down on the house. For this, it would be only 3% to bring the loan to 80% of the value of the home.
$150,000 x 80% = $120,000
The easy way to calculate this is to find the home value and multiply it by 80% to figure out how much loan you can get. Then, figure out how much you owe. In this case, it’s the loan payoff ($100,000) plus your spouses’ equity ($25,000), or $125,000.
Subtract the amount you owe by the amount of loan you can get. This is how much money you would need to bring to the closing table via cashier’s check to be able to close on the property.
$125,000 – $120,000 = $5,000
But if you do negotiate a way to keep the house, don’t forget: whether you negotiate an offset or refinance the mortgage, you must also remove your ex from the deed.
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Build your negotiating power.
What you want for your home is not how much it’s worth. The value of your home is determined by how much someone is willing to pay for it.
The easiest way to find out how much someone is willing to pay for your house is to have an appraisal done. (The lender refinancing your house will have their appraiser check out the house.)
They will look at SIMILAR homes that have recently sold. So, if your house is worth $250,000, but “Susie’s house sold for $500,000 next door,” then why is that? What makes her house different?
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Does she have 500 more square feet? Did she invest $35,000 to upgrade her kitchen? Did she spend $60,000 upgrading all three bathrooms? Is hers a two-story versus your one story? Did she replace all of the windows, flooring, paint, roof, HVAC, and water heater? What makes her’s different?
Appraisers will look for homes that have sold in the last three months, that have the same bedroom and bathroom count, have the same square footage, and that have the same finishes. If your kitchen hasn’t been updated in 15 years, they will compare your home to a house with the same kitchen.
Most sellers ask a real estate agent to give them a comparative market analysis (CMA). Note that the price they tell you may be inflated.
They know that you are calling three other agents. They want to make sure that you believe that you would make the most money by listing with them. So, they will make sure that they show you how your house is worth more and for what reasons. Be sure to ask them for a realistic sale price, not one where they list the house and TRY to get $20,000 extra.
Real estate markets are known to go up and down. Just remember that divorce prolongs the selling process, especially in states that require a separation or “cooling off” period. Your home’s value is will most likely change between when you get the CMA and when you finally find a buyer. Ask your agent what price the house needs to be at to sell fast.
CMAs are presented to show the most money that the house could possibly sell for. If you’re trying to buy out your spouse’s equity, then you don’t want to base your valuation on a CMA.
During the buy out process, you are the buyer, trying to get the lowest price possible, while your spouse is the seller, trying to make the most money possible.
The best way to get a realistic valuation on your property that is fair is to hire third-party appraisers. You and your spouse should both hire an appraiser. Your bank will also hire an appraiser. Then, average the three appraised values together. This is the most accurate (and unbiased) way to value the property.
How To Write Your Divorce Agreement When Selling Your House
Once you decide to sell, you and your spouse need to write up a divorce agreement laying out how you plan on selling your house.
This detailed process is laid out below.
Picking A Realtor Who Knows Divorce
Divorces are naturally awkward scenarios when dragging in outside parties. Selling your house involves other agents, potential buyers, lenders, appraisers, inspectors, and contractors.
You want to make sure that you have a Realtor who has experience with selling houses during a divorce process. As much as it sucks for you and your spouse, they will know how to rein you both in when things are getting out of hand. This doesn’t mean they are assholes, it just means that the set the proper expectations.
An easy tip is that if you were happy with the agent that helped you buy the house, then use that agent to sell the house. Regardless, you both will have to decide which real estate agent to use.
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Search for an Atlanta Realtor on Google and start with the ones that have the best reviews (and a lot of reviews). Find 10 Realtors, call them, and ask them if they have sold a house for a couple going through a divorce. This should narrow your options down to 2-3. Have them all come to the house and interview them. Pick one that you both are happy with.
If you can’t decide, leave the decision up to the judge (not your divorce attorney in Atlanta – they will just bicker and the more they bicker, the more you pay them).
Settling on an Asking Price
Take your Realtor’s advice on your asking price.
They are the expert. It doesn’t matter if Sally down the street sold her house for $500,000 and your Realtor tells you that your house is worth $425,000. Your Realtor is the expert and that’s why you hired them.
But not all agents are right just because they are an agent. It’s important to have at least three Realtors tour your house, give you a list of upgrades to make, and provide you with a potential asking price.
