Selling property before a divorce settlement

Deciding to go your separate ways was already hard enough. Now you also have to decide what to do with the house — plus when, and how to do it.

Should you sell before the divorce is final? Or wait until it’s official? There are pros and cons either way, plus a lot of legal and financial things to consider.

Things can get even more complicated in situations where only one spouse is on the mortgage or deed, such as in cases where that spouse had purchased and owned the home before the other one moved in.

In this article, we’ll take a look at some of those legal and financial considerations, explore different ownership scenarios, go over a few processes step-by-step, and hear from some experts who can help you decide whether selling the house before divorce, or after, makes sense for your unique situation.

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What to know before you begin

Before diving into the details of selling a house during a divorce, it’s important to understand that many of the steps and examples in this guide assume a relatively common situation: the home was purchased by both spouses around the time of the marriage, and both are involved in the mortgage or deed.

However, real-life situations are often more nuanced. Courts may weigh several factors when determining how a house should be handled in a divorce, including:

• Was the home purchased before or after the marriage?
• Are both spouses on the mortgage, or just one?
• Are both spouses listed on the deed, or just one?
• Did both parties contribute financially to the home through mortgage payments, upkeep, or improvements?
• Was the house refinanced, gifted, or inherited during the marriage?
• Did either party use separate funds to purchase or maintain the home?

Even small differences in how the home was financed, titled, or maintained can affect how it’s treated under the law, especially in states with different property division rules.

This article aims to walk you through the most common paths forward, no matter your situation. But for scenarios involving separate property, inheritance, or complex financial arrangements, it’s best to consult a family law attorney who understands the laws in your state.

What happens to the house in a divorce?

In a divorce, what happens to the house depends on legal rules and financial facts. These rules apply in most cases whether both of you are on the mortgage and deed, or only one of you is. But things can play out in a different way depending on your exact situation.

One of the biggest legal factors is whether you live in a community property state or an equitable distribution state. Each type handles property differently during a divorce.

🤲 Equitable distribution states

Most states follow equitable distribution. That means marital property — like a house bought during the marriage — gets divided fairly, but not always 50/50. Courts may look at things like income, each person’s role in the marriage, and who contributed what.

Even if only one spouse is on the mortgage or deed, the other may still have a claim if the home was bought during the marriage or if they helped pay for it or maintain it.

If one of you bought the home before the marriage, it might be considered separate property. But if both of you paid into it or the value went up during the marriage, the non-owning spouse may still be entitled to a share.

⚖️ Community property states

In nine states — Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin — property bought during marriage is seen as jointly owned. This means a home bought while married is usually split 50/50, no matter who paid for it or whose name is on it.

If the home was bought before the marriage, it may stay separate. But if joint money was used to pay the mortgage or improve the home, that can change things.

In these states, the name on the deed or mortgage matters less. The key question is when the home was bought and how it was paid for.

Special rules in some states

Some states, such as Alaska, Tennessee, and South Dakota, allow couples to decide between community property rules and equitable distribution. These decisions can be made through legal agreements, like a prenup or postnup.

How does ownership affect things?

Here’s how courts may look at it:

• Both spouses on the deed and mortgage: This is the most clear-cut. The house is a shared asset, and both people have equal legal and financial responsibility.
  
• Only one spouse on the mortgage, but both on the deed: Both still legally own the home. Only one is responsible for the loan, but the equity is usually shared.
  
• Only one spouse on both the mortgage and deed: If the home was bought before the marriage and kept separate, it might stay separate property. But if marital money was used for payments or repairs, or both partners lived in it as a shared home, the other spouse may still have a legal claim.

Even in trickier setups, courts look at things like who paid for the home, who maintained it, and whether it was treated like shared property during the marriage. These details matter, so if your situation is unique, the best advice will come from your divorce attorney.

How to split a house in a divorce

To split a house in a divorce, you’ll first need to consider a number of things like finances, your living situation, and how well you and your spouse can work together. There’s no universal answer, but there are a few common paths couples take.

💰 One spouse buys out the other

A buyout happens when one spouse wants to keep the house and pays the other for their share of the equity.

