Selling a house during a divorce in Washington
Selling a house during a divorce in Washington works like any sale, with one extra rule: a house bought during the marriage is usually community property, and both spouses have to sign to sell it, unless a court order or the decree says who can. Escrow pays out the proceeds the way your agreement or decree divides them.
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Is Washington a 50/50 state for the house in a divorce?
Not automatically. Washington is a community property state, so a house bought during the marriage generally belongs to both spouses. When a court divides property in a divorce, though, it doesn't start from a fixed percentage. It makes the split that appears just and equitable after looking at the whole picture.
| Who signs the sale | Washington source | |
|---|---|---|
| Community property (bought during the marriage) | Both spouses join in signing the deed, and both acknowledge it | RCW 26.16.030(3) |
| Separate property (owned before the marriage, or received by gift or inheritance) | The spouse who owns it can sell without the other joining. Ask the title company what it needs to see. | RCW 26.16.010 |
| A court order or the final decree covers the house | Whoever the order or decree says, which may be one of you or both | Your order or decree, read with your attorney |
The house is usually owned 50/50, but in a divorce it's divided however your agreement or the court decides. RCW 26.09.080 tells a Washington court dividing property in a dissolution to make the disposition that seems just and equitable, without regard to misconduct, after considering all relevant factors. The statute names four: the nature and extent of the community property, the nature and extent of each spouse's separate property, how long the marriage lasted, and each spouse's economic circumstances when the division takes effect. That last factor mentions the family home by name. The court can consider awarding the home, or the right to live in it for a reasonable period, to the spouse the children live with most of the time. So a decree might order a sale and an equal split, award the house to one of you with a payment to the other, or something in between. Your own family law attorney can tell you how that applies to yours.
Can my spouse sell our house without my signature?
Not if it's community property. Washington law says neither spouse can sell, convey or mortgage community real estate unless the other joins in signing the deed, and both have to acknowledge it. Title and escrow confirm who has to sign before closing, and a sale missing one of those signatures doesn't close.
When one of you won't sign, the decision moves to the divorce case. The court can award the house to one spouse or direct a sale as part of dividing the property, and then the order or the decree is what the title company relies on. Your attorney is the person who can tell you how to ask the court for that.
What a temporary order can change
Once a divorce case is open, either spouse can ask the court for a temporary order that restrains transferring, encumbering or disposing of property, except in the usual course of business or for the necessities of life (RCW 26.09.060(2)(a)). If an order like that is in place in your case, ask your attorney what it allows before you sign a listing agreement or a purchase contract.
Is it better to sell before or after the divorce settlement?
Neither is better in every case. Selling property before the divorce settlement turns the house into money the two of you divide and can end a shared mortgage sooner. Selling after the decree follows a plan the court has already approved. Which fits depends on your agreement, the market, and who can keep paying for the house meanwhile.
| Before the decree | After the decree | |
|---|---|---|
| Who signs | Both of you, for community property, within any temporary order in the case | Whoever the decree names: one of you, or both when it orders a sale |
| Where the money goes | Escrow follows the written instructions you both sign, which can say to hold the money or split it | Split the way the decree says |
| Timing | Any time both of you agree, even while the 90-day wait the divorce statute sets is still running (RCW 26.09.030). | Once the decree is entered |
| The mortgage | Paid off from the sale at closing | Paid off from the sale at closing, or refinanced by the spouse who keeps the house |
Why some couples sell first
- Neither of you can afford the house alone, and the payments are hard to split while you live apart.
- A sum of money is easier to divide than a house, and the price is settled by a real buyer instead of an argument.
- Both names come off the loan when the sale pays it off, instead of waiting on a refinance.
Why some wait for the decree
- You can't yet agree on price, timing or who handles the sale, and the decree will settle it.
- One of you may want to keep the house, and the decree is where that gets decided.
- Your attorneys want the split of the money written into the decree before anything is sold.
How are the proceeds split when a house sells during a divorce?
The way your written agreement or the court's decree says. At closing, escrow first pays off the mortgage, any other liens, the excise tax and the closing costs. What's left over is the net proceeds, and escrow pays it out by the instructions both of you sign, or by the order. Your attorney tells you what those instructions should say.