Also, your goal should be to eliminate conflict. Turning over the decision to the Realtor will allow you to keep the decision out of your hands during the divorce.
Ask yourself what your goals are. Do you want to let the house sit on the market for 5 months to get the highest possible price or do you want to discount it slightly to give someone a deal so that you can sell it fast? That’s the decisions that you and your spouse should be making.
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Renovating the House
Is your house in tip-top shape? Has it been renovated in the last 2 years and is in HGTV quality? Probably not (but that’s okay – whose house really is?).
Your Realtor probably gave you a list of things to fix before listing. This is so that you and your spouse can ask for the highest asking price possible.
But that leads to a new question. Who is going to manage the contractors? Who is paying for the renovations? Who picks the contractors? Who is taking off work to meet with contractors? Who is picking up supplies at Home Depot after work during the week?
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As you can tell, you have a lot of decisions to make. It’s important that ONE of you manage this whole project. If there are two leaders, there are none. If you both are making decisions, then you will naturally become combative.
The key here is to remember that, while you’re getting a divorce, you’re on the same team. You both want the same thing. A smooth, cheap renovation that allows you to make the most money from selling the house. It’s that simple.
But what should you do? Determine which of you is better at organizing and managing projects. Let that person manage it.
While you may not be on great terms with them, HELP them with this. That doesn’t mean try to take over. That means pick up stuff from Home Depot if they can’t. Meet contractors if they can’t. Just be helpful. It will make the process go a lot smoother.
Preparing to Show the House
Here’s the fun part. Getting the house ready. Here come more decisions to be made.
Who is going to clean the house? Who is hauling stuff to the storage unit? Who is packing? Who is keeping the house clean? Who is taking off work early to get the house ready for a pop-up showing on a Wednesday night at 5 PM?
Since you and your spouse are divvying up the belongings, this project may be a good one to tag team. It would be easier to just spend 1-2 weeks BEFORE you list the house splitting up your belongings into different piles and packing and moving them yourselves.
After you have separated your belongings and put them in storage, it’s time to do a deep clean. It’s totally worth spending $200 to have a cleaning company come in and do this for you.
Now that it’s clean, you are listing it. It’s your job to make your house available to any potential buyers. This means that if your Realtor calls you at lunch while you’re at work and says that someone wants to see the house at 3 PM, then you need to make sure that the house is ready to be toured. That may mean that you take off work at 1:30 PM and go home and do a quick clean and go back to work.
So, you and your spouse have to decide who is going to be the one who takes off work. Make it fair. How about you stagger days that you’re going to be assigned to. Such as, you get Monday, Wednesday, and Friday and your spouse gets the other two days of the week. Then swap the next week.
Again, you’re a team. Work together each morning to clean up and make sure that the house is show ready BEFORE you leave for work.
You will want to review offers together. But a word of advice: Don’t just focus on the price.
What are the terms that they are asking you to provide them with? Some normal clauses when selling with a Realtor are:
- 10 days due diligence
- Subject to inspection
- Subject to obtaining financing
An example clause to look out for when selling your house during or after a divorce is subject to selling their house BEFORE buying yours. When you encounter this, make sure you use a Bump Clause in your contract with the buyer.
You’ll have to work together when it comes time to review offers from potential buyers, especially if you live in a place where the real estate market is volatile. Your agent can advise you, of course, but ultimately you’ll have to make the decision jointly.
Don’t get greedy. Even if you think the market is hot, Susie down the street sold for $100k more or your cousin’s best friend who is a real estate agent in Arkansas told you can get more. Listen to your agent. They will be able to tell you if you have a good offer on the table.
Dividing the Cash
This can be the fun part or the headache. Check out our breakdown of how to split the funds from selling your house during a divorce.
If you cannot come to an agreement with your spouse on how to split up the funds from selling the home, then the judge will decide for you.
I wish I could make it simple and say that it’s an easy 50/50 split. But Georgia is an equitable division state.
That means that you and your spouse have to quantify your contributions to the equity in the house with percentages. For example, maybe you paid $750 per month while your spouse paid $250. That would mean that 75% of the equity in the house is yours.
Once you have an agreement in writing, the escrow company can distribute the designated funds from the sale of the house into the appropriate accounts.
Example of Selling Your House During a Divorce and Splitting the Proceeds.
Imagine you and your spouse split up. A year goes by before you actually sell your house (not uncommon).