Equity is the difference between what the home is worth (it’s market value) and how much is left on the mortgage. If a home is worth $300,000 and there’s $200,000 still owed on the mortgage, that home has $100,000 in equity.

An unbiased, professional appraiser determines what the home is worth. The couple can choose an appraiser together, or the court can choose one for them if they can’t agree. The court can also decide how to split up the equity between the couple based on several factors, but it’s usually 50/50.

Buyouts help make things fair. If the couple stayed together and sold the home later, they’d likely split the profit. But when only one person is keeping the home, a buyout ensures the person moving out still gets their share, as if they had sold the house together.

For example: If the couple would have made $50,000 in profit by selling the house now, each person's share would (typically) be $25,000.

In a buyout, the partner staying in the home literally buys the other partner’s share from them, which in this case would mean paying them $25,000.

If a full cash buyout isn’t possible, couples may agree to a partial buyout. They might trade other assets, like a car, savings, or retirement funds, to keep it fair.

Keep in mind that the spouse keeping the house will likely need to refinance the mortgage. This means qualifying for the loan solo, which can be tough depending on income, credit, and debts. Refinancing may also come with closing costs and delays.

🎖 Best for: Couples where one person wants to stay in the home and own it themselves. The person staying in the home will need to be able to afford to pay the other their share of the equity. If they can, this is a good option, especially when kids are involved and stability is important.

⏳ Remain co-owners temporarily

Instead of selling right away, some divorcing couples choose to hold onto the house jointly for a period of time. 

This arrangement requires strong communication and clear planning. You’ll need to decide who will live in the home, how you will pay the mortgage and bills, how you will handle repairs, and when or how you will eventually sell or refinance the home.

You’ll also need to put these agreements in writing, either as part of your divorce settlement or in a separate document. 

This often happens when children are involved, and both parties want to avoid disrupting the children's school or daily routines. It’s also sometimes used when the real estate market is weak or when one spouse wants to stay put but can’t yet afford to buy the other out.

Deferred sales order

Sometimes, temporary co-ownership is the result of a judge issuing a “deferred sales order.” A deferred sales order typically lets one spouse (like the custodial parent) stay in the home. They are allowed to stay until a certain condition is met, like the youngest child graduating from high school. After that, the home can be sold.

🎖 Best for: Couples who can communicate and work together, especially when kids are involved or it's not the right time to sell or refinance.

➗ Sell the house and split the proceeds

If neither spouse wants (or can afford) to keep it, the most straightforward option may be to sell the house and divide the profits.

In this case, you would agree to list the home, usually with a single real estate agent. Together, or with help from your lawyers, you’ll decide on a listing price, manage showings, and choose whether to accept an offer.

Once the house sells, you’ll subtract the remaining mortgage balance, closing costs, and agent fees. Whatever money is left gets divided or split up based on your divorce agreement.

This route can help you avoid lingering financial ties, but it still requires coordination during a stressful time. If one spouse is living in the house, for example, you’ll need a plan for how showings and move-out will be handled. And if the market is slow or the home needs repairs, a sale could take longer than expected.

🎖 Best for: Couples who can communicate and work together, especially when kids are involved or it's not the right time to sell or refinance.

Is it better to sell your house before or after divorce?

The general consensus among legal experts tends to be that it’s best to sell before the divorce is finalized, but after a divorce agreement is in place.

In other words, it’s often wise to start divorce proceedings, work out your financial and property terms in writing (including how you’ll split the house proceeds), and then proceed with the sale.

This approach provides clarity, helps avoid legal delays, and lets both spouses move on with fewer entanglements.

According to attorney Christopher Migliaccio, founder of Warren & Migliaccio L.L.P., “Selling early can simplify the divorce process. It allows both spouses to liquidate the asset, reduce ongoing costs, and avoid fighting over who gets to keep the house.”

That said, there’s no one-size-fits-all solution. Some families find it better to wait until after the divorce to sell. This is true when emotions run high, finances are tight, or kids are involved.

Let’s look at the pros and cons of selling before or after your divorce.

