Can I Stay in the House Until It Sells? Questions to Ask Your New Jersey Divorce Attorney

Whether you can stay in the house until it sells is a legal question for your attorney, and the answer depends on your agreement, any court order and your own circumstances. What I can give you is the list of questions worth asking before you decide, and how a sale works when one of you is still living there.

I'm Dennis Mark Interdonato with The Dennis Mark Group at Keller Williams Realty Ocean Living, and I'm a Master CDRE®, trained for home sales during a divorce. I'm not an attorney, and nothing here is legal advice. But "can I stay?" shapes the whole sale, from the showing schedule to the closing date.

Why is this a question for your attorney and not your realtor?

Because where you live during the case can touch support, the division of property, taxes and who pays which bills.

Moving out has paperwork consequences too. The instructions to the court's Case Information Statement say that if you move out and get your own apartment, you should file an amended statement showing your new rent and living expenses. That's the kind of detail your attorney will want to know about before you pack, not after.

What should I ask my attorney before I decide?

About living there

• Does our agreement, or any court order, say who lives in the home until it sells?
• If I move out, does that change anything in my case?
• If I stay, am I expected to keep the home show-ready and allow showings? What happens if I don't?

About money

• Who pays the mortgage, property taxes, insurance and utilities until closing?
• Will those payments be credited to whoever made them when the sale closes?
• What happens if a payment is missed? The CFPB notes that a divorce decree can assign a debt to one spouse, but "a creditor can still collect from anyone whose name appears as a borrower."

About taxes

• If I move out, can I still treat the home as my residence for the capital gains exclusion? IRS Publication 523 says a separated or divorced owner can treat the home as a residence while a spouse or former spouse is allowed to live there under a divorce or separation instrument and uses it as a main home. Ask your tax professional how that applies to your dates.

About the sale

• Who approves the list price, price changes and offers?
• Is there a deadline to list or to close?
• If neither of us lives there, what does our homeowners policy require? The New Jersey Department of Banking and Insurance's summary of homeowners policies lists losses when a house is vacant for the number of days your policy specifies among the common exclusions.

How does a sale work when one of you still lives there?

It works fine, as long as the rules are written down before the home goes live. The showing plan both owners sign covers how much notice the person living there gets, who keeps the home ready, where they go during showings and how the keys are handled. Every update and every offer goes to both owners at the same time, so staying in the house never means knowing more, or less, than the other owner.

Living there doesn't give you more say in the sale. The price, any price change and every offer still need both owners, or whatever authority your agreement or a court order sets. If an order says who lives in the home, sometimes called exclusive possession, the showing plan follows it exactly as written, including whether the other spouse can come to the property at all.

The person living there has a real effect on the price. A home that's clean, staged and ready to show on short notice gets the full attention of the first wave of buyers. A home that's hard to get into loses them. That's why I talk about it openly at the start. For the privacy side, read showings and privacy when you're separated.

The photographer, the inspector and the appraiser get booked through me, with the time sent to both owners. If access breaks down anyway, with showings canceled, the locks changed or the photographer turned away, I don't argue about it. I write down what was scheduled and what happened, send the same note to both owners, and give it to your attorneys. What happens next is up to them, and if needed, the court.

What happens on closing day if I'm still living there?

The contract sets when the buyer gets the home. Plan your move to that date, and talk to your attorney early about where you're going and how the move is paid for. If timing is tight, tell me before we accept an offer, because the closing date is one of the terms we negotiate. For the full sequence, see how long a divorce home sale takes in New Jersey.

What if I want to keep the house instead?

Then you'll need a value both sides accept, and usually a refinance into your name, because the decree alone doesn't take the other spouse off the mortgage. Start with a neutral number from the home valuation tool, and talk to a lender early. If there isn't much equity, read selling a divorce home with little or no equity before you decide.

Frequently Asked Questions

Can my spouse make me leave the house before it sells?

That's a question for your attorney. The answer depends on your agreement, any court order and the facts of your case. I don't decide who lives in the home, and I build the showing plan around whatever your attorneys or the court decide.

Does the spouse living in the house control the sale?

No. Living there doesn't change who decides. The price, price changes and offers still need both owners, or the authority your agreement or a court order sets. Ask your attorney what yours says.

Do I have to let buyers in for showings?

Ask your attorney what your agreement or any order says about cooperating with the sale. In practice, a showing plan both owners sign before listing settles most of it ahead of time.

Who pays the mortgage while the house is for sale?

Your agreement, your attorneys or the court decide that. Whatever they decide, the lender can still collect from anyone named as a borrower, so keep the payments current.

Will moving out hurt my capital gains exclusion?

Not necessarily. IRS Publication 523 has a rule for a spouse or former spouse who is allowed to live in the home under a divorce or separation instrument. Ask your tax professional how it applies to you.

This is general information, not legal, tax or lending advice. Your attorney and tax professional have the final word on your situation.

About the author

Dennis Mark Interdonato is a REALTOR® and Master CDRE® who leads The Dennis Mark Group at Keller Williams Realty Ocean Living in Point Pleasant, NJ, helping buyers and sellers throughout New Jersey make their next move, with Monmouth and Ocean County as home base. Read more about Dennis Mark.

Keep reading

• The divorce home sale guide
• How Dennis Mark handles a divorce home sale
• What divorce attorneys and mediators want from your realtor
• Have a question this didn't answer? Send it to Dennis Mark.