House sale on divorce and other options

Person with rucksack sitting at a fork in the road in the landscape

A separation becomes a reality for more than a third of all marriages in Germany at some point. The sale of a house during a divorce is a particular source of potential conflict. It poses both emotional and financial problems.

In this critical phase of life, a constructive look at the overall situation helps to make the right decisions for the future and set a new course. Joint home ownership also plays an important role in the considerations that arise. The question arises almost automatically: Is our shared home lost in a divorce?

We have put together some interesting facts and alternatives for you.

Table of contents

A divorce is pending: What happens to the house?
Selling a property on divorce: Reasons at a glance
The right time to sell your home in the event of a divorce
How to sell a house successfully and master the separation
Isar Estate - Your contact for a divorce involving real estate
FAQ on selling a house in the event of divorce

A divorce is pending: What happens to the house?

While the division of financial assets and investments in securities is easy to accomplish in the event of a divorce, a house or apartment, unlike financial assets, cannot be divided so easily. Especially if the statutory matrimonial property regime of community of accrued gains applies, the situation is much more complicated. In this case, the house legally belongs to both spouses jointly - regardless of who is listed in the land register or financed the purchase.

In the event of a divorce, the equalization of the value of the house must therefore be settled fairly, which entails complex asset and valuation issues. Spouses must agree on what should happen to the house or condominium. It also plays a role whether the house is sold before or after the divorce - especially in the case of accrued gains.

The following options can be considered for a shared home if you are at a loss in the event of a separation.

Partition auction: The worst solution

A partition auction is held if both spouses are unable to reach an agreement regarding the sale of the house on divorce. In this case, both parties can apply to the local district court for a partition auction of the divorce property. The house is then auctioned off publicly by the enforcement court and the highest bidder wins the auction. This usually results in a significantly lower sale price than a sale by mutual agreement. There are also court costs and the costs of the expert.

Real division: Two separate residential units

A division of a house in the course of divorce is always possible if there are several residential units. Each spouse is awarded sole ownership of certain areas of the home, so that the property is divided. The parties can dispose of the respective residential unit as sole owners and decide independently whether to live in the home themselves, sell it or rent it out. This separation means that it is no longer necessary to sell the house, but the architectural and structural conditions must be right for a real division.

Transfer of ownership: One spouse is paid out

If a shared house is not sold in the event of a separation, but transferred to one of the spouses, the person moving out must be paid out. For this purpose, the current market value of the divorced property is determined in advance, whereby the financing bank must also play its part in the case of an existing real estate loan. Only with their consent can a spouse be released from joint and several liability. Ideally, the property should be transferred before the divorce date. This saves the acquiring party from having to pay real estate transfer tax.

Gift of the house to the children

The transfer of ownership can also take the form of a gift to the joint children. However, if they are under the age of 18, the guardianship court must usually give its approval. If you opt for this option instead of selling the house in the event of a divorce, all rights and obligations relating to the property will be transferred to the child. Therefore, always consider the interests of the child or children and inform them of any obligations. Then a shared house can remain in the family in the event of a separation and serve future generations.

Permanent rental of the entire house

There is also the option of renting out the property instead of selling the house during the divorce. This is particularly interesting if it does not make economic sense to sell the house during the divorce. The basic prerequisite is that both partners agree to the terms agreed in the rental contract. Rental income and costs incurred are divided equally. If you are considering this solution, you should bear in mind that joint decisions will still have to be made, which is why you should get on well with your ex-partner.

Amicable sale of the property

Conflicts during the divorce often lead to a house sale in the end. Both spouses then part with the shared property. On the one hand, economic considerations play an important role here, on the other hand, many people want to start their new phase of life without any old burdens. They see the amicable sale of the joint home as the best solution. After the successful sale, the proceeds from the sale are divided equally between the two ex-partners, depending on the respective ownership shares in the house. Any existing loans must be repaid in full beforehand.

Modern living room of a luxury villa with open kitchen

Selling a property on divorce: Reasons at a glance

In many cases, selling a divorced property by mutual agreement is the only feasible solution. The main reasons for this are:

Desire to break up the marital union and draw a line under it
Financial aspects
After the divorce, the house used is too big for one partner alone

In order to make a sensible decision for or against selling your house in Munich in the event of your divorce, you should first determine the value of your property. As an experienced real estate agent, our team at Isar Estate will be happy to provide you with a precise property valuation in person.

The right time to sell your home in the event of a divorce

According to German law, a legally binding divorce requires a separation phase of one year. During this phase, the couple must live apart from bed and board.