Selling property before divorce settlement

Selling your home before your divorce is finalized, but after reaching a written agreement on how the sale and proceeds will be handled, can offer financial clarity and simplify the divorce process.

Here’s what to consider if you’re thinking about selling before the divorce is officially complete.

✅ Pro: Cash is easier to split than other assets

Selling the home early turns a large and sensitive asset into cash, which is much easier to divide. It also eliminates future disputes about who pays the mortgage or maintains the property.

“One major advantage to selling early is that proceeds from the sale can be easier to split than physical property,” explains Ladah. “Cash or escrowed funds are more straightforward to divide.”

But Ladah also adds that this usually only works if both parties can agree ahead of time on how to sell the home and split the proceeds. Otherwise, the court may have to step in.

“If they disagree on when or how to sell, or even how much to list the home for, the process can become drawn out. The court will not allow the sale of a jointly owned property during a divorce without written agreement from both parties, unless the court issues an order for sale. This is usually only done in cases where negotiation or mediation has failed.”

✅ Pro: Reduces post-divorce disputes

Couples who wait until after the divorce is settled to sell their house sometimes end up back in court over disputes related to the property. According to Duane Coker, family law attorney and founder of Coker, Robb, & Cannon:

“[Selling early] avoids several very common post-divorce disputes, including disagreements over payment of mortgage, taxes and insurance until the property sells, disputes over whether the party remaining in the residence is maintaining it properly and whether they are cooperating in showing it to potential buyers, and issues over the ultimate distribution of funds when the sale occurs.”

In other words, selling before the divorce is final can help avoid drawing a stressful process out even further.

✅ Pro: Makes cash available for moving, legal fees and more

Divorce is expensive. So is moving out and finding a new place. Selling before the divorce is final can help provide each person with a little financial peace of mind in a stressful time.

Joanna Smykowski, attorney and senior contributor at Custody X Change says: “Closing before the case ends delivers fast cash for new housing and legal fees, pins down an exact sale price so no one argues about appraisals later, and severs the shared mortgage sooner.”

❌ Con: Less leverage in the divorce settlement

Once the home is sold and the money is in hand, you’ve lost one of the biggest bargaining chips in the divorce. That can limit your ability to negotiate for other valuable assets like retirement funds or vehicles.

As Smykowski notes, “The trade-off is reduced bargaining leverage when you still need other assets to balance the settlement.”

If the home is sold too soon — especially without a clear agreement on how the proceeds will be divided — you may end up with fewer options during negotiations.

❌ Con: Potential tax implications if not filed jointly

In the United States, a married couple can exclude up to $500,000 in profit from taxes when they sell their home, as long as they file a joint tax return and have both lived in and owned the home for at least two of the past five years. This is called the capital gains tax exclusion.

If you’re single (or filing separately), that exclusion drops to $250,000.

Here’s where it can cause problems: If you sell the house while still legally married but then file taxes separately for that year, you could lose the $500,000 benefit, and only qualify for the $250,000 exclusion.

If your profits are higher than $250,000 and you don’t qualify for the larger exclusion, you might owe capital gains taxes to the IRS. A tax advisor can help you figure out if your timing puts you at risk.

❌ Con: Can be stressful during an already difficult time

Selling a home is stressful even without a divorce in the mix. Doing both at once can be overwhelming, especially if you and your spouse don’t agree on things like price, offers, or timing.

According to Morghan Richardson, divorce attorney and partner at Tarter Krinsky & Drogin, if you’re set on selling the house before the divorce is final, you’re going to have to come to an agreement with your spouse, and there’s no getting around that. If you can’t agree on what to do with the home or the proceeds, the entire process can become even more emotionally draining.

“The difficulty is both parties must agree on the sale,” says Richardson. “There needs to be an agreement about the sale proceeds, which could help fast-track the case or cause delays if not handled carefully.”

Be honest with yourself about your emotional and mental bandwidth before taking on both processes at the same time.

Selling property after divorce settlement

Some divorcing couples decide to wait until after the divorce is finalized to sell their home. This might sound like the simpler choice during an emotional time, but it can come with extra challenges. Here’s what to think about if you're considering selling the home after the divorce is complete.

