Selling a house after divorce can come with issues that don’t exist in a typical home sale.
Your divorce judgment or settlement might require you to sell the home by a certain date.
One spouse might remain in the house for a period of time before you sell it, or your agreement might delay the sale until a certain event occurs.
But even when the final terms say what should happen, carrying them out can create new problems.
Both names might still be on the title or mortgage.
Your ex could refuse to cooperate with a required sale.
Or you may not know how much time you have to sell.
Some of these issues are much easier to address when you anticipate them upfront rather than discover them afterward.
If you’re considering selling before the divorce is over, our guide to selling a house during a divorce explains what to know while the case is still pending.
Here’s what you need to know if you plan to sell a house after a divorce.
How long do you have to sell a house after divorce?
There isn’t a single deadline that applies to everyone.
If your final judgment, settlement agreement, or another court order requires you to sell the house, it will usually determine when.
You might need to list the house within a certain number of days, complete the sale by a specific date, or put it on the market after a particular event.
For example, your agreement might delay the sale until a child finishes school or until the spouse living in the home has had a certain amount of time to move.
Pay attention to whether the terms give you a deadline to list the house or actually complete the sale.
Those aren’t the same thing.
You can control when you list the property, but you can’t always control how long it takes to find a buyer and close.
The final terms should clearly define the timing and any event that triggers the sale.
There’s no nationwide rule that requires you to sell the property within a certain timeframe after divorce when the terms don’t include a deadline.
But don’t assume that means you can postpone the sale indefinitely.
Talk with your divorce attorney about what the existing terms require if the language is unclear or a deadline is approaching or has already passed.
Do you have to sell your house after divorce?
A divorce doesn’t automatically require you to sell the house.
If your divorce judgment or settlement requires you to sell, it’s important to understand how those terms can affect the sale.
If your divorce judgment or settlement requires the house to be sold
Former spouses may still need to sell the house after the divorce is over.
Your final terms can affect several parts of the sale, including:
- Who pays the mortgage and other costs: The agreement may say who is responsible for certain expenses until closing.
- Who can live there until closing: This can affect showings, the move-out date, and when the buyer can take possession.
- How the proceeds are divided: The money isn’t always split evenly between both spouses.
The sale price is not the amount you and your ex will divide.
The mortgage balance, other liens, and selling costs come out first to determine the net proceeds.
Your final terms may also give one spouse a credit or reimbursement before you divide the remaining money.
Look for any other requirements that could affect the sale, such as signing documents or providing access to the property.
If something is unclear, it’s better to address it before you list the house.
If the sale is delayed until a future date
A lot can change by the time you sell the house after the divorce.
The home could be worth more or less by then.
One spouse may have paid down the mortgage or spent money on a major improvement.
That can affect how much equity you have when you eventually sell the house.
Your final terms should explain whether either spouse gets credit for those contributions and how you’ll divide any increase or decrease in equity.
Keep records of mortgage principal payments and major improvements if they could affect how you divide the proceeds.
You don’t want to reach the sale later and have to argue about who paid for what or how to divide the additional equity.
What if the house is still in both names after divorce?
Both of you can still have your names tied to the house even after your divorce is over.
The important thing is knowing where each name still appears.
You’ll want to check the divorce judgment, deed, and mortgage.
The judgment tells you what should happen with the property.
The deed identifies who holds title to the property.
And the mortgage shows who is responsible for the loan.
Those three things don’t always match after a divorce.
For example, the judgment may award the house to one spouse even though both names remain on the deed or mortgage.
Taking someone off the deed doesn’t automatically remove them from the loan either.
That may require a refinance, loan assumption, or release of liability from the lender.
Check all three before you put the house on the market.
If you and your ex are still on the title, you both may need to participate in the sale or sign documents at closing.
Finding that out early is much easier than discovering you need your ex’s signature when you’re already trying to close.
What if your ex refuses to sell the house after divorce?
An ex can hold up a required sale in several ways.
They might refuse to sign documents or allow access to the home.
They could ignore an offer or miss a deadline in the judgment or settlement.
What matters is whether the divorce terms address the action they’re refusing to take.
If they do, your attorney might be able to ask the court to enforce that part of the order.
But not every disagreement means your ex is violating it.
The judgment may require you to sell the house without explaining how to resolve a disagreement over an offer or another decision.
That type of gap may need clarification from the court instead.
Save anything that documents what’s preventing the sale from moving forward, including missed deadlines, unanswered requests, and documents your ex refuses to sign.
Don’t wait until you have a buyer or are approaching closing to deal with an obvious problem.
Addressing the dispute early can prevent it from holding up the sale later.
What are the tax implications of selling a house after divorce?
Selling after a divorce doesn’t automatically mean you lose the home-sale tax exclusion.
A qualifying homeowner may be able to exclude up to $250,000 of the gain from federal income taxes.
There are also special rules for divorced homeowners.
Moving out, for example, doesn’t always mean you lose credit for the time you lived in the house.
That time may count as if you lived in the home too if you still own it and your former spouse lives there as their main residence under a qualifying divorce or separation instrument.
Another rule can help if your former spouse transfers their share of the house to you as part of the divorce.
The time they owned the property can generally count toward the time you need to own the home.
The tax basis is where things can get confusing.
If you paid your ex for their share of the house, you might assume that amount — or the home’s value at the time — becomes your new starting point for calculating taxes later.
That usually isn’t how it works.
You generally take over the tax basis your former spouse had in the share they transferred to you.
For example, suppose you and your ex have a combined adjusted basis of $400,000 in the home, with each of you owning half.
If you pay your ex $300,000 for their share as part of the divorce, your total basis generally remains $400,000 — not $500,000.
Your basis is important because it helps determine how much taxable gain you have when you eventually sell.
Make sure you have paperwork showing what the home originally cost, qualifying improvements made over the years, and the transfer of ownership from your former spouse.
A tax professional can use that information to calculate your basis, determine your gain, and see how much of it may qualify for the exclusion.
Getting the right help when selling a house after divorce
A post-divorce home sale can involve more than one type of professional.
Your real estate agent can handle the pricing, marketing, negotiations, and the sale itself.
Questions about what your divorce judgment requires should go to your divorce attorney.
And questions about basis, gain, and the home-sale exclusion belong with a tax professional.
Knowing who should handle each issue can help you keep the real estate, legal, and tax pieces separate.
Once those issues are squared away, you can focus on the normal steps to selling a house.
If you’re ready to sell, SoldNest can match you with a top local listing agent who meets our vetting standards and fits what you’re looking for.