In some cases, the spouses already agree during the year of separation that a house sale on divorce makes sense and that the restoration of the marital partnership is ruled out. In this case, there are a number of arguments as to why the house sale should take place during the year of separation - especially in the case of a gain.

Reasons for selling a house in the year of separation

Management costs are saved.
In the year of separation, joint tax assessment is generally still possible - with more favorable tax rates than with individual assessment.
If one of the spouses takes over the house, a transfer between spouses can also take place tax-free in the year of separation.
The proceeds from the sale of the house can be used for the divorce costs.
Both parties are able to steer their lives in new directions more quickly.

However, for an early sale of the house during the year of separation, both spouses must agree to the sale at an early stage. As an estate agent, we generally recommend that you sell before financial pressure forces you to do so and avoid selling by means of a partition auction. Both parties lose a lot of money in this case!

Tip

For an initial rough estimate of the market value of your property, you are welcome to use our free online valuation tool:

Start online evaluation

For a precise assessment, we are at your disposal personally.

Consultation with two women and a businessman

How to sell a house successfully and master the separation

During the house sale in the event of a divorce, it is particularly important that you as a married couple can pull together as much as possible to successfully sell your joint property. Prospective buyers should not get the feeling that you have to make a distress sale. This would most likely lead to price reductions.

As experienced and empathetic real estate specialists, we will advise you comprehensively on the various options for a divorce property and support you in finding a basis for coming to an amicable decision about the future. If you are selling a property in Munich, we will do everything we can to make the process as simple and profitable as possible for you.

Twelve tips for a successful property sale

Would you like to know the value of your divorced property or do you need more information about selling a house on divorce? We will listen to you carefully and support you in sorting out your needs and ideas.

In our brochure 12 tips for property sellers we have compiled important information for you about selling your home in the event of a separation. You will receive an e-mail from us immediately after registering to download the document with the 12 tips.

Black and white portrait of Christian Dürr, founder of Isar Estate.

Isar Estate - Your contact for a divorce involving real estate

The sale of a property is very often associated with emotions. If a divorce is the reason for selling an apartment or house, this is especially true. As an experienced real estate agent in Munich, we therefore support you sensitively and professionally to find the optimal solution.

Dipl.-Kfm. Christian Dürr
Founder Isar Estate

Find out more about our team

FAQ on selling a house in the event of divorce

Who is allowed to sell the shared house in the event of a divorce?

In principle, only both spouses may jointly decide on the sale if they are jointly registered as owners in the land register. This means that one party alone cannot sell the house without the consent of the other, whether before or after the divorce. However, if the divorce has been finalized and one partner applies for a partition auction, there is a risk of considerable financial losses. The sale can also be enforced by the courts, which is often lengthy and emotionally stressful.

We always harmonize our strategy proposal for you with your individual needs, because we know how sensitive issues such as divorce, inheritance or selling for reasons of age can be. Our aim at Isar Estate is to provide you with the best possible support in a difficult phase of your life.

What happens to the proceeds after the house sale in the event of a divorce?

If the house was sold jointly, half of the proceeds usually go to both parties - unless other contractual arrangements have been made. This may be the case with a marriage contract or separation of property. Debts, land charges and incidental sales costs are deducted beforehand. Our estate agents will provide you with a transparent cost breakdown and clarify the realistic net proceeds to be expected. In this way, misunderstandings can be avoided, which contributes to an agreement and prevents disputes.

What if one spouse wants to stay in the house?

In some cases, selling the house on divorce is not the best solution because one party wants to take over the property. In this case, he/she can buy the other party's share. The prerequisite is an agreement on the value of the property and viable financing. Without an agreement, the only option is often to sell the property to a third party. We offer you an independent valuation report that creates a fair basis for negotiations. Our estate agents will also advise you on alternatives and, if desired, act as an intermediary

What happens if there is no agreement on the shared home in the event of a separation?

If the spouses are unable to agree on a sale or takeover, the only option is often a partition auction by the court. However, this usually entails financial losses and a high emotional burden. As estate agents, we do our best to defuse conflicts at an early stage and mediate between the parties. Professional sales strategies also ensure that the sale of a house on divorce is successful without lengthy court proceedings.

Disclaimer

Despite careful research and checking of the sources, the author assumes no liability for the accuracy and completeness of the information presented. In case of unclear legal and tax questions, it is advisable to consult a lawyer and/or tax advisor for clarification.

Author: Dipl.-Kfm. Christian Dürr