Divorce will complicate even the most simple real estate transactions. For Buyers the analysis is generally going to be straightforward. If there are two buyers trying to purchase property, and those Buyers get divorced, most of the time the parties will not wish to continue purchasing a property together as joint Buyers. The Buyers will generally agree to terminate the transaction and the agency relationship. If the Buyers haven’t had an offer accepted on property yet, it’s a simple modification or termination of the agency agreement. Occasionally one of the Buyers will wish to stay in the agency relationship or continue to purchase the property by themselves. On the other hand, you may have a situation where the Buyers are under contract to purchase when the divorce happen. The Buyers can either both agree to let the contract die or one Buyer may wish to continue with the purchase alone. If that is the case, the contract would be revised to reflect the change in Buyer [assuming Seller approves of the change], and the loan may need to be modified.
When Sellers divorce, the transaction gets a little more complicated. The divorce will have a decree or order that establishes the breakdown of the property. In some cases the property will be wholly transferred to one of the parties [e.g. Wife receives Property at 123 Main St., Husband receives $400,000 from liquid assets]. If that is the case, the parties will typically need to modify the Listing Agent-Client representation agreements to reflect the removal of the non-owner party. When a single divorcee owns the property outright, they are the only signatory required to sell the property.
In other cases, the court may not wholly transfer the property and the parties will remain part-owners of the property, and the divorce decree will order the parties to sell the property and split the proceeds. The agent can continue to represent the parties in this instance without modifying the agency relationship documents. In these cases where the divorce does not transfer property wholly to one party, there is a regular complication where one of the divorcees refuses to sign documents; e.g. ex-Husband refuses to help sell the house now that the divorce is final. The solution in this instance is frequently for the other party to bring the ex-spouse to court and get a contempt ruling. The Court can order the spouse to sign documents and proceed with the sale, or the court can even remove the obstinate party’s signatory authority [e.g. court says “only wife’s signature is required to sell the property”].