Selling after the judgment

Read the judgment first

Before we talk price, I'll ask to see the part of the judgment that deals with the house. Not a summary. The actual pages. The section about the home might name a deadline, a way to set the list price, who chooses the agent, who pays the mortgage until closing and how the net proceeds are split, or it might say almost nothing.

I read it with you, then I ask you both to confirm with your attorneys that we're reading it the same way. Here's what I look for:

• A listing deadline or a date the house must be sold by
• How the list price is set, and who can agree to lower it
• Who pays the mortgage, taxes, insurance and utilities until closing
• How the net proceeds are divided, and whether anything comes off the top first
• Who signs what, and whether either of you was given authority to act alone

When the judgment is silent

Some judgments say the house will be sold and stop there. If yours leaves out a deadline or a pricing method, you can fill the gap with a written agreement between you, or you can go back to your attorneys. I'll give you both the same pricing analysis so there's one set of numbers to agree on. The answer on a judgment with no deadline covers this in more detail.

One thing changes at the judgment. The automatic restraint under ORS 107.093 ends there, but that doesn't free either of you to act alone, because the judgment's own terms take over and everyone on title still signs the deed. If you do agree on a gap, write it in a short document you both sign and send a copy to each attorney. A handshake about the list price feels fine in week one and much less fine in week six, when the house hasn't sold and you each remember the conversation differently.

The loan doesn't follow the decree

This trips people up. The judgment can say one of you is responsible for the mortgage, but the loan is a contract with the lender, and the lender wasn't a party to your divorce. A quitclaim deed changes who owns the house, and only a sale, a refinance or the lender's release takes a name off the loan.

So if the payment is late while the house is listed, it can land on both of your credit reports. Talk to your attorney about what the judgment lets you do if the payment stops.

Keep paying on time until the closing statement shows the loan paid in full, then keep a copy of that statement with the judgment, since it's your proof the old debt is gone.

Taxes after the marriage ends

Now that you're divorced, you'll likely each file on your own. IRS Publication 523 allows up to $250,000 of excluded gain per single filer who meets the ownership and use tests, and it lets you count the home as your residence while your former spouse is allowed to live there under a divorce or separation instrument and uses it as a main home. Divorce is also listed as an unforeseeable event that can qualify for a reduced exclusion.

Ask your CPA how those rules fit your dates. Bring the judgment.

And if one of you deeded your share to the other before the sale, ask about IRS Publication 504's rule for transfers incident to divorce, which means within 1 year after the marriage ends, or under the divorce instrument and within 6 years.

How the sale runs from here

Sometimes a request from one of you seems to conflict with the judgment, perhaps a price drop the other hasn't approved or a closing date past the deadline, and when that happens I don't pick a side. I stop. I tell you both in writing and suggest you each check with your attorney before we go on.

1. You each send me a copy of the property section of the judgment, or one of your attorneys sends it to both of us.
2. I put the terms that affect the sale on a single page and send it to both of you to confirm.
3. We list on the schedule the judgment sets, and I log every showing, piece of feedback and offer in a shared record.
4. At closing, I ask the title company to set separate signing times if you would rather not sit in the same room.
5. After closing, the after closing guide lists what to keep and who to tell.