October 14

Can I Sell My House If I’m Getting Divorced?: A Quick Guide


Going through a divorce is tough. It’s a long process and requires a lot of emotions – and money too. Most people would just walk away and never return, but what about the house?

They sell it, leave it to their ex-spouses, co-own, or just abandon it. Either way, they’re still going through the divorce. You’ve got options. It only depends on what you want to happen.

But if your primary problem is what to do with your marital house, we’ll help you find your way through this.

Why Should You Sell the House in a Divorce?

Most divorcing couples prefer to sell the marital home and split the proceeds rather than one of them keeping it.

It’s because they don’t want to cling to the memories made within that house, and also for more legal and practical reasons, such as having the funds to start over.

You are more likely to avoid significant liability risks and financial requirements if you’re selling a home rather than owning it.

But things are different when there are children involved. The court does not want to leave parties (or their children) homeless or incur additional expenses because of a property sale.

The court will try to find a solution to divorce selling that is to both parties’ mutual benefit.

When is the best time for a home sale? Most of the time, the home sale process can cause delay because a Standard Family Law Restraining Order prohibits it without a court order.

Sell the marital house before your divorce proceedings. This way, you can avoid divorce settlement delays and litigations in the divorce court.

Benefits Of Selling a Home Before a Divorce

If you feel that a divorce is inevitable, you should decide to sell your house before your divorce proceedings. Divorcing couples sell their primary residence before a divorce because:

  • A sold real estate with up to $500,000 in profit is excluded from the capital gains taxes.
  • Neither of you will face any obligations of refinancing the house

Who Gets the House in a Divorce?

Deciding who gets a house in a divorce does not happen in a separate void. It’s generally woven into a comprehensive settlement agreement.

The deciding factors are:

  • If one spouse wants to keep the house
  • When both spouses want the house

If One Spouse Wants to Keep the House

This is usually common when one party is the custodial parent who wants to continue raising a family with less disruption, and the other spouse wants out.

The interested party would need to buy out the other party’s interest in the house.

This means you’ll have to pay the mortgage and settle other financial contributions to keep the house even on a single income.

You’ll need an appraiser’s advice on determining the fair market value of the home. This will also determine how much it costs to buy out your spouse.

When Both Spouses Want the House

In cases where both spouses want to keep the house, the couples should make certain decisions with the help of an attorney.

If the couple is playing tug of war for the house’s title, the court will be the one to decide on who gets it and at what price. 

The two primary considerations are:

  1. Financial viability
  2. Children

How to Sell Your House in a Divorce

The home sale process can take a while and will require financial arrangements. This is why you should plan the home sale before your divorce settlement.

If you plan to sell a home while you’re still legally married, you won’t have to pay capital gains taxes up to $500,000 in profit.

If you’ve decided, you can sell your house in divorce in three steps:

1: Home Sale Preparation

The preparation that needs to be done when selling your house are the following:

  • Select and communicate with real estate appraisers and agents
  • Set an asking price of the home
  • Ensure the home is ready for presentation

A stipulation is the best way to sell marital property during a divorce. If a stipulation is not possible in your situation, you can ask for a court order to sell a home.

Selecting an Agent

It’s unnecessary to hire an agent when you plan to sell a house, but if you’re facing a divorce – you need an agent. The agent will speed things up in the home sale process.

Often, it can be challenging to choose an agent. Here are some tips to save the argument:

  • You can work with the same agent who helped you buy the house.
  • If you didn’t have a previous agent, each of you should pick one and decide after

Set an Asking Price

Another benefit of hiring an agent is setting the appropriate selling price for your house. The agent should determine the house price according to its fair market value.

It can be challenging to do this alone unless you are in a real estate business yourself

Otherwise, turning that decision over to the agent will eliminate one potential conflict and will be less stressful for the divorcing couple.

Preparing to Show the House

Before even selling the house, you must make sure your home is ready to be sold.

That means you must agree on where you’ll get the money from if certain repainting and repairs need to be done. A well-refurbished house will also get a higher value on the market.

Selling a home will be easier if both of you have moved out by the time you put the house on the market, you can leave the work to the agent.

