Net Proceeds Distribution: How Does It Work?
You’ve sold the house—so who gets what? Many divorcing couples think proceeds are split 50/50, but that’s not always the case. Here’s how net proceeds are calculated and what you should know about splitting the money fairly.
How Are Net Proceeds Calculated?
Sale Price - (Mortgage Payoff + Closing Costs + Liens) = Net Proceeds
After these costs are deducted, the remaining balance is divided according to the divorce settlement.
What Costs Are Deducted Before Distribution?
Outstanding Mortgage Balance: The remaining balance on the loan must be paid in full.
Real Estate Commissions: Typically 5-7% of the sale price.
Closing Costs: Includes title fees, transfer taxes, and legal fees.
Liens or Unpaid Taxes: Any judgments or tax debts attached to the home must be cleared before distribution.
How Proceeds Are Split in Arizona
Arizona follows community property laws, which generally means a 50/50 split unless:
A prenuptial or postnuptial agreement dictates a different split.
One spouse made significant separate property contributions (e.g., using inheritance money for the down payment).
A court orders a different division based on financial need or misconduct.
What If the Home Has No Equity?
If the home is sold for just enough to pay off the mortgage, neither spouse gets a payout.
If the home is underwater, both spouses may owe money.
Short sales may require lender approval and could impact credit scores.
Protecting Your Share of the Proceeds
To ensure you receive the fairest distribution possible, consider:
Working with a Certified Divorce Real Estate Expert to maximize your sale price.
Consulting a family law attorney to clarify legal rights.
Having a financial advisor assess tax implications and reinvestment strategies.
Final Thoughts – Let’s Ensure You Get What’s Fair
Net proceeds distribution isn’t always simple. If you want to maximize what you walk away with, call, text, or email me today—let’s make sure you get your fair share.