- The mortgage payoff, plus any second mortgage or home equity line, comes off the top.
- Liens such as a judgment or unpaid property tax are paid from the sale too.
- Washington's real estate excise tax applies to a sale to an outside buyer, even when the decree is what orders the sale (WAC 458-61A-203(3)).
- Title, escrow and recording fees, and a commission if the house was listed, come out before the net. The cash sale vs listing page sets the costs of each route side by side.
Taxes on the gain
For federal income tax, IRS Publication 523 says you may be able to exclude up to $250,000 of gain on the sale of your home, or $500,000 for a married couple filing jointly. It also has two rules for separated and divorced owners: if your spouse or former spouse transferred the home to you, you can count the time they owned it as time you owned it, and you can treat the home as your residence while your spouse or former spouse lives there under a divorce or separation instrument. Whether those rules fit your sale, and how to report it, is a question for a tax professional.
Can one spouse keep the house instead of selling?
Yes, when the agreement or the decree awards it to one of you. That usually means a buyout: the spouse who keeps the house pays the other for their share, often by refinancing the mortgage into one name. Washington doesn't charge real estate excise tax on a transfer between spouses that carries out the settlement.
The lender isn't a party to the divorce. Everyone who signed the loan stays responsible for it until it's paid off or refinanced, whatever the decree says about who keeps the house. When the spouse keeping it can't qualify for a refinance on one income, couples often end up selling after all, and that's a conversation to have with your attorney and a loan officer before the agreement is signed.
How hard is it to sell a house during a divorce?
The paperwork is ordinary. What makes it harder is that two people have to agree on every decision: the price, who sells it, repairs, showings and the closing date. When you can't agree, the decision moves to your attorneys or the court, and that's where most of the extra time comes from.
- Agreeing on a price
- Each of you may have a number in mind. A written offer or a listing estimate gives you both the same figure to react to.
- One of you still lives there
- Showings, repairs and keeping the house ready to show fall on whoever is living in it, while the other waits on the result.
- Who pays for repairs
- Fixing the roof or painting before a listing costs money now, and you have to agree on whose money it is and how it's paid back at closing.
- Two attorneys reading the papers
- Each of you may want your own attorney to read the purchase contract before you sign, and that takes days, not hours.
If I make an offer, both of you get the same written offer at the same time, because both of you sign. I don't take sides on how the money is divided. That part belongs to your agreement.
Where a sale fits
Selling is one option. Some couples keep the house through a buyout, some keep owning it together for a while, and some sell it, either listed on the market or as it is for cash. Which one fits depends on the house, the loan and what your agreement or the decree says.
- One of you keeps it
- A buyout and a refinance, when the spouse keeping the house can carry the loan alone.
- Keep owning it together for now
- A decree can give one spouse the right to live in the house for a reasonable period before it's sold, and the statute names this for the spouse the children live with most of the time. Your attorney can say whether that fits your case.
- List it
- When the house shows well and there's time, a listing usually brings the higher price. I can list it as your broker, with both of you signing the listing agreement, and I'll tell you plainly when a listing will leave you more than my cash offer. Jason Bryant is a licensed broker with Windermere Real Estate (license 101377).
- Sell it as-is for cash
- When the house needs work, neither of you wants months of showings, or you both want one fixed closing date, a cash sale skips the repairs and the open houses. I make a written offer only when the numbers work, with every cost listed line by line.
- Get advice first
- When you don't agree on selling at all, or a temporary order is in place, each of you should talk to your own attorney before talking to any buyer. Washington Law Help has free information on divorce and a legal aid finder.
Selling a house during a divorce, step by step
A sale during a divorce follows the same steps as any sale, with two additions: both owners agree in writing at each step, and the money is paid out by your agreement or the decree.
Check how the house is titled
Pull the recorded deed from the county or a title company. Whose names are on it, and when the house was bought, tell you whose signatures the sale needs.
On the first call I ask whose names are on the deed and whether a divorce case is open, because that sets who signs everything after.
