Both parties agree to sell. Proceeds are split per the divorce settlement — typically 50/50 in community property states, equitably in others. Cleanest outcome. Can be a traditional MLS sale or a cash sale to an investor depending on timeline and property condition.
One spouse refinances into their name alone and pays the other their equity share. Requires the buying spouse to qualify for the new loan solo. If they can't qualify, this option falls apart.
Both parties keep the house — usually rented out — until kids finish school or market conditions improve. Requires ongoing cooperation. Can work but creates ongoing entanglement.
Contested divorces create timeline pressure. Court deadlines, financial pressure, and the desire to finalize the settlement quickly push many divorcing couples toward cash sales even at a discount. Certainty and speed have real value when the alternative is months of legal delay.
Divorce attorneys are one of the best referral sources for distressed property leads. Both parties want to close, they want to close fast, and they'll often accept below market to get it done. Build relationships with family law attorneys who understand that you close quickly and without hassle.
Dan White is a licensed Virginia real estate agent at Pearson Smith Realty and founder of FreeDealCalc.com. He has been investing in real estate for 20+ years.