2: Accept an Offer

If you want to rush in selling a home during your divorce, accepting or choosing between offers can be daunting.

But if you get lesser offers than expected, then be ready to compromise.

Make sure you, your spouse, and your real estate agent have agreed on a price before selling a home.

Here are some valuable tips when you’re in the middle of putting your house on the market and choosing between offers:

  • Make the process easier by avoiding contention and keeping the process civil.
  • If you want to be done with the sale quickly, you may have to accept a lower price.
  • If you have a few offers, communicate with your spouse, agent, and divorce attorney.
  • If certain offers are not appealing, ask for advice from your attorney and real estate agent.

3: Divide the Profit

When the house is successfully sold, you can divide the profit equally. But it won’t be that simple!

Before you even rush into splitting the proceeds 50/50, think about other costs first. This includes the payment of any remaining mortgage balance, closing costs, and the agent’s fees.

Not to mention the potential capital gains taxes if you fail to qualify for a tax exclusion.

If one spouse has made post-separation mortgage payments, it likely reduced the principal amount and increased the equity.

As a result, the amount divided between the spouses after the closing costs and paid obligations may also increase.

When these payments have been settled, you can split the remaining proceeds fairly.

House Options When Going Through a Divorce

When you have trouble deciding on what is the best thing to do with your house as you are going through a divorce, here are a few options you might want to take into consideration:

1: Sell the House and Split the Proceeds

This is the most chosen option among divorced couples, especially those without children. It’s less complicated and more practical.  

Remember, in agreeing to the asset split, you need to consider your mortgage capacity and where the children will be housed.

This helps in establishing a clean break between you.

This also is tricky. If you plan to sell the house, you need to decide fast. Selling the house later while in a divorce may cause delays and financial obligations such as taxes and other fees.

Before you can qualify for a tax exclusion on the sale of a primary residence, you must meet certain requirements.

2: Buy Out The Other Spouse’s interest

The usual divorce scene is one of you wants to stay while the other leaves. Selling the house at this point is a questionable option.

The typical divorce scenarios which result in buy-out are the following:

  • One spouse wants to keep the house and can afford to refinance it.
  • The house has sentimental value to either party.
  • The market conditions and appreciated value of the house are low for selling.
  • The other party, who is a custodial parent, files for a deferred sale

How Does Buying-Out Work?

If you’re the interested party and want to have the house for yourself, you’ll need to buy out the interest of the other party. How does it work?

When one party buys out the other legal interest and keeps the home, there’s a need to pay off the existing mortgage and any agreed equity.

One party doing the buying out must have access to a significant amount of cash to continue paying the new mortgage, property taxes, and real estate insurance.

Other spouses might also file for deferred sale (temporary delayed sale) of the house where they want to delay the home sale temporarily, often until the youngest child turns legal age.

You will also need help from an attorney to help you identify the buy-out price. The buy-out amount may be more than or less than the market value.

It’s kind of complicated, so be sure to ask for help from professionals.

3: Divide Large Assets

If both parties keep it civil, dividing large assets can be quicker to finalize a divorce.

The division of multiple shared large assets becomes more comfortable because you won’t need to think about the future value of the real estate.

But like any other process, dividing large assets can come with its own challenges.

Dividing real estate, vehicles, securities, valuable collectibles, retirement benefits, and household items is where couples run into difficulty.

You’ll need to negotiate the value of large assets to land on an equitable agreement. This is where the idea of Community Property and Equitable Distribution states come in.

To get a clear picture of what you should know when you divide large assets, you’ll need the help of an attorney.

Before a divorce is granted, all assets must be divided to satisfy both parties. State laws vary; it’s vital to understand your state’s exact laws on assets in a divorce.

4: Co-own a Divorce Home

Co-owning a house after a divorce is an option, but it’s not always the best path forward when both parties want to start with a blank slate.

There are several reasons why a divorced couple may decide to continue co-owning a house after a divorce.