Agree on selling, in writing
Put the decision to sell, and who handles it, in writing between you, or follow what the court has ordered. Your attorneys can draft it.
Both owners usually sign, so both of you see the same written offer.
Get the numbers both of you can see
Ask the lender for a payoff figure and look at what each way of selling would leave after costs.
I'll price it both ways, as a cash sale and as a listing with me, and send the same written numbers to both of you. Jason Bryant is a licensed broker with Windermere Real Estate (license 101377).
Choose how to sell and sign
Both owners sign the listing agreement or the purchase contract. If you'd rather not sit at the same table, ask escrow about signing at separate times.
Nothing is final until both of you have signed.
Close and split the proceeds
Escrow pays the loan, liens, excise tax and costs, then pays out the rest by the instructions you both signed or the court's order.
I go through the settlement statement line by line with both of you before anyone signs.
Questions sellers ask
Can I sell my house before my divorce is final in Washington?
Yes, if both spouses sign, since a house bought during the marriage is usually community property (RCW 26.16.030). Check first whether a temporary order in your case restrains selling property. The divorce itself can't be decided sooner than 90 days after the petition is filed and the other spouse is served (RCW 26.09.030).
Can a court order the sale of a house in a divorce?
Yes. In a dissolution the court disposes of the property and debts in the way that seems just and equitable (RCW 26.09.080), and a decree can direct that the house be sold and the proceeds divided, or award it to one spouse. Your attorney is the person to ask how to request either one.
Who pays the mortgage while the house is for sale?
Your agreement or a temporary order usually decides that between you. The lender still expects the full payment from the people who signed the loan, so a missed payment affects both of you until the sale closes and pays the loan off.
Does the divorce decree take my name off the mortgage?
No. The decree can say who keeps the house and who pays, but the loan stays in every borrower's name until it's paid off by a sale or refinanced by the spouse who keeps the house. Only the lender can release a borrower.
Is the house mine alone if I owned it before we married?
Property you owned before the marriage, or received by gift or inheritance, is separate property under RCW 26.16.010, and you can sell it without your spouse joining. Mortgage payments or improvements made during the marriage can complicate that, so ask your attorney and the title company before you list it.
Do we both have to be at the closing?
Both of you have to sign when the house is community property, but not necessarily in the same room or at the same time. Escrow can usually set up separate signing appointments, and each signature on the deed is acknowledged before a notary.
Is there excise tax when one spouse buys out the other?
Not on a transfer between spouses that carries out the settlement in a dissolution (WAC 458-61A-203). A sale by either or both of you to an outside buyer is taxed as usual, even when the decree orders that sale.
Do we pay capital gains tax when we sell the house?
IRS Publication 523 explains the federal exclusion of up to $250,000 of gain, or $500,000 for a married couple filing jointly, and the rules for separated or divorced owners. How it applies to your sale, and how you file in the year of the divorce, is a question for a tax professional.
Will you work with just one of us?
I'll talk with either of you, but a sale of community property needs both signatures, so any offer I make goes to both owners in writing. I don't advise either of you on the divorce; that's your attorney's job.
Sources
- RCW 26.16.030, community property, and both spouses joining in the deed to sell community real propertychecked
- RCW 26.16.010, separate property of a spousechecked
- RCW 26.09.080, the court's just and equitable disposition of property and liabilitieschecked
- RCW 26.09.030, the 90 days after filing and service before the court proceedschecked
- RCW 26.09.060, temporary orders restraining the transfer or disposal of propertychecked
- WAC 458-61A-203, real estate excise tax on transfers between spouses and on sales in a dissolutionchecked
- IRS Publication 523, Selling Your Home (the exclusion; separated or divorced taxpayers)checked
- Washington Law Help, free legal information on divorce and a legal aid finderchecked
When you've both decided to sell, start with the address
Send it with whose names are on the deed. We'll walk the house as it is, send any offer in writing to both of you, and tell you plainly when a listing would leave you more. Jason Bryant is a licensed broker with Windermere Real Estate (license 101377).
It takes about a minute, there's no obligation, and your details are never sold.
or call Jason (425) 242-4673