✅ Pro: Avoids rush decisions and gives you time to plan

Selling a home while also navigating the emotional and legal stress of divorce can be overwhelming. Waiting until the dust settles gives both people a chance to catch their breath and focus.

Debra Whitson, a New York family law attorney, says this option "allows each party to have a clear picture of their post-divorce financial status.” That means you’ll know better what you can afford, and whether buying out the home, renting, or buying something new makes sense.

If you need time to secure housing, rebuild your finances, or emotionally prepare, waiting to sell can give you the space to do that.

✅ Pro: Keeps the home available for negotiation

Holding off on selling can give both parties more flexibility during the property division process. Instead of dealing with cash upfront, the home becomes a placeholder that can be used to balance out the final agreement.

Smykowski notes that waiting “leaves the house available as a bargaining chip in property talks.” This can help when one spouse wants to trade their share of the home for other marital assets like retirement funds or a business interest.

If you’re struggling to reach agreement on who gets what, keeping the house in the mix can sometimes help resolve those other pieces more fairly.

❌ Con: Shared costs and upkeep can add up

Once the divorce is finalized, the house still needs to be taken care of. If both of you still legally own it, that responsibility is shared.

That means mortgage payments, property taxes, utilities, and insurance still need to be paid. Any necessary repairs or staging expenses to prepare the home for sale are also on the table.

If only one person is living in the home post-divorce, it can create resentment about who’s paying what, especially if there isn’t a written plan for handling those expenses.

❌ Con: More chances for conflict after the divorce

Selling a home together takes communication and cooperation. After a divorce, that can be hard.

Smykowski explains that “post-judgment friction can erupt,” especially when one spouse still lives in the house and the other doesn’t. Even simple decisions, like dropping the asking price or scheduling a showing, can turn into battles if one person drags their feet or refuses to cooperate.

If you’ve struggled to agree in the past, it might be harder to manage this together after the divorce is over.

❌ Con: Risk of losing out if the market shifts

Timing matters when it comes to selling a house. Waiting too long could mean selling in a slower season or during a market downturn.

Whitson points out that “if market conditions favor sellers, it may be wise to take advantage and sell while conditions are likely to yield the highest return.”

If the housing market cools while you wait, you could walk away with less money than if you’d sold earlier. This is especially important if you need to use those funds to secure housing or pay down debt.

How to sell a house during a divorce

Selling a house is already a big process. When you add a divorce to the mix, it can become emotionally draining and legally complex. While many steps are the same as a typical home sale, divorcing couples face a unique set of challenges, especially around timing, communication, and legal agreements.

Here’s a clear step-by-step breakdown of what to expect and how to make the process smoother.

1. Connect with a lawyer

Your first step should be speaking with a divorce or family law attorney, even if things feel amicable between you and your spouse. Selling a house during a divorce adds legal layers that a real estate agent alone can’t untangle.

A lawyer can help you:

• Understand your legal rights and responsibilities
• Protect your financial interests
• Draft or review agreements about the sale
• Navigate court approval if needed
• Head off potential disputes before they escalate

In most states, once a divorce is filed, automatic restraining orders go into effect. These orders usually stop either spouse from selling or transferring property. They need a written agreement or a court order to do so.

Choosing the right lawyer means looking for someone experienced in both divorce and property division in your state, and in your local courts. If you and your spouse hire your own attorneys, they will usually talk directly. They will help with the sale process, share documents, and finalize agreements. Their job is to advocate for each of you individually while still helping move things forward.

Mediation can be a helpful alternative or supplement to hiring lawyers, especially if you’d rather avoid court. A mediator is a neutral third party who doesn’t represent either spouse, but instead helps both sides reach agreements on key issues. This can include whether to sell the home, how to price it, who handles showings, and how to divide the profits.

A good mediator can lower stress, speed up the process, and cut legal fees. But, you should still have an attorney check any final agreements before you sign. Some couples choose to use both: a mediator for negotiations, and individual lawyers to review and finalize the legal terms.

