Selling a House After Divorce Agreement | Redy

Mar 13, 2023 9:00:00 AM / by Zak Bretherton

Selling A House After A Divorce

A divorce is emotionally and financially exhausting. The couple must make many critical decisions about what to do with their marital assets, including their home. Selling a house after a divorce can be a challenging and complicated process. In this blog, we'll review the most essential things to consider when selling a home after a divorce.

Need to Sell the House After a Divorce?

The marital home is often the couple's largest purchase, so you must handle its division carefully. Contacting a professional real estate agent is a critical first step in selling a house after finalizing a divorce. A real estate agent will provide an unbiased assessment of the property's value, which is essential when determining how to divide the asset. An agent can also help to facilitate negotiations between spouses and ensure that each party receives a fair settlement.

House Options When Going Through a Divorce

When selling a house after divorce, there are several options for the divorced couple to consider:

Divide Large Assets

Divide large assets such as the car, securities, retirement benefits, collectibles, etc. Both parties must agree to the allocation of the assets.

Buy Out the Other Party

If one party has a profound connection to the home, they may choose to buy out the other party. The purchasing party can do this by refinancing the mortgage in their sole name or by leveraging other financial resources to pay off the other party's share.

Co-own a Divorce Home

Divorcing couples might also choose to co-own their home after finalizing a divorce. This alternative typically occurs when neither party wishes to sell the property or if selling it would negatively impact their interests. With this agreement, both parties continue to split mortgage payments, property taxes, and maintenance costs.

Sell the Marital Home

Selling a home after a divorce agreement is often the most straightforward and practical option. This option allows both parties to keep their equity share and use the proceeds to buy a new home.

unlock the hidden value of your home

Pros and Cons of Selling a House After a Divorce Agreement


  • Great Payout: Selling a home after a divorce settlement could result in a substantial return. The parties can then divide and use the transaction proceeds as they see fit.

  • Increased Value: If you've taken care of the house and kept it in good condition, its value will likely rise over time. You'll likely sell the property for more than you paid for it. 

  • Favorable Market: In a seller's market, you're more likely to receive a decent price for your house. This is especially true if you live in a desired neighborhood.

  • Tax Exclusion: You can defer up to $500,000 in capital gains tax if you sell while still married. Otherwise, you're exempt from capital gains tax of up to $250,000. Selling before finalizing your divorce can save a lot of money on taxes. 


  • Children, Your Job, Etc.: When selling a house in a divorce, consider how the sale will affect other aspects of your life. If you have children, you might want to keep them in the same school district or near their friends. Selling your property may also mean relocating to another region, which could affect your job.

  • May Cause Additional Problems: While selling your home may seem like a great solution, it can cause other issues. For example, you may owe money after the sale if you don't have enough equity in your home. Depending on the current real estate market, you may also struggle to find a buyer or get a fair price for your home.

Tax Implications of Selling the Marital Home

When selling your house after a divorce, keep these tax implications in mind:

Selling the Home as a Couple

If you and your spouse have lived in the marital home for at least two of the previous five years, you may be entitled to a full exclusion of up to $250,000 per individual or $500,000 per couple when selling the marital home. Any earnings from the property sale are not subject to taxation up to these limits.

Selling the Home During the Divorce

If you are divorcing and selling your home, you should wait to finalize the divorce until you've completed the sale and filed your taxes jointly. This allows you to claim the $250,000 tax exemption per individual or $500,000 per couple.

Selling the Home After the Divorce

If you sell your house after finalizing the divorce, you can still claim the entire $250,000 exclusion as long as you meet the two-year residency requirement.

unlock the hidden value of your home

Steps to Selling a House After a Divorce Agreement

Here are five essential steps to follow when selling a house after a divorce agreement:

Pick an Agent

Selecting the right real estate agent is critical for selling your home successfully. Look for an agent who has sold properties in your area and has a proven track record of selling homes quickly and at a decent price. Not sure where to start? Redy allows homeowners to easily compare proposals from real estate agents who want to represent their home sales. 

Set an Asking Price

Your real estate agent will help you determine a realistic asking price through a comparative market analysis (CMA). CMAs compare your home's features, size, and location to those of recently sold houses in your area and use the data to suggest a suitable price.

Prepare to Show the House

To make your home more desirable to potential buyers, you must prepare it for showings. This typically involves decluttering, thoroughly cleaning your property, and making minor repairs. Your real estate agent can advise you on how to make your house most appealing to buyers.

Review Offers

Once offers come in, your agent will help you review them and negotiate with prospective buyers. You should evaluate the offered price, the buyer's financing and contingencies, and the closing timeline.

Divide the Cash

After the sale closes, you'll need to allocate the funds as determined in the divorce agreement. If you and your ex-spouse jointly own the residence, you must agree on how to split the earnings.

Immediately after a divorce, find a reputable real estate agent to discuss your options for selling your house. Get started today with Redy! 

To learn more about selling your home, visit our Home Seller Resources >

Recent Posts