Opening question:
Should your client sell, refinance, or defer the disposition of the marital home in a Washington divorce?
Snippet answer:
Use Washington’s “just and equitable” standard as your north star, then pressure-test three paths—sell now, refi + equity buyout, or defer with guardrails. Your job is to pick the lane that can actually fund, record, and close without lighting fees on fire.
Start with the Washington lens
Washington isn’t a mechanical 50/50 state. You’re aiming for a result that’s just and equitable, and that means the real-world logistics matter: loan qual, equity, timelines, tax/transfer mechanics, and risk. My short rule: If it can’t close, it isn’t equitable in practice.
Option 1: Sell now
When it fits: Payments aren’t sustainable, equity is needed to settle, or risk is creeping in (deferred maintenance, HOA special assessments, solar/lease encumbrances, messy permits).
What to put in the order:
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- Possession, access, and personal property spelled out (no move-out standoffs).
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- Preliminary title required early—surface liens/HELOCs/UCCs before you promise numbers.
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- REET affidavit at recording with the correct divorce exemption (yes, even when exempt you still handle the paperwork).
Pro move: Decide who signs what at closing and how you’ll handle last-minute credits, repairs, or rent-backs—write it in.
Option 2: Refi + equity buyout
When it fits: One party wants the home and can qualify.
Financing realities (what underwriters look for):
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- Divorce equity buyouts are often priced like rate/term (not cash-out) when structured correctly—no cash back, proper documentation, and ownership/seasoning met.
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- Some products treat buyouts as special-purpose cash-out with different overlays. Translation: confirm the delivery path (Fannie vs. Freddie) before you promise a rate or timeline.
What to draft:
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- The buyout amount, a refi/assumption deadline, and a sale fallback if the deadline is missed.
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- Who pays closing costs and the lien release mechanics for the departing spouse.
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- Required milestone proofs (application date, conditional approval, clear-to-close).
Heads-up: Support paid/received can help or hurt qualifying. Anchor your timeline to how that income/debt will be counted.
Option 3: Defer with guardrails
When it fits: Neither party can qualify today, or timing the market makes sense. Deferral without structure is a slow-burn disaster; with structure, it buys time without bleeding equity.
What to draft so it doesn’t backfire:
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- Occupancy terms; who pays PITI/HOA/insurance/taxes; and maintenance standards.
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- Access/inspection rights and a modest repair reserve for capital items.
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- Automatic triggers to sell (payment default, missed refi deadline, relocation, or a date certain).
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- Who signs the eventual conveyance and how you’ll handle REET paperwork on that later transfer.
Washington-specific speed bumps (check these every time)
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- REET & divorce transfers: Use the correct exemption on the affidavit; don’t assume “exempt” means “ignore the form.”
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- Due-on-sale safe harbor: Transfers incident to divorce typically won’t trigger acceleration—but you still need to plan for assumption or refi to clear liability.
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- Homestead context: Washington’s homestead backdrop can shape creditor exposure during deferrals—add it to your risk scan.
Quick checklist for your file
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- Prelim title, mortgage statements, payoff and HELOC ledgers, HOA estoppel/payoff, permits, solar/lease docs.
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- Decide sell vs. refi vs. defer based on loan feasibility, equity math, and timeline risk—not hope.
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- Write the decree like a closing checklist: who signs, who pays, what happens if X misses Y.
Final takeaway
You’re not just dividing a house—you’re engineering a result that closes. Pick the path, draft like it must fund and record, and partner with a local Certified Divorce Real Estate Expert to keep your case moving with fewer surprises.
Join my October 2025 Family Law Divorce Class on October 30, 2025, 12:00–1:00 PM (online)
? Register now: www.teamrebaclasses.com
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Written for you by Reba Haas, REALTOR® & Certified Divorce Real Estate Expert, serving Greater Seattle, WA.