By getting the right professionals involved early, you’ll avoid confusion and give yourself a clearer path forward.

2. Hire an experienced listing agent

Once you’ve confirmed that you're legally allowed to move forward with the sale, the next step is choosing a real estate agent — ideally someone with experience working with divorcing couples.

This is not the time to go with a family friend or someone chosen out of convenience. Selling during a divorce comes with emotional and logistical complications that many agents aren't trained to handle. You want someone neutral, highly professional, and comfortable navigating potential disagreements between sellers.

“Many times, parties who are divorcing do not have a lot of trust in each other,” says Richardson. “That can make it difficult to select a broker.”

In rare cases where trust is especially low, each spouse may choose a broker, and those brokers can then agree on a third, neutral listing agent to handle the sale. While this setup is uncommon, it can help ensure both parties feel fairly represented.

More commonly, divorcing couples work together to vet and choose one agent who has:

• Experience with divorce-related home sales
• A track record of strong, clear communication
• Local market expertise
• A reasonable commission rate

Ask potential agents how they’ve handled emotionally complex sales in the past, whether they’ve worked with divorcing couples, and how they plan to communicate equally with both parties. The right agent will treat both spouses fairly and help you keep the sale on track, even if your personal relationship feels off the rails.

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3. Align on a game plan

Once you’ve chosen your agent, the next critical step is getting on the same page with your spouse about how the sale will work. Having a solid, documented plan can help prevent arguments, delays, and last-minute surprises.

At a minimum, you and your spouse should agree on:

• The listing price
• Whether you’ll make any repairs or sell as-is
• How much you’re willing to spend on prep, staging, or upgrades
• How you’ll handle showings (especially if someone is still living in the home)
• Who pays for what (mortgage, utilities, repairs, closing costs, etc.)
• Who will live in the home during the sale
• How you'll review and accept offers
• Where the proceeds will go after closing

“Attorneys and the parties should have very detailed written agreements about the selling process, the parties’ duties and obligations, and what would happen if either party fails to adhere,” says Whitson.

A real estate agent can guide you through property decisions. However, your attorney should write down your agreement. If you're using a mediator, they can also help finalize these terms.

Some couples add a conflict resolution clause to their listing agreement. This is common when communication breaks down. For example, you could write that if there's a dispute over an offer, a neutral third party, like an agent or mediator, will make the final decision.

The more you agree on ahead of time, the smoother the process will be. This way, you’re less likely to end up in court over a rejected offer or a misunderstanding about repairs.

4. Prepare the house for sale

Before listing the home, you'll need to decide whether to make repairs or sell it as-is. This decision depends on the home’s condition, the local market, how quickly you want to sell, and whether you can agree on a budget.

Start by walking through the house and identifying any repairs or updates that might help it sell faster or for more money. Then agree on which fixes to make, how much to spend, and who will manage the process. You’ll also want to agree on who has access to the home for staging or cleaning.

If you’re not seeing eye-to-eye, put everything in writing, ideally with the help of your attorney. Clear communication and agreements can help avoid costly delays down the road.

5. List and market the home

After the house is prepped and ready, it’s time to list it for sale. This part of the process looks a lot like a standard home sale, but divorcing couples often face extra layers of communication and coordination.

Your agent will help you:

• Set a competitive listing price based on market data and comparable homes
• Decide on a listing timeline and strategy
• Arrange for professional photos, home staging, and marketing

Because both spouses still own the home, you'll usually need to sign off together on the listing price and terms. Try to align early on what you're willing to accept in an offer, including whether you’ll allow inspections, contingencies, or cash buyers.

A good agent will walk you through all your options and explain the trade-offs, helping you market the home in a way that attracts serious buyers while meeting both of your goals.

If one spouse is still living in the home, make sure showings are scheduled at times that work for them. Your listing agent can help coordinate this fairly and ensure buyers have access without disrupting your lives more than necessary.

6. Negotiate and accept an offer

As you start to receive offers, your agent will present them to you. They’ll highlight the pros and cons of each one. This includes the price, financing options, closing date, and any contingencies.

