Selling the house in an Oregon divorce

Decide to sell

Before anyone calls an agent, the two of you need to settle one question: does the house get sold, or does one of you keep it? Keeping it means a buyout, and a buyout turns on whether the person keeping it can qualify for a loan alone, which is a question for a lender rather than for me.

When an Oregon court divides property in a divorce, it divides it "as may be just and proper in all the circumstances," starting from a rebuttable presumption that both spouses contributed equally to property acquired during the marriage (ORS 107.105). How that applies to your house is your attorney's call. What I can give you is numbers.

The keep or sell tool puts the two paths side by side, and the path finder sorts out where your case stands. Each of you can run them alone.

Put the plan in writing

A sale holds together when the big decisions are written down before the sign goes in the yard. Get it signed. A loose verbal understanding tends to come apart at the first offer, when real money is on the table and each of you remembers the conversation a little differently.

Your attorneys or mediator can turn these points into a signed agreement or a stipulated order, and I work from whatever that document says:

• That the house will be sold, and about when you want it listed.
• How the list price gets set, and when it drops if no acceptable offer comes in.
• Who pays the mortgage, taxes, insurance and utilities until closing.
• Who lives there during the sale, if anyone, and how showings get scheduled.
• Who signs what, and where the money goes on closing day.

Protect the house while the case is open

Until closing day, the house is an asset you still share, and its value is the number you'll both be dividing. A missed mortgage payment, a lapsed insurance policy or a roof leak nobody fixes takes money out of both of your pockets. Keep it insured and keep it paid.

If you can't agree on who pays or who stays there, the court can issue temporary orders under ORS 107.095 covering the use and possession of property and who pays the liens while the case is pending. In Lane County, Supplementary Local Rule 8.042 sets out how a motion for exclusive use of the family home works. Your attorney will know whether either is worth asking for.

Agree on a price

I price a house from comparable sales: homes near yours, close in size and condition, that actually closed recently. You both get the same comparative market analysis, with the same comps, on the same day. Nobody gets an early look.

If either of you wants a number that didn't come from the listing agent, a licensed appraiser can provide one, and you can agree ahead of time that the appraisal sets the list price. I'm not an appraiser, and a CMA isn't an appraisal.

Agree on reduction triggers before you list, too. If there's no acceptable offer by a date you pick, the price drops by an amount you pick, and nobody has to reopen the argument after the house has been sitting.

Get it ready

Some houses need a weekend of cleaning. Others need paint, a new water heater or a contractor for a month. Whatever the list turns out to be, write down who does each job, who pays for it, and whether that money comes back to them out of the proceeds at closing.

If one of you has already moved out, the empty rooms and the utilities need their own plan, and the guide to preparing the house after one of you moves out covers it. For the bigger question of fixing things or selling as is, see should we stage the house or sell as is.

List it and show it

Oregon requires me to give you the initial agency disclosure pamphlet at first contact (ORS 696.820). It explains who I represent. When I list your house, I represent the sellers, which means both of you, and under ORS 696.805 I owe each of you care, loyalty, accounting and timely disclosure of any conflict.

I work from both owners' written agreement or from a court order, never from one spouse's say-so. Showings are booked through me with notice to whoever lives there, and every bit of showing feedback goes to both of you in the same email, word for word.

Read every offer together

A seller's agent must present written offers in a timely way (ORS 696.805). Each offer reaches both of you at the same moment, with the same summary from me: price, financing, contingencies, closing date and anything the buyer is asking you to pay. I don't tell one of you first.

Accepting, countering or turning down an offer takes both of you. If you aren't speaking, each of you can answer in writing, or your attorneys can confirm for you. Settle in advance how quickly you'll each respond, because buyers put deadlines in their offers and the clock runs whether or not you've talked.

Close and pay out the proceeds

At closing, everyone on title signs the deed. The buyer's money pays off the mortgage and any other liens, the costs of sale come out, and the rest is paid as your signed instructions or court order direct. An Oregon court considers reasonable costs of sale and taxes when it divides property, which is one more reason to keep good records of them.

A sale also ends the joint mortgage, something a quitclaim deed never does on its own, because the loan is a contract with the lender. On taxes, a married couple filing jointly can exclude up to $500,000 of gain on a main home, or a single filer up to $250,000, if they meet the ownership and use tests in IRS Publication 523. Whether you qualify is a question for your CPA. Ask early.