How to Sell a Home During a Divorce

Beth Sterner
Beth Sterner
Published on February 26, 2017

Nobody enters into marriage thinking they will get a divorce. A divorce can be one of the most stressful and emotional thing a couple can go through. I am here to help. I spent five years as a real estate paralegal and have extensive experience handling real estate transactions during divorce situations.

For many married couples, a home is the largest asset they have, and it can hold a lot of sentimental value. One side may want to keep the home, but most situations demand getting selling it. Some reasons for this include financial, legal, and personal.

You need to know how divorce can affect the sale of your home, including reasons you may need to sell. Making an emotional decision can haunt you for many years after the divorce is over.

Selling your home during divorce can save you money on capital gains tax! The fine print is you have to sell your home while you are still legally married.

While legally married you are eligible for an exclusion up to $500,000. Once you are divorced the exclusion drops to $250,000. I will talk more about tax strategy below.

Going through a divorce does not mean you have to sell your house. If you want to sell, you should get expert advice to find out if it is a good time to sell and ensure you get the most money for your home.

Do you know your state’s divorce laws? Here in Mooresville, NC, the divorce laws require a married couple to be separated for one year and one day before divorce can be granted. What this means is one person in the relationship must find another place to live for one year. During this year, you will likely have questions about who will pay the mortgage and maintenance of the house.

I am going to answer the most common questions my clients ask about selling a home during divorce.

United States Divorce Statistics

In the United States the divorce rate is around 50 percent.

How does number of marriages affect divorce rate?


First Marriage: 41 percent end in divorce

Second Marriage: 60 percent end in divorce

Third Marriage: 73 percent end in divorce


See more about the Divorce Statistics in the United States here, and in North Carolina here.

If you need to sell your home during divorce, you will be tested emotionally. Divorce in itself is not easy, add in selling your home and it is even more challenging. 

Selling Your Home During a Divorce


As a married couple owning a home is a great accomplishment. Going through a divorce and having to sell your home is one of the hardest parts. 

There is no doubt a home holds sentimental value to everyone. Sometimes when going through a divorce it is best to sell it and move on, and sometimes it may be better to hold onto it. You need to consider many things when deciding whether or not to sell your home during a divorce and I am going to go over them.

You will need to commit to your decision to keep or to sell your home during a divorce. The major difference when selling a home while going through a divorce is you have to decide who gets what before the sale. Somehow you need to split your personal belongs, including furniture, electronics, dogs or cats, and the money from the sale of your house.

Most importantly, you should consult with an attorney. They will help divide everything so that it is fair for both involved. Before you call a top Realtor you will need to know who is getting what after the sale of your home. 

A local Realtor will help you determine the value of your home to ensure you get the highest return on investment. When you know the value of your home you will have a better idea of what equity you will get or have to split after selling. 



When selling your home during a divorce you need to understand how the process will impact the sale.

How to Sell House to Spouse During a Divorce?

A spousal buyout on your home is not a difficult to negotiate as you may think at first. However, later down the line it will get tricky. As time goes by the home will appreciate or depreciate and one side is going to be upset the other one made more money. It is important to understand this risk going into negotiations of a spouse buyout.

I often see the custodial parent continuing to live in the house, which is the best way to maintain stability for children during a time of significant change.  

It is likely a spouse buyout will be in your separation agreement where stated one side will sell the home to the other side. The buyout is usually done by refinancing the home in order to take out a new mortgage, or by dividing assets equal to dollar amount of selling spouse’s portion. Retirement accounts or marital investments can be divided to settle the interest the selling spouse has in the house.

If you can not agree with your spouse to sell the home, you can rent the home to your spouse. 

Can you Keep your Home when Separating?


There are numerous ways a spouse can keep the house when separating. The most common scenario is a spouse buyout, but there are different ways for you to keep your home.

One of these ways is to rent the house from your spouse. In this situation you are basically paying your spouse’s portion of your mortgage. A better scenario is to buyout your spouse, but a divorce can be very costly and you may need to come up with a payment plan or sell other assets.

Another option is to rent the home to a family member where you will be able to continue to pay the mortgage. The downside is you will be the landlord and will likely split and profits with your ex spouse. In this case you may want to hire a property management firm to take care of the home and split the proceeds equally.

Taking on the position of a landlord is never easy. It will be a lot more difficult when you own the home with an ex spouse.  

Sell Home Before or After Divorce?


My recommendation is if you are going to sell your house because of your divorce, it is best to do so before the divorce is final. The most important thing to do is to meet with a top local Realtor and an attorney so the can explain your options based on your specific situation. As I previously mentioned I have an extensive background in helping people with their real estate transactions while going through divorce. I am here to help you.

Selling your house before the divorce is finalized it usually the best option. If you have owned and lived in your home for at least two years, you are eligible for a capital gains tax exclusion of $500,000 while legally married. Planning your strategy based on taxes implications is your best option when you are deciding whether or not to sell your house in a divorce situation.  

What to Know about Taxes when Selling a Home During Divorce


When you are selling you house during a divorce it is important to consider Capital Gains Taxes. A legally married couple has a tax exclusion of $500,000, and after divorce this tax exclusion drops to $250,000.

You can cost yourself tens of thousands of dollars if you do not utilize the best tax strategy when selling your home during a divorce. It is very important you talk to a top local Realtor, an attorney and a tax professional. They can help you understand how capital gains tax will affect you. 

The profits you make from the sale of a property can be taxed when it exceeds a certain amount, this is known as Capital Gains Tax. 

Any profit you make will be taxed through capital gains UNLESS you have lived in your home for a minimum of two of the previous five years leading up to the sale of the house. The house must be your primary residence, also known as Principal residence. As I stated multiple times, once you are divorced the tax exclusion for capital gains drops to $250,000. While you are legally married the exclusion is $500,000.\

Remember, selling your home while you are still legally married, can save you thousands of dollars. If you have questions about the information in this article, or want to discuss your specific situation, contact me HERE!

Who will Pay the Mortgage During a Divorce?

When it comes to paying the mortgage while going through a divorce, you need to be cautious about the amount of risk you take during the process. 

The best advice I can give you is to put everything in writing and do not accept any verbal agreements. You do not want to be caught off guard by your spouse. Emotions run high during divorce and one party is often looking to get back at the other side in any way the can. Your emotions drive your actions so do not react to something your spouse says or does without thinking it through thoroughly and logically. 

If someone wants to keep the house during a divorce, you will have questions about the mortgage. When both of your names are on the title and on the mortgage you will need to step lightly, especially if your spouse is walking away from the home. You may be exposing yourself to a fair amount of risk in this situation.

What if your spouse stops making payments? Will this impact you since your name is also tied to the home?

Giving your spouse money directly instead of paying the mortgage yourself is always a bad idea. If your spouse decides to use the money for something other than the mortgage it will impact your credit history and risk foreclosure.

However you work things out with your spouse is up to you, but you need to have it in writing and reviewed by your divorce lawyer.

 More Resources to Find Out More about Selling a Home During Divorce

Divorce Laws in North Carolina by

Tax Considerations when Dividing Property During Divorce. By Journal of Accountancy


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