You’ll both need to agree on whether to accept, reject, or negotiate. That can be tough when emotions are high or one spouse is less ready to let go.

It helps to have a game plan in place: What’s the minimum offer you’ll accept? Are you willing to negotiate? If multiple offers come in, how will you choose?

This is where your agent’s communication skills really matter. They can act as a neutral go-between, reduce friction, and help avoid situations where one person stalls or disagrees just to regain control.

If you hit a disagreement you can’t resolve, your attorney or mediator can step in to help facilitate the decision.

Sometimes, it also helps to bring in a neutral appraiser or a third-party opinion if you can’t agree on what the house is worth or how to respond to low offers.

7. Close and divide the proceeds

Once you’ve accepted an offer, your agent will move you into the final phase: closing the sale.

That includes:

• Scheduling inspections and appraisals
• Confirming payoff amounts for your current mortgage(s)
• Signing legal documents to transfer ownership
• Paying off closing costs, debts, and agent commissions

Most states require both spouses to sign the final closing documents, even if only one of you has been managing the process. If you haven’t already done so, this is also when you’ll finalize how the proceeds are split.

If you already have a divorce agreement in place, it should outline how much each person gets. If you don’t, the money is usually held in an escrow until an agreement is reached.

To avoid confusion, make sure the following is all in writing before closing:

• Who pays any outstanding repairs or other costs
• Which attorney holds the net proceeds (if not distributing right away)
• How funds will be divided, or when that decision will be made

After everything is signed, you will get your share. If not, your attorney will hold it until your divorce settlement is done.

Even though it’s the last step, closing can bring up big feelings. Try to be kind to yourself and your co-seller as you move through it. Selling a home is emotional even in the best of times.

Final considerations for selling a house in a divorce

Even with a plan in place, selling your home during a divorce can be one of the most emotionally and logistically complex steps in the process. Below are some tips and final insights from experts to help you navigate the process.

Legal and logistical tips

• Put everything in writing early. This includes how you’ll choose a realtor, make repairs, accept offers, and divide proceeds. “There needs to be an agreement in writing that details how the house will be sold and what is happening with the proceeds,” says Richardson.
  
• Understand your state’s restraining orders, if they have them. In many states, automatic orders keep either spouse from selling or transferring marital property once they file. They need written consent or court approval to proceed.
  
• If you can’t agree, the court may step in. This can mean appointing a professional,  neutral party to handle the sale. Owensby adds that a judge may also assign a third-party real estate agent if the parties can’t cooperate.
  
• Communicate equally and clearly. All offers should be shared with both parties at the same time. “Leaving issues unresolved only invites delays and added costs,” says attorney Ladah.
  

Financial and tax tips

• Talk to a tax advisor before finalizing the sale. Timing can impact your eligibility for the full $500,000 capital gains exclusion. Make sure you don’t put yourself in a position where you end up owing taxes you didn’t expect.
  
• Clarify who will pay for repairs and staging. If you're planning to sell, budget ahead and put expectations in writing.
  
• Track mortgage payments. If one spouse has been paying the mortgage alone, that may be considered when dividing equity.
  
• If needed, hold sale proceeds in escrow. “It’s possible to agree that the sale can proceed while the divorce is pending but also agree that the proceeds will be held until the divorce is finalized,” says Coker.
  

Emotional and personal tips

• Try to separate memories from the asset. Selling a home can feel like a second loss, but doing so with a clear plan can offer closure.
  
• Don’t rush unless you’re ready. If emotions are high or your finances aren’t clear, talk to your lawyer or mediator about the best timing.
  
• Work with a professional who understands divorce. A neutral, experienced listing agent can help reduce tension.

Key takeaways

• Selling a house during a divorce is absolutely doable. In many cases, it may even simplify the entire process.
  
• Legal restrictions, financial concerns, and emotional baggage can complicate things fast. The right support team is crucial.
  
• Lean on a real estate agent with divorce experience, a qualified attorney or mediator, and a solid written agreement to help keep things clear.
  
• Plan well and work together. This way, you can protect your equity, avoid long fights, and move ahead.

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