Last year, I worked with a couple who was going through a divorce. We collectively decided that the best option was for them to both move out of their co-owned home and into rentals prior to listing. The vacant home was staged beautifully, and I was able to show it freely without disrupting their daily lives. Doing it this way alleviated a ton of stress for the homeowners. One year after selling and moving in their separate rentals, they were both able to purchase their own homes.
When it comes to selling a home during divorce, there’s no one-size-fits-all answer on what timing is best, but there are clear pros and cons that can help you make the smartest move.
The #1 Question: Is it better to sell the house before or after a divorce?
First, let’s look at the tax implications.
If you’re still legally married when you sell your primary residence, you may be eligible for up to $500,000 in capital gains tax exclusion, which is a significant financial advantage. If you sell after the divorce and you’re now filing separately, each of you can only exclude up to $250,000, assuming you each meet the IRS’ ownership and residency requirements individually.
On top of that, selling the house before the divorce is final can simplify the entire process: you sell the asset, split the proceeds, pay off the mortgage, and move on with fewer lingering ties and legal complications.
But selling early isn’t always the best option, especially if emotions are still running high or you’re in a cooler market. And if one partner is still living in the house, he or she might need more time to line up a new place or keep things stable for the kids.
You may also be interested in: 5 Mistakes to Avoid When Selling Your Home During Divorce
Pros of selling the house before the divorce
1. You may save big on taxes
The capital gains exclusion of $500,000 is one of the biggest financial upsides of selling before you’re officially divorced.
Let’s say your house sells for $1 million and your original purchase price was $400,000. That’s a $600,000 gain:
- If you’re still married and file jointly: you could exclude up to $500,000, so only $100,000 of the gain is taxable.
- If you’re divorced and sell later: each person can exclude only $250,000, but only if both qualify individually. That same $600,000 gain could mean $100,000 or more is taxable, especially if only one spouse lived in the home recently.
2. Less paperwork and fewer legal fees
Selling before you split means you can often share an agent, agree on terms together, and reduce the back-and-forth through attorneys, saving both time and money.
3. You eliminate shared debt sooner
Once the house sells, you both walk away with your share and no more joint expenses like the mortgage, utility bills, and maintenance.
4. More negotiating power
Buyers can smell desperation. If they think the sale is divorce-driven, lowball offers tend to follow, so a united front usually gets a better price.
5. Emotional closure
For many, the home represents the marriage. Letting it go can be a necessary step toward emotional closure and creating space for what’s next.
You may also be interested in: Real Estate During Divorce: What Happens to the House?
Cons of selling the house before the divorce
1. It can delay the divorce
In slower markets, it could take months to find the right buyer. Your divorce may be on hold until that final check clears.
2. You risk rushing into a sale
If things are heated, decisions might be made emotionally, not strategically. That can mean leaving money on the table.
3. Increased stress
Selling a home is already stressful. Add divorce on top, and it can feel overwhelming, so it’s a lot to juggle all at once.
My clients, Jennifer and Thomas, were going through a divorce. We collectively decided that the best option for them was to both move into rental properties prior to listing and show the home vacant. This alleviated a ton of stress and was the least disruptive to their daily routine, and the home was able to be staged beautifully.
One year after selling and moving into their rentals, they were both able to purchase their own homes!
4. Kids and family adjustments
Moving mid-divorce can create extra upheaval for kids or other family members (or even pets) living in the home.
Pros of selling the house after the divorce
1. More time to plan
Once emotions settle and roles are clearly defined, you may be able to make better, business-focused decisions about the sale.
2. Potentially higher home value
If you can hold onto the home and the market improves, waiting could put more money in your pocket.
3. Flexibility to relocate or rent first
You might need time to decide where to live next, line up financing, or wait for your kids to finish school.
4. Separation of finances
With the divorce settled, each person’s financial responsibilities are clearer, which can make co-managing the sale easier.
Cons of selling the house after the divorce
1. You may lose tax advantages
If you sell your home after the divorce is final, you could lose out on a major tax break, as explained above. That means if your home has appreciated significantly, selling after the divorce could result in a higher tax bill, especially if only one of you qualifies for the exclusion.
2. You’re still financially tied
Until the home sells, both parties are usually still responsible for mortgage payments, maintenance, and unexpected costs.
3. One spouse may not cooperate
If one person refuses to sell or delays repairs and showings, it can sabotage the process entirely.
4. Emotional drag
Still being tied to a shared asset after a divorce can keep both parties from fully moving on.
So, what’s right for you?
There’s no universal answer to the question, is it better to sell a house before or after divorce? It depends on your timeline, finances, emotional state, and relationship with your soon-to-be ex.
But here’s the good news: You don’t have to figure this out alone.
As a Holly Springs Realtor who’s helped many couples navigate buying and selling their homes during a divorce, I can guide you through your options with clarity, empathy, and zero pressure. Whether you decide to list now or later, I’ll help you make a smart, informed choice, at your pace, on your terms.
Reach out today for a low-pressure, no-judgment conversation.