What happens to the house in a Colorado Springs divorce?

In a Colorado divorce, the house is usually sold, kept by one spouse who buys out the other, or kept jointly for a set time, and the decision is made by agreement or by the court. Once a divorce is filed and served, Colorado automatically bars both spouses from selling or borrowing against marital property without the other's consent or a court order. Both spouses usually sign every document, and both stay on the mortgage until it's paid off or refinanced. Talk with your attorney before you list.

The three usual outcomes

• Sell the home and divide the proceeds. This is often the cleanest break, but it requires both spouses to agree on the timing, the price, and how the money is split.
• One spouse keeps the home and buys out the other. That usually means refinancing into one name and qualifying on one income. Whether one spouse can keep the house covers how a buyout works.
• Keep it jointly for a while. Some couples agree to hold the home until a set date or event, then sell. That keeps both spouses tied to the mortgage and the property, so the terms need to be in writing.

How the value is divided is decided by the divorce, not by the real estate. Colorado divides marital property in a way the court considers fair, which isn't always 50/50. A home bought before the marriage may be partly separate property, while the increase in value during the marriage is often marital. Whose name is on the deed doesn't settle it on its own. Those are questions for your attorney.

The automatic court order on marital property

This is the trap many people don't know about. In Colorado, once the divorce petition is filed and the other spouse is served (or accepts service), an automatic temporary injunction applies to both spouses until the final decree. It bars each of you from transferring, borrowing against, hiding, or otherwise disposing of marital property without the other's written consent or a court order, apart from the usual course of business and the necessities of life.

For the house, that generally means listing it, signing a contract, or taking out a loan against it needs both spouses' agreement or the court's approval. Get that agreement in writing through your attorneys before the home goes on the market.

The mortgage doesn't follow the divorce decree

A divorce decree tells the two of you who's responsible for the mortgage. It doesn't bind the lender. If both names are on the loan, both of you stay liable until it's paid off at a sale, refinanced into one name, or, for some loans, assumed with the lender's approval.

A quitclaim deed changes who owns the home, but not who owes the loan. Signing your interest over without being released from the mortgage can leave you responsible for a home you no longer own.

While the home is listed, decide who pays the mortgage, taxes, insurance, HOA dues, utilities, and repairs. A late payment hurts both spouses' credit. Courts often address these costs in temporary orders.

Selling before or after the divorce is final

There's no single right answer, and your attorney and CPA should weigh in. Things to consider:

• The capital gains exclusion. Married couples filing jointly can generally exclude up to $500,000 of gain on a main home; single filers, up to $250,000. If the sale happens after you're divorced, each spouse is generally looking at the $250,000 limit on their share. A spouse who moved out can still count the time the other spouse lives in the home under the divorce decree or separation agreement. How capital gains work when you sell a Colorado Springs home explains the basics.
• Transfers between spouses. A transfer of the home from one spouse to the other as part of the divorce generally isn't taxed, but the receiving spouse takes on the original purchase price for tax purposes, which matters when they sell later.
• Timing and housing. If you've already separated, someone needs interim housing, and the costs of two households add up. If you're still under one roof, a sale can speed up the separation. Both affect when a sale makes sense.
• Waiting on the court. If you can't agree, the sale may wait on a court order, which can take time. A clear written agreement usually moves faster.
• Proceeds held until the decree. It's common for sale proceeds to be held by the title company or in an attorney's trust account until the decree or a written agreement says how to divide them.

Selling a house when two people have to agree on everything

A divorce sale works like any other sale, with one big difference: both spouses usually have to sign the listing agreement, the seller's disclosure, every offer, and the closing documents. If one person won't agree, the sale stalls.

Some practical points:

• Agree on the price method up front. Many couples use a neutral appraisal or agree in advance on how the list price and any reductions will be set, so neither feels the price was steered.
• Agree on how offers are handled. Decide in advance how you'll respond to offers and how quickly, so an offer doesn't expire while you disagree.
• Condition and showings. If one spouse is still living in the home, that person largely controls how it looks and when it can be shown. Agree on showing access and preparation in writing.
• Disclosures. Both spouses should review the seller's disclosure, since both are signing it.

How I approach a listing when both spouses are selling

Open communication with both of you. Both of you will sign the paperwork, and your signatures mean you agree with it, so both of you need the same information at the same time.

The first conversation is as much an interview as anything: can we work together as a partnership? We agree on the plan up front, and that's how we move forward. If I get the sense that I won't be able to serve you both well, I'll tell you that honestly, because this has to be a working relationship on all sides.

If there's conflict or a safety concern, tell your attorney and your agent so communication can be set up separately and in writing.

What's specific to a divorce in Colorado Springs

• The court. Divorces in Colorado Springs are handled by the 4th Judicial District Court for El Paso County, which can enter temporary orders on the house and its costs while the case is open.
• Help if you don't have an attorney. The Self-Help Center in the El Paso County Judicial Building has family court facilitators who can explain divorce procedures and forms. They can't give legal advice, so for decisions about the house, an attorney is still worth talking to.
• Military families. Many Colorado Springs homes were bought with VA loans. If one spouse keeps the home, how the loan is handled can affect the veteran's VA entitlement for a future purchase, so bring the loan details to your lender and attorney early.
• Recording the transfer. If the home is transferred from one spouse to the other, the deed is recorded with the El Paso County Clerk and Recorder. A title company or attorney can prepare it correctly.

How to decide

• If you both agree the home should be sold, put the plan in writing through your attorneys, including price method, who pays costs while it's listed, and how the proceeds will be held and divided.
• If one of you wants to keep it, get a lender's opinion early on whether that person can refinance alone.
• If you can't agree, let your attorneys or a mediator work it out first. Listing before there's an agreement usually causes more problems than it solves.
• If taxes could be significant, ask a CPA whether selling before or after the decree changes what each of you owes.

What could change the answer

• Whether you and your spouse agree on selling, keeping, or buying out.
• How the court or your settlement divides the home and its costs.
• Whether one spouse can qualify to refinance alone.
• The tax picture, including your gain and whether you sell before or after the decree.
• The type of loan, especially a VA loan.

When to talk with a professional

Talk with a family law attorney before you list, sign anything, or move money, especially once the case is filed. Talk with a CPA about the capital gains exclusion and the timing of the sale. Talk with a lender about refinancing if one spouse wants to keep the home. A mediator can help if you're stuck on the plan. And bring in a real estate professional who will communicate openly with both of you once you have an agreement in place.

Sources

• C.R.S. § 14-10-107 (automatic temporary injunction): https://colorado.public.law/statutes/crs_14-10-107
• Colorado Judicial Branch, Summons for Dissolution of Marriage, JDF 1102 (includes the temporary injunction): https://www.coloradojudicial.gov/sites/default/files/2023-07/JDF1102.pdf
• C.R.S. § 14-10-113 (disposition of property): https://colorado.public.law/statutes/crs_14-10-113
• IRS Publication 523, Selling Your Home: https://www.irs.gov/publications/p523
• 26 U.S.C. § 121(d)(3), property of a spouse or former spouse: https://www.law.cornell.edu/uscode/text/26/121
• 26 U.S.C. § 1041, transfers between spouses or incident to divorce: https://www.law.cornell.edu/uscode/text/26/1041
• Colorado Judicial Branch, El Paso County Self-Help Center: https://www.coloradojudicial.gov/courts/trial-courts/el-paso-county/self-help-center