Who Gets the Marital Home in a Michigan Divorce? Buyouts, Sales, and Refinancing Explained
Michigan courts divide real estate fairly, but not always exactly 50/50. If you cannot agree on what to do with the marital home, a judge will typically order you to sell it, execute a buyout, or refinance the mortgage.
For most married couples in Michigan, the family home is their largest financial asset. Deciding who gets to keep the house-or if it must be sold-is often the most stressful part of the divorce. Because Michigan follows "equitable distribution" rules, the court aims to divide property fairly, though not necessarily exactly equal. Finding an experienced attorney in our USA Lawyer Directory can help you secure your financial future, but you first need to understand the mechanics of property division.
Marital vs. Separate Property
Before dividing the home, the court must determine if it is marital property. Under Mich. Comp. Laws § 552.19, assets acquired during the marriage are generally subject to division. However, if you owned the home prior to the marriage or inherited it, it might be considered your separate property. The important precedent set in Reeves v. Reeves, 226 Mich. App. 490 (MI Court of Appeals 1997) established guidelines on how separate property can sometimes transform into marital property if marital funds (like joint income) were used to pay down the mortgage or make significant improvements.
Calculating Home Equity and Appraisals
To divide the home's value, you must first calculate its equity. Equity is the current market value of the house minus any outstanding mortgage balances or liens. You cannot rely on a generic online estimate. You generally need to hire a licensed real estate appraiser.
For example, if your home is appraised at $350,000 and you owe $200,000 on the mortgage, your marital equity is $150,000. This $150,000 is the figure you and your spouse will be negotiating over in a court like the Oakland County Circuit Court, Pontiac.
Executing a Buyout vs. Forcing a Sale
Once you know the equity, you have three primary options for dealing with the property.
1. The Buyout
If one spouse wants to keep the house, they must "buy out" the other spouse's share of the equity. Using the example above, if the equity is $150,000, the spouse keeping the home would generally need to pay the other spouse $75,000. This payment can be made in cash, or by trading other marital assets, such as giving up a larger portion of a 401(k) retirement account.
2. Forcing a Sale
If neither party can afford to buy out the other, or if neither wants the house, the court will order the home to be sold. The spouses will typically agree on a real estate agent, and the net proceeds from the sale (after paying off the mortgage, closing costs, and realtor commissions) will be divided equitably between them.
Refinancing the Mortgage to Remove a Spouse
A divorce judgment alone does not remove a spouse's name from the mortgage. The mortgage is a contract with a bank, and the bank does not care about your divorce decree. If you are keeping the home, you will almost always be required to refinance the mortgage solely into your name within a specific timeframe (often 90 to 180 days). If you fail to qualify for refinancing based on your single income, the court will likely force the sale of the house.
Handling Quitclaim Deeds in Michigan
Once the buyout or refinancing is complete, the spouse leaving the home must sign a legal document transferring their ownership rights. This is typically done via a Quitclaim Deed. This deed must then be officially recorded with the local county, such as the Wayne County Register of Deeds, Detroit or the Kent County Register of Deeds, Grand Rapids, to formalize the transfer of the title.
Frequently Asked Questions (FAQ)
Who pays the mortgage while the divorce is pending?
Generally, both spouses remain financially responsible for the mortgage during the divorce if both names are on the loan. However, you can file a motion asking the judge to issue a temporary order requiring one specific spouse (often the one living in the home or the higher earner) to make the monthly payments.
Can I change the locks on the marital home?
Unless you have a specific court order or a personal protection order (PPO) stating otherwise, you generally cannot legally lock your spouse out of the marital home, even if the deed is only in your name.
What if my spouse refuses to sign the Quitclaim Deed?
If the final Judgment of Divorce awards the home to you, the court order itself can often act as a deed transfer, or you can file a motion holding your ex-spouse in contempt of court to force their signature.
Does the spouse who moves out lose their equity?
No. Moving out of the marital home does not forfeit your financial interest in the property. You are still entitled to your equitable share of the home's value, regardless of who is currently sleeping there.
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