Divorce is never easy, and when a home is involved, the process can get even more emotional and complicated. Whether it’s the family home where you’ve built memories or a jointly owned property, deciding what to do with real estate during a divorce is one of the biggest decisions a couple can face.
If you’re currently navigating a separation and wondering what your options are regarding your home, here’s a breakdown to help you make an informed and strategic decision.
1. Sell the Home and Split the Proceeds
This is often the cleanest and most straightforward solution. Selling the home gives both parties a financial fresh start. The proceeds from the sale can be split based on what’s agreed upon in the divorce settlement—typically 50/50 or according to each person’s contribution or legal agreement.
Pros:
No ongoing ties to the property or mortgage
Cash in hand to move forward
Easier to divide assets fairly
Tip: Work with a real estate agent who has experience with divorce sales to help keep things professional and neutral.
2. One Spouse Buys Out the Other
If one person wants to keep the home (maybe to stay close to the kids’ school or for emotional reasons), they can buy out the other’s share. This typically involves refinancing the mortgage under one person’s name and paying the other their share of the equity.
Pros:
Continuity for children and family life
Keeps a familiar home environment
Cons:
One spouse must qualify for the mortgage independently
May require a significant amount of cash or financing
3. Co-Own the Property Temporarily
Some couples agree to keep the home jointly for a period of time—especially if children are involved—before selling it at a later date. This might mean one person lives in the home while both still pay the mortgage, or it might involve renting it out for income.
Pros:
Stability during the transition
May result in a higher future sale price
Cons:
Requires clear communication and cooperation
Financial entanglement continues after the divorce
4. Rent Out the Home
If selling right away isn’t ideal, renting the property could generate income that’s split between both parties. This can be a good short-term solution while the market stabilizes or legal matters are finalized.
Pros:
Generates cash flow
Keeps the property as a shared investment
Cons:
Requires joint management or agreement on hiring a property manager
Involves ongoing coordination and shared decisions
Things to Consider:
Mortgage obligations: Even if one person moves out, both parties may still be liable for the loan unless it’s refinanced or assumed.
Emotional attachment: Make sure decisions are made based on long-term financial stability, not just short-term emotions.
Tax implications: Capital gains, mortgage interest deductions, and property taxes can all be impacted. Always consult a tax advisor or financial planner.
Legal guidance: Work with an attorney or mediator who can help structure a fair and enforceable agreement regarding the home.
Final Thoughts
Navigating the future of a shared home during divorce can be one of the most challenging aspects of separation. There’s no one-size-fits-all answer, but with the right support—both legal and financial—you can make a decision that protects your well-being and sets you up for a stronger future.
If you’re considering selling your home during a divorce and want to understand your options, we’re here to help. Our team specializes in sensitive real estate situations and can offer a no-pressure consultation to guide you forward.
Contact us today to explore your best next steps.