They include the following: 

  • Stability for kids – Children need peace in their lives to thrive.
  • The couples are waiting for a higher eventual sale price in the real estate market.
  • A future buyout – If neither of the parties has the capital to afford the buy-out.
  • Nesting – the parents with joint child custody care for their children in the family home.

Frequently Asked Questions (FAQs)

Here are some of the frequently asked questions. The answers to these questions may be essentially helpful for you.

Will You Need a Real Estate Agent if You Plan to Sell the House?

Selling a home can solely be done by the owner unless you live in a state where hiring a real estate lawyer is required by law. In this case, you must prepare to pay real estate agent fees.

A state may require the homeowner to get an agent’s advice mainly to protect the integrity of home sales in that state.

Aside from that, hiring an agent is the best option for a divorcing couple to have the house SOLD immediately and divide the proceeds equally.

Who Is Going to Settle the Mortgage Payments if Not Selling The House?

In most cases, the one who wants ownership of the house after the divorce will be the one to refinance it. This usually happens when you buy out your spouse’s interest in the home.

There can also be cases where your names and your spouse’s names are in the existing mortgage.

You will have to relieve the other person of all liability, including property taxes, before you can get sole ownership of the marital home.

And this is done through refinancing or buying out your spouse’s interest in the house.

When you’re buying out your ex-partner’s interest in the house or removing them from liability, you will be given 60 to 180 days to finalize the process.

What Are the Tax Implications of Selling a Marital Home?

The biggest tax-related issue to watch out for when selling is to pay capital gains taxes. Couples can apply for this tax break if they file a joint tax return or if they file separately.

Capital gains taxes are federal taxes paid on your profits when you sell your house (assuming your house value has appreciated).

  • Selling the home during the divorce: Depending on your tax situation, it can be beneficial to wait on finalizing your divorce until you’ve closed the sale and filed your taxes jointly. This allows you to make sure you can get the full tax exemption.
  • Selling the home after the divorce: If you decide to wait to sell your home until your divorce is finalized, each partner can still claim the total $250,000 exclusion when filing separately.

NOTE: Pay attention to the time limits. Sell the house before three years have passed to qualify for capital gains tax exclusion.

What Is a Prenup or Post-nuptial Agreement?

Prenuptial means before the wedding, and post-nuptial means after the wedding.

These two agreements are legal documents signed by both spouses that indicate what each of them would and would not get (i.e., assets and debts) in the case of a divorce.

Either party most commonly executes prenuptial agreements with large and valuable assets before the marriage.

What if one spouse files for a prenup or post-nuptial agreement? The properties acquired during the marriage will not be jointly owned.

These agreements remove many of the question marks, and the agreement stands regardless of whether you live in a community property or equitable distribution state.

What Is an Equitable Distribution State?

An equitable distribution state is where the court will make decisions on who gets what based on the following deciding factors:

  • Financial contributions
  • Needs of children (if there are any)
  • Financial stability and earning potentials of the other spouse

In all other states, assets and earnings acquired during marriages are divided equitably (fairly) but not equally.

To cut it short, the one who needs it the most – gets to have it.

We’re talking about one spouse with a single income or whom the children would want to be with and many other factors

They are most likely to get valuable assets such as the primary home. These are also on a case-to-case basis, depending on the state.

Note that property division doesn’t necessarily mean everything gets physically divided equally. Instead, the court may grant each spouse a percentage of the property’s total value.

What Is a Community Property State?

Community property state is where everything you acquired upon marriage is owned 50/50. These are called marital property.

This includes all assets, income, and even debts. Exceptions to this are the properties owned before your marriage.

If assets such as a house are acquired before marriage, it is recognized as separate property. As long as your spouse’s name is not included in the title, you get sole ownership of the property.

But it can get complicated once the spouse would also claim ownership. This is why divorcing spouses need a divorce attorney.


Oftentimes, divorcing couples would need to sell their marital home mostly for personal reasons.

Selling your house can be easy or become a nightmare, depending on how well you and your former spouse handle the real estate situation.

And others would also choose to stay because the family home has sentimental value to them or children need a home.

Either way, the best thing to do is that it benefits both parties. Ask for legal advice if you can’t settle this on your own.


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