Imagine Jane and Mark, long-time Raleigh-area homeowners who decide to divorce. The house has grown in value over the years; they have two kids, and equity built up. Jane wants to stay in the home so the children can stay in the same school and community. Mark is okay moving on. But they haven’t yet talked about how the home will be treated, who pays the mortgage, who gets the equity, and how it affects their future budgets.
Why your real estate decisions matter in a divorce
Your home or other properties often represent the single largest marital asset. Choosing what happens to that property will affect the division of assets, debt obligations, future housing costs, tax return, and even child-oriented decisions. With the right guidance, you can steer these decisions in a way that supports your next chapter. I’m not a financial advisor, but I have been through a divorce myself, and I have qualified as a certified divorce specialist, so I do have some insider knowledge of your options.
Real estate implications in the North Carolina Triangle area
Many areas in Wake County and the Triangle have seen strong home-value appreciation over the last decade. For a divorcing couple, that means greater equity to split, but also higher future housing costs for one spouse who’s trying to stay in the home.
If one spouse wants to keep the home (often for the children’s stability), they’ll likely need to refinance, assume debt, and carry maintenance and tax burdens alone. With many couples holding mortgages that have a lower rate than what is currently available, a refinance can squeeze your budget.
If instead a couple decides to sell their home and divide the proceeds, both spouses must plan for where they’ll live next. One spouse may need to find a smaller home or rent while they rebuild.
Key decisions and what to watch out for
Here are some options to consider and discuss with your ex-partner, attorney, and financial advisor.
Sell the home and divide the equity
This is often the cleanest path. List the house, pay off the mortgage, cover closing costs, and then split net proceeds as agreed.
Pros: Both spouses get out of the joint asset; less risk of one being left responsible for all costs.
Things to watch: Market timing (if values drop, the proceeds shrink) and tax basis (when you sell, capital-gains or other tax exposure may appear). And while transfers between spouses may be non-taxable under §1041, future sales still matter.
You may also be interested in: Is It Better To Sell the House Before or After a Divorce?
One spouse stays in the home (buy-out)
Often one partner (say the one with primary custody of kids) wants to remain for the sake of school and stability. In that case, one may buy out the other spouse’s share, refinance the mortgage solely in his or her name, and take over the costs.
Pros: Continuity for kids, simpler household transition.
Things to watch: Can the staying spouse qualify for a refinance at current rates? Will his or her income alone support the mortgage + taxes + insurance + maintenance + share of the split? If rates are high, it may strain the budget.
Deferred sale / joint ownership post-divorce
Sometimes couples agree to hold on to the home together for a specified period (kids finish school or market improves). One might live there and pay a larger share, or they decide to rent it out.
Pros: Takes advantage of future appreciation or avoids selling in a weak market.
Things to watch: One spouse may end up making payments for longer than desired.
Consider the tax and debt implications
Divorce isn’t just splitting assets. There are debts, mortgages, and tax factors.
- For the home: Is the mortgage in both names? If the staying spouse assumes it, what happens to the credit of the departing spouse?
- Tax side: While transfers between spouses may avoid immediate gain, future sale may trigger taxable gain. The home-sale exclusion (§121) may apply.
- Local property tax: Wake County and surrounding areas have recently seen increases of tax bills, which may affect the affordability of staying in place.
- Maintenance and unexpected costs: Older homes in the Triangle can surprise one spouse if repairs (e.g. roof, HVAC, termite treatment, etc.) aren’t budgeted.
You may also be interested in: 5 Mistakes to Avoid When Selling Your Home During Divorce
How a Realtor with divorce specialization adds value
When we sit down, I’ll ask you the important questions to help you make a good decision about your future home and real estate. For example:
- If you stay in the house, can you qualify for a mortgage on your own? What will your monthly payment be?
- What happens if you can’t keep up with the mortgage payments or repairs by yourself?
- If you sell, what will you net after mortgage payoff, selling costs, and division? Will that be enough for you to buy a suitable home on your own?
- What are your housing options if you leave the marital home? Rent? Buy something smaller?
- What are the tax consequences of whichever option you pick? Do you know the basis and future tax liability?
- What if the housing market in your town drops or interest rates go up before the sale happens?
- Does staying in the school district or neighborhood matter, and are you willing/able to take on potentially higher costs for that continuity?
- Is your agreement flexible enough to handle changes (job loss, changes in interest rate, new expenses, etc.)?
You might also be interested in: Expert Tips from a Divorce Real Estate Specialist
Divorce is emotionally tough, so get the help you need
Real-estate decisions add a layer that is both practical and significant. But if you work with an experienced Realtor (that’s me!), an attorney, and perhaps a financial advisor, you can map out a plan that aligns with both your family’s emotional needs and your financial future. I’d love to walk through your property situation, look at current market data, and help you craft a path that supports your next chapter with confidence.