During this time, some things have happened financially. Your spouse has paid the mortgage for 12 months. They have also paid child support and alimony during that time. Each month that they make the $2,200 mortgage payment, $1,700 goes to interest and $500 goes to the principle.
This means that they ALONE have paid down $6,000, which increased the equity. They would be fully justified in getting a split based on contributions made to the equity.
But what if neither one of you want the house? What if you just want to move on and cut all ties that you may have with the marriage?
Related: Cost of Divorce in Georgia
What is considered marital property in Georgia?
Marital property in Georgia is considered anything that has been acquired during the marriage. This includes income, your home, furniture, cars, retirement accounts, bank accounts, etc.
During a divorce, the Georgia courts will generally distinguish between what’s marital property and what’s separate property. Marital property is defined as assets acquired during the marriage, like income, your home, furniture, cars, retirement accounts, and bank accounts. Separate property is anything that was owned before the marriage.
Separate Property vs. Marital Property
The first order of business is to make a list of your properties and other assets with their estimated value, how much you owe, and the potential equity. Then categorize them as separate property or marital property.
Separate property, or premarital property, is any property that was acquired before marriage by either spouse. Even some assets acquired during the marriage can be separate property. For example, inheriting a property willed solely to an individual spouse is separate property, even if acquired during the marriage.
Even though there are specific exceptions, most property acquired during the marriage is marital property.
But what if it’s only in your name? Even if only your name is on the title for the house or vehicles, the property is still marriage property and must be divided accordingly.
Related: Child Support Laws Georgia
What Are The Georgia Divorce Laws For Assets?
Separate property is retained by its original owner. Marital property is divided by equitable distribution during a divorce in Georgia.
Equitable distribution is dividing the marital property by what is fair, not just 50/50. To determine the equitable distribution in Georgia, the judge will evaluate numerous factors. These factors include things like:
- Did one spouse stay home and give up their career to raise the children?
- The contributions of each spouse during the marriage.
- Non-monetary contributions like raising children or doing the labor on a home renovation.
- Financial needs of each spouse (does one need to go back to college to earn a fair wage?).
While this is not an extensive list, it provides an idea of what factors go into equitable distribution when considering Georgia divorce law and division of assets.
Related: Uncontested Divorce In Georgia
No headache way for you to sell their house fast.
You’re in a tough spot. You want to sell your house easily and for the most money with the least amount of effort, right? The tough part is that you don’t know how to navigate selling your house during a divorce.
Divorce is crappy enough without adding the troubles of selling your house too. Finding a Realtor, hiring and managing contractors, spending tens of thousands in repairs, cleaning the house and keeping it clean daily, random showings, open houses, neighbors snooping, losing thousands to Realtor fees. You get the gist.
Selling to Breyer Home Buyers during a divorce is easy.
Breyer Home Buyers buys houses in and around Atlanta (and other areas too!).
We’re not listing your house… we’re actually the ones buying your house.
Because we pay cash, we’re able to close quickly… or on your schedule.
Like we’ve mentioned, when you work with us there are no fees… like there are when you list your house with an agent.
Related: Filing for Divorce In Georgia
What this means to you is you don’t have to worry about extra costs, having to come out of pocket to sell your house fast, or even getting your house ready for a sale (we’ll buy your house as-is).
Don’t worry about repairing or cleaning up your property.
We’ll buy your house in as-is condition… no matter how ugly or pretty it is… no matter the location.
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Frequently Asked Questions
How is property split in a divorce in Georgia?
During a divorce in Georgia, the property is split according to equitable distribution, or what is fair. However, separate property, or pre-marital property, is kept by its original owner. Marital property is subject to an equitable split.
Do I have to sell my house in a divorce?
You do not have to sell your house during a divorce in Georgia. You can refinance your spouse out of the house or sell your house as part of your divorce. Any proceeds that come from selling the house will be split fairly between you and your spouse.
What is considered marital property in Georgia?
Marital property is the property that was acquired during the marriage. Even if that property is held only in one spouse’s name, it’s still marital property. Marital property includes things like cars, houses, 401k, savings, debts, and gifts.
Who gets the house in a divorce in GA?
You and your spouse can choose who gets the house in a divorce in Georgia. One spouse can trade the house for other marital property. Or you can just sell the house and split the money from the sale of the property.