What Happens to Real Estate in a Michigan Divorce?

 Posted on July 09, 2026 in Asset Division

Dividing any type of asset or debt is a difficult part of any divorce, and real estate ownership is no exception. Both spouses generally make strong claims to ownership of marital property, and real estate can be unique among other assets because a family has often lived and created memories within a home, making it more valuable than just its market value. When both partners want to keep a home, or any other category of real estate, what happens? 

At Elkouri Heath, PLC, our Oakland County divorce lawyers provide customized representation and personal attention for complex property issues. Our firm has served southeastern Michigan for over two decades, giving us real insights into how to handle asset division.

How Are Marital Assets Divided in Michigan? 

Before real estate or any other asset owned by either spouse can be divided, it has to be part of the marital estate. If one spouse owned a home or any other real estate before getting married, that property may not be considered marital property, depending on how it was managed during the marriage. Spouses may also have prenuptial or postnuptial agreements that dictate how assets are handled in the event of a divorce. Categorizing marital and personal property can be a complex area of negotiation all by itself. 

Once spouses agree on what is part of the marital estate and what is individual property, Michigan law requires the marital assets to be divided fairly. Sometimes this means each spouse gets something close to a 50/50 split, but not always. A spouse’s individual contributions and needs, among other factors, affect the final distribution. 

Certain assets, like cash savings accounts and even retirement accounts and pensions can be divided fairly easily. However, real estate cannot usually have two owners after a divorce. Either the spouses must agree as to which of them will own the property after the divorce, or they must sell it and split the proceeds. Rarely does a divorced couple continue maintaining ownership in the same piece of real estate. 

How Are Michigan Homes Valued in a 2026 Divorce?

Placing a fair value on a home is one of the first steps in dividing marital property during a Michigan divorce. A judge or the parties themselves will often need a clear number before deciding who keeps the house or how the sale proceeds should be split. Home values have shifted in many parts of Michigan, so a number from a few years ago may no longer reflect what the home is actually worth.

Under Michigan law, a court has authority to divide real estate as part of a divorce, and that division must be based on accurate and current information (MCL 552.19). Several factors typically go into a home valuation, including:

• Recent sale prices of similar homes in the same neighborhood

• The remaining balance on the mortgage

• Any liens, unpaid taxes, or judgments against the property

• The cost of needed repairs or upgrades

• Local market trends, including interest rates and buyer demand

Appraisals from different sources can vary, so couples sometimes hire a neutral appraiser. This can help avoid a dispute where each side hires an expert who reaches a different number.

Can I Buy Out My Spouse’s Interest in Our Home During a Divorce?

If one spouse is set on keeping the real estate, he or she will still have to split the value of the home with the other spouse. This is usually done by "buying out" the other spouse’s interest in the home, using other assets or by taking out a larger mortgage. 

While it can be tempting to bargain or borrow your way into exclusive ownership of your marital home, especially if you have young children, this may not necessarily be a good idea. You need to make sure that you can afford to keep up the property, pay for property taxes, and make the mortgage payments, which may not be possible on a single income. Talk to your attorney and discuss the possible effects of any property arrangement, including the tax consequences, before you agree to an asset division that could have negative consequences for your future. 

Will I Have to Refinance My Mortgage After a Michigan Divorce?

If one spouse plans to keep the marital home, the mortgage lender will usually require that spouse to refinance the loan in his or her name only. This removes the other spouse from the debt and confirms that the remaining spouse can afford the payments on his or her income.

Refinancing is not always simple. A spouse may need strong credit, steady income, and enough equity in the home to qualify for a new loan. If the remaining spouse cannot refinance, the couple may need to consider other options, such as selling the home and splitting the proceeds.

Some couples try to avoid refinancing by having one spouse sign a quitclaim deed, which removes his or her name from the property title. This step alone does not remove a spouse from the mortgage, though. Both names can still remain on the loan even after a quitclaim deed, which means both spouses could still be responsible for missed payments. Speaking with a lawyer before deciding on this approach is in your best interests.

How Are Vacation Homes Treated in a Divorce?

Vacation homes, cabins, and lake properties often carry both financial and emotional value for Michigan families. In most cases, a vacation home purchased during the marriage is treated as marital property, even if only one spouse's name is on the deed. This means the home is generally subject to division like any other marital asset.

If the vacation home was owned by one spouse before the marriage, or inherited from a family member, it may be treated as separate property in some situations. However, if marital funds were used to pay for upkeep, renovations, or the mortgage, the other spouse may still have a claim to part of its value. 

Couples often resolve disputes over a vacation home by selling it and dividing the proceeds, or by having one spouse buy out the other's share.

Contact Our Farmington Hills, MI Asset Division Lawyers

Your real estate could be some of the most valuable property in your divorce. Our Oakland County, MI divorce attorneys with Elkouri Heath, PLC offer experienced legal representation to help with property division. Whether you need assistance with real estate division, child custody, alimony, or anything else, we are here and ready to get started on your case. Call our office today at 248-344-9700 to schedule a free consultation.