Is a home bought during marriage automatically community property?
Generally, yes. Property acquired during marriage while living in California is presumed to be community property (Family Code section 760), regardless of whose income paid for it. Property owned before marriage, or received by gift or inheritance, is separate property (Family Code section 770). How the couple takes title, and whether separate funds go into the purchase, can affect the result, so these are worth deciding with counsel before escrow closes.
What are the common ways a married couple can hold title in California?
The main choices are community property, community property with right of survivorship (Civil Code section 682.1), joint tenancy, and tenancy in common. Many couples also take title in their living trust. Community property with right of survivorship lets the home pass to the surviving spouse without probate and can allow a full step-up in tax basis at the first death. Title choices have estate planning and tax consequences, so we encourage clients to confirm with their attorney before signing escrow instructions; the title officer will ask.
What if one spouse uses separate money for the down payment?
California law generally allows the contributing spouse to be reimbursed for traceable separate property contributions to community property if the marriage ends, without interest or appreciation, unless they waived it in writing (Family Code section 2640). Changing property from separate to community, or the reverse, requires a written, express declaration (Family Code section 852). Clients making a large separate contribution often document it with their attorney, sometimes in a prenuptial or postnuptial agreement.
What happens to a home one spouse owned before the wedding?
It stays that spouse's separate property, but if mortgage principal is paid down with earnings during the marriage, the community may acquire a share of the equity, often calculated using the Moore/Marsden approach. Adding the other spouse to title is a significant step that may change the property's character, so it is usually done deliberately with counsel. Transfers between spouses are generally excluded from property tax reassessment (Revenue and Taxation Code section 63).
Can wedding gifts or family money be used for the down payment?
Yes. Lenders allow gift funds for most loan types but require documentation, usually a signed gift letter stating the money does not have to be repaid, and a record of the transfer into the buyer's account. Cash gifts that cannot be traced are harder to use, so we suggest clients deposit gifts early and keep the paper trail. Large gifts may have gift tax reporting implications for the giver, which is a question for their accountant.
Should both spouses be on the mortgage?
Not necessarily. Applying together lets the lender count both incomes, but also both credit histories and debts. If one spouse has much lower credit scores or significant debt, a loan in one name may get better terms, while both can still be on title. A lender can run both scenarios. Being off the loan does not by itself make the home separate property.
How does a name change affect the purchase?
The name on the loan, title and identification needs to match. If one spouse has recently changed their name, or plans to, the lender and title company will ask for documents showing both names, and it is simplest to settle on one name before escrow opens. A name change after closing does not require a new deed.
Should the couple sell the homes they each own, or keep one as a rental?
Both are common. Each spouse can generally exclude up to $250,000 of gain on a home they owned and lived in for two of the last five years, and a married couple filing jointly can exclude up to $500,000 when both meet the use test (Internal Revenue Code section 121). Keeping a home as a rental preserves its property tax base and loan, but brings landlord duties and can affect the exclusion later. We can provide sale and rental estimates for the client's advisor to compare.
How do our members help a couple with different priorities?
Newly married buyers often have different commutes, budgets and must-haves. We start with a short planning session to agree on areas, price range and tradeoffs, and coordinate with the couple's lender and advisor so the search matches the budget they have both agreed to.
What does the agent handle, and what stays with the attorney and advisor?
The agent handles the search, negotiation, inspections and escrow. Title choices, prenuptial or postnuptial terms, estate planning and tax decisions stay with the couple's attorney, accountant and advisor. Our members do not give legal, tax or investment advice.
Is there a referral fee for advisors or attorneys?
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 advisors, attorneys or accountants.
How do I refer a client to the collective?
Send us where the couple wants to live and their timing, and we match them with a member who works in that county. With the clients' permission, we keep you updated so title and financing decisions are made before 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.