Selling a Home During Divorce in Massachusetts

Deciding what to do with the house is often one of the hardest parts of a divorce. The home holds memories, it may be where the children feel settled, and it is often the largest asset a couple owns. This guide explains the choices, who makes the final call in Massachusetts, and the money and tax questions to ask. Our goal is to give both spouses clear, neutral information so the decision is easier.

Your three main options

Who decides?

Most couples decide together, often with help from their attorneys or a mediator. Their written separation agreement then becomes part of the court’s judgment. If spouses cannot agree, a judge of the Probate and Family Court decides how to divide property.

Massachusetts does not require an automatic 50/50 split. Under General Laws chapter 208, section 34, the judge looks at many factors, including:

• How long the marriage lasted, and each spouse’s conduct during it
• Each spouse’s age, health, job, income, skills, and debts
• Each spouse’s chances of earning income and building assets in the future
• The present and future needs of the children
• Each spouse’s contributions to buying and keeping up the home, including contributions as a homemaker

The automatic restraining order: do not sell without agreement

As soon as a divorce complaint is filed in Massachusetts, an automatic restraining order applies under Supplemental Probate and Family Court Rule 411. It takes effect for the person filing when the complaint is filed, and for the other spouse when they are served. While it is in place, neither spouse may sell, transfer or borrow against real estate or other property, except in limited cases such as:

• A written agreement of both spouses, or
• An order of the court.

This means a sale during a divorce should be agreed to in writing, or approved by the judge, before you sign a listing agreement or a Purchase and Sale Agreement. Your attorneys can prepare a short stipulation for this.

Making a sale go smoothly

A home sale during a divorce works best when both spouses get the same information at the same time. Our team keeps things neutral:

1. One shared pricing review. Both spouses see the same market analysis. See our guide on pricing your home.
2. Equal communication. We copy both spouses (and their attorneys, if requested) on offers and updates.
3. Clear showing rules. If one spouse still lives in the home, we agree in advance on showing times and notice.
4. Written decisions. Price changes and offer acceptances are signed by both owners.

At closing, the attorney pays off the mortgage and any liens, then pays the costs of sale. The net proceeds can be split at closing or held in escrow, as your agreement or court order says. Learn about typical seller closing costs in Massachusetts.

Buying out your spouse and refinancing

A buyout usually starts with a fair value for the home. Many couples use an appraisal or a broker’s market analysis. The basic math looks like this:

• Current market value
• Minus the mortgage balance and any home equity line
• Equals the equity, which is then divided as agreed

The spouse keeping the home usually refinances into their own name. This matters because signing a deed to give up ownership does not remove someone from the mortgage. Until the loan is refinanced or paid off, both spouses can remain responsible to the lender. A lender will review the remaining spouse’s income, credit and debts. Child support and alimony can affect what the lender counts. Talk with a lender early. Our guide to credit and pre-approval explains what lenders look for.

Taxes to ask your CPA about

The federal home sale exclusion can save a lot of money. The IRS lets you exclude up to $250,000 of gain on the sale of your main home, or up to $500,000 if you file a joint return. To qualify, you generally must have owned and lived in the home as your main residence for at least 2 of the 5 years before the sale.

Divorce adds a few special rules, according to IRS Publication 523:

• If your spouse or former spouse transferred the home to you, you can count the time they owned it as time you owned it. You must still meet the residence test on your own.
• If you still own the home but your former spouse lives there under a divorce or separation agreement, you can generally treat the home as your residence for the use test.

A transfer of the house between spouses as part of a divorce is generally not treated as a taxable sale. But the spouse who keeps the house usually keeps the original tax basis too, which can mean a larger taxable gain when they sell later. Timing the sale, and whether you file jointly that year, can change the result. Read more in our capital gains guide.

Taking care of yourself through the process

Selling during a divorce can feel overwhelming. A few things help:

• Keep conversations about the house focused on facts and dates.
• Let your attorneys handle legal disputes, and let us handle market questions.
• Think about where you will live next. If you plan to buy again, it helps to get pre-approved before the sale closes.

How Luis can help

Luis and our team work with both spouses and their attorneys in a calm, neutral way, with the same information shared with everyone. We can provide a market value for a buyout or a sale and guide you through each step in English or Spanish. Start with a free, confidential 15-minute call through our contact page.