Court-Ordered Home Sales in New Jersey Divorces What to Expect

In a court-ordered sale, a New Jersey judge directs that the marital home be sold, either as part of the final division of property or, when the circumstances justify it, before the divorce is final. Expect the order or your agreement to set the ground rules, the proceeds to be paid out or held the way the order says, and the house to be marketed like any other listing, because the equity is what both of you are dividing.

I'm Dennis Mark Interdonato with The Dennis Mark Group. A judge appointed me to list and sell a marital home in Monmouth County. That sale closed within five months of my appointment, and the judge and the family law attorneys on it refer clients to me now. Here's what a court-ordered sale looks like from the inside.

When can a New Jersey judge order the house sold?

At the end of the case. New Jersey law lets the court make awards to carry out an equitable distribution of property acquired during the marriage (N.J.S.A. 2A:34-23), weighing the factors in N.J.S.A. 2A:34-23.1. Selling the house and dividing what it nets is one way that can happen.

Before the end of the case. In Randazzo v. Randazzo, decided in 2005, the New Jersey Supreme Court held that a trial court has the equitable power to order the sale of marital property before a final judgment of divorce when the circumstances justify it. The Court said that in many cases the proceeds should be placed in escrow until final distribution, and that in other cases they may properly be used to pay marital obligations (opinion text).

What stays the same as a regular sale?

Almost everything buyers see. The house still needs the right price, real preparation, good photos and video, and full exposure, because buyers don't pay more for a house because a judge wants it sold. The first two weeks on the market still set the price. The contract still goes through New Jersey's three-day attorney review (N.J.A.C. 11:5-6.2). The town's certificate of smoke alarm compliance is still required before a one- or two-family home is sold (NJ Department of Community Affairs). And nothing in the marketing says why the home is for sale.

What's different about a court-ordered sale?

• The order sets the rules. Depending on how it's written, it can address who lists the home, how the price is set or changed, who signs, the deadlines, and what each spouse has to do to cooperate. Read it line by line with your attorney.
• Communication is formal. Both owners and both attorneys get the same updates at the same time, in writing, and where the court asks to be kept informed, it is.
• Neutral means neutral. As a Master CDRE®, I work for the sale, not for a side. No private calls, and no favors for whichever spouse is easier to reach.
• The money follows the order. Proceeds are paid out or held the way the order says, and in many cases that means escrow until final distribution.
• Possession works differently. New Jersey's joint possession law, the reason one spouse normally can't sell the main home alone, recognizes that a court order or judgment can end that right (N.J.S.A. 3B:28-3).

What happens before the house goes on the market?

1. The order gets read first. Nothing moves until everyone knows who signs, how the price is set, what the deadlines are and whether there are limits on access or contact. Your attorneys confirm it, and I build the plan around it.
2. A price that holds up. My recommendation comes from comparable sales and the condition of the house, in writing, so it stands up if either attorney or the judge asks how I got there. If the order calls for an appraisal, that's part of it. The price is never a lever between the two of you.
3. Paperwork starts early. The title search, any liens or judgments, and the town's certificates get started before the listing date, not after an offer.
4. Access planned around the order. Photos, showings and inspections are scheduled to fit whatever the order says about who can be at the house.

What should each spouse expect day to day?

• A showing schedule set in advance, with notice to whoever lives in the home
• Keeping the house clean and ready to show, plus access for photos, inspections and any appraisal
• Every offer sent to both owners and both attorneys at the same time, with a written summary checked against what the order requires
• Requests for signatures on a timeline, with a written record of when each one went out and came back
• Repairs and town certificates handled the way the order or the attorneys direct, with every inspection request and repair answer on the record

What did a court-appointed sale in Monmouth County teach me?

The two owners weren't allowed to speak to each other, and one of them worked to stall the sale all the way to the township's final inspection. I kept the process neutral, kept the court and both attorneys informed at every step, and got the home to the closing table within five months of my appointment. The way I see it: "Sometimes the wins don't come from the clients. They come from doing the right thing and getting it done, as appointed."

How does the money get paid out at closing?

Before closing, your attorneys tell the closing agent in writing how the net proceeds are to be paid out or held, the way the order or your agreement says. The mortgage and any home equity line are paid off from the sale. The seller pays New Jersey's realty transfer fee, and each owner completes a GIT/REP form so the deed can be recorded (NJ Division of Taxation). Taxes on the sale are a question for each spouse's tax professional.

Where are these cases heard in Monmouth and Ocean County?

Monmouth County divorce cases go through the Family Part at the Monmouth County Courthouse in Freehold. Ocean County cases go through the Ocean County Family Division at the Ocean County Justice Complex, 120 Hooper Avenue, Toms River (NJ Courts directory). In a contested case, the Early Settlement Panel, and economic mediation if the court orders it, come before a judge decides anything (NJ Courts). If you're not at the court-order stage yet, read what happens when one spouse won't sell the house.

Frequently Asked Questions

Who picks the agent in a court-ordered sale?

It depends on the order or your agreement. Sometimes the spouses agree on an agent, and sometimes the judge appoints one, which is how I came to the Monmouth County sale.

Will the house sell for less because a court ordered it?

It shouldn't. Buyers don't see the court order. They see a house, a price and its condition, which is why the marketing never says why the home is for sale. Price comes from the market, starting with a neutral value and recent sales. What buyers do worry about is delay and missing signatures, which is why the paperwork and the schedule are organized before the first showing. Read how the marital home is valued in a divorce.

What happens if one spouse refuses to cooperate?

The attorneys can bring it back to the judge. A clean written record of every request and every response helps them do it.

Where does the money go at closing?

Where the order or your agreement says. Before closing, the attorneys give the closing agent written instructions to pay out or hold the net proceeds.

This is general information, not legal, tax or lending advice. Your attorney, mediator, tax professional or lender has the final word on your own 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. He's a former New Jersey home builder and residential remodeler. See how he handles home sales during a divorce.

Keep reading

• The Divorce Guide
• See what your home could be worth
• How to sell a house during a divorce in New Jersey, step by step
• Have a question this didn't answer? Send it to Dennis Mark.