You and your spouse have decided to file a divorce.  You own a home and now need to decide who keeps the home, or how to divide the home.   It’s not as simple as you keep the kitchen, and front porch, and your spouse keeps the garage and backyard.  The courts will need to either divide the value of the home, or allow one spouse to keep the home.

Nevada is a community property state.  Community property is defined as any asset, or debt, acquired during the marriage.  Typical community property is a house, vehicles, bank accounts, and investments.   Community property is divided evenly by the court unless there is a compelling reason to divide other than equally. 

If the home was purchased during the marriage, and the house has equity, then the court will want to divide the equity evenly.    A house is not always an asset.  If there is equity in the home (the difference between the mortgage owed, and the value)  then it is an asset.  If there is no equity, a home is actually looked as a debt by the court.  The simplest way to divide the equity in a home is to sell the home and split the proceeds.   

If one spouse wants to keep the home, then they will need to refinance the home, so they can buy-out their spouse’s half of the equity.    Sometimes, instead of refinancing we might recommend giving the spouse a larger share of a 401K, or IRA, or other assets. 

What if the home was purchased before the marriage?

If the home was purchased prior to the marriage, then the home may be separate property, and not divided with the divorce.   Several important issues exist around a separate property home.   First, was the home paid off before you got married.   If not, then money paid towards the mortgage while married muddies the waters a little.  The house may now have part of the equity that is considered separate property, and part of the equity that is considered community property.   In Nevada, this is called a “Malmquist Issue” and the courts have created a Malmquist Formula to figure out how much is community and how much is separate.  

Does it matter who’s name is on the title, or the mortgage?

In deciding whether the equity is community property or separate, it doesn’t matter whose name is on the title or mortgage.    It is quite common for only one spouse, who has good credit, and to be on the title, and the mortgage.   Some mortgage lenders have the other spouse sign a quit claim deed.   Signing a quit claim deed doesn’t mean you’ve given up your interest in the home.   Signing a quit claim deed doesn’t always affect the community property label of the equity in the home. 

What if I want to keep the home?

If there is equity in the home, you will need to buy-out your spouse’s half.   If there isn’t any equity, the court will let you keep the house, as long as you keep up the mortgage.   The alternative is to have the home sold, for a loss, and this loss becomes a debt you and your spouse will need to cover.  This is called a short-sell and requires a mortgage company approval.  The approval process is lengthy, and the courts may not wait for a mortgage company decision. 

How do we value the home?

If you are choosing to stay in the home, you will need to buy-out your spouse’s half of the equity.  Equity is the difference between the mortgage, or mortgages, and the market value of the home.  Market value is often a figure that needs to be decided by the court. There are several ways to decide value.   A spouse may present a valuation from Zillow.   This is a website that posts general values of homes.  This amount can be challenged with a broker’s opinion.  A broker’s opinion is an estimate provided by a professional realtor.   The valuation the courts provide the highest deference to is a home appraisal.   Home appraisals can range in cost between $900 and $1500 and consider the current market, and construction costs. 

About the Author.   Right Lawyers is a law firm located in Las Vegas, NV that practices exclusively in divorce and custody law.    For over 15 years the divorce attorneys at Right Lawyers have helped thousands of those needing help with uncontested divorces, legal separations, and contested divorce cases.   To reach Right Lawyers visit their website at or call them at (702) 914-0400.