Can the house be sold while the divorce is pending?
Yes, but not by one spouse alone. Once a petition is filed, the standard family law restraining orders printed on the summons (form FL-110) bar both spouses from transferring or selling property without the other's written consent or a court order (Family Code section 2040). In practice, a pending-case sale happens by written agreement of both spouses, usually through counsel, or by court order. The listing agreement and every offer acceptance should be signed by both owners on title.
How is the house divided if it is community property?
California divides community property equally unless the spouses agree otherwise (Family Code section 2550). Property acquired during marriage is presumed to be community property (Family Code section 760), but a home owned before marriage, or bought with one spouse's separate funds, can be partly separate. Separate property contributions may be reimbursed (Family Code section 2640), and a home owned before marriage can have a community share when mortgage principal was paid down with marital earnings, often called a Moore/Marsden calculation. Characterization is a legal question for counsel; we provide the market value the calculation depends on.
How is a buyout usually structured?
One spouse keeps the house and pays the other their share of the equity, usually equal to half of the current value minus the mortgage balance, adjusted for any reimbursement claims. The buying spouse typically refinances to remove the other spouse from the loan and to fund the payment, or offsets the equity against other assets such as retirement accounts. The other spouse then signs a deed transferring their interest. Settlement agreements often set a refinance deadline and say what happens if the refinance does not close, such as a listing date.
How do the spouses agree on the value of the house?
Common approaches are a jointly selected appraiser, a broker opinion of value from a neutral agent, or each side obtaining its own and averaging. A broker opinion is faster and less expensive, while a formal appraisal is usually preferred if the value is contested or may need to be defended in court. Our members provide comparative market analyses that either side or a mediator can review, and can recommend local appraisers.
Which deed is used to transfer one spouse's interest?
Usually an interspousal transfer deed. Transfers between spouses in connection with a divorce are generally excluded from property tax reassessment (Revenue and Taxation Code section 63) and exempt from documentary transfer tax (Revenue and Taxation Code section 11927), and an interspousal transfer deed states the reason for the exemption on its face. The deed is typically signed when the buyout closes or the judgment is entered, not before, so the transferring spouse is not giving up title before being paid or released from the loan.
What happens to the mortgage if one spouse keeps the house?
A deed changes ownership but does not change the loan. If both spouses signed the mortgage, both remain liable until it is refinanced or paid off, even after one spouse signs away their interest. That is why most settlements require a refinance, or a sale if the refinance cannot be completed by a set date. Lenders will want to see the settlement agreement or judgment, and support payments may count as income for the buying spouse.
Will either spouse owe capital gains tax?
Transfers between spouses incident to divorce are generally not taxable events (Internal Revenue Code section 1041). When the house is sold, each spouse can generally exclude up to $250,000 of gain on a main home they owned and lived in for two of the last five years (Internal Revenue Code section 121). A spouse who moved out can still be treated as using the home while the other spouse lives there under a divorce or separation instrument. Because the details matter, the spouses' accountants should review the timing.
What if one spouse is still living in the house during the sale?
That is common. We work out a showing schedule both parties can accept, keep communication in writing and copied to both sides or their counsel, and make sure the occupying spouse knows how to prepare the home. If the home needs repairs or staging, the cost and how it is shared should be agreed in writing first.
How does a neutral agent handle two parties who disagree?
Our members represent both owners as joint sellers, not one spouse. Every price decision, offer and counter goes to both parties at the same time, usually with their attorneys copied, and nothing is accepted without both signatures. When the parties cannot agree, we stop and let counsel or the mediator resolve it rather than push one side's position.
What if the spouses cannot agree on selling at all?
In the divorce case, the family court can order the house sold and decide how the proceeds are divided. Between co-owners who are not married, the usual remedy is a partition action in civil court (Code of Civil Procedure section 872.010 and following). Both take time and legal fees, which is why many parties settle on a listing plan, a price-reduction schedule and a deadline instead.
What does the listing agent handle, and what stays with the attorneys?
The agent handles valuation, preparing and marketing the home, showings, offers and escrow. The legal characterization of the property, the division of proceeds, support and the settlement terms stay with the attorneys and the court. Our members do not give legal or tax advice.
Is there a referral fee for attorneys, mediators or financial specialists?
No. In California, a real estate broker generally may not pay a referral fee to someone who is not licensed as a real estate broker or salesperson (Business and Professions Code section 10137), so we do not pay referral fees to attorneys, mediators or financial professionals.
How do I refer a client to the collective?
Send us the property location and where the case stands, and we match the parties with a member who works in that county and has handled divorce sales. With the parties' permission, we copy you on updates at listing, accepted offer and closing. Refer a client.
This page explains how these sales generally work in California. It is not legal or tax advice. Every estate and trust is different, so please confirm the details with the estate's attorney or certified public accountant.