A divorce does not automatically mean the house is split 50/50. When you are selling a house during a divorce in Reading, the key questions are how much equity the home has, whether to sell or have one spouse buy out the other, and how that decision fits with the rest of the settlement and the children's needs. This guide explains how the marital home is handled in a Massachusetts divorce, for families in Reading and throughout Middlesex and Essex Counties.
Key Takeaways
- Massachusetts divides marital property, including the home, by equitable distribution: fairly, but not necessarily equally.
- Equity is the home's market value minus the mortgage and any other liens. Selling costs reduce what is actually left to divide.
- The main options are to sell and divide the proceeds, have one spouse buy out the other, or keep joint ownership for a set period.
- Once a divorce is filed, an automatic restraining order generally prevents either spouse from selling the home without the other's written consent or a court order.
- The timing of a sale can affect the federal capital-gains exclusion, so get tax advice before you list.
How Is the House Divided in a Massachusetts Divorce?
Massachusetts is an equitable distribution state. Under M.G.L. c. 208, § 34, the Probate and Family Court considers a list of factors, including the length of the marriage, each spouse's income and earning capacity, contributions to the marriage (including as a homemaker), and the needs of the children, in deciding how to divide the marital estate. The home is usually the largest asset, so how it is handled often shapes the rest of the settlement. It does not matter only whose name is on the deed.
To find the equity, start with the home's fair market value and subtract the mortgage balance and any home equity line or other liens. For example, a home worth $600,000 with a $250,000 mortgage has $350,000 in equity before selling costs. If the equity were divided equally, each spouse would receive half of what remains after the mortgage and costs of sale are paid. In many cases, though, the division is not equal, or the home is offset against other assets such as retirement accounts.
Agreeing on Value
A professional appraisal gives both spouses a neutral starting point for negotiating a sale price or a buyout. If the spouses' appraisals differ, they can negotiate, use a jointly selected appraiser, or ask the court to decide the value. A buyout based on an unsupported number often leads to a dispute later.
Sell, Buy Out, or Keep the House?
Selling and Dividing the Proceeds
When the home is sold, the mortgage and closing costs are paid at closing, and the net proceeds are divided under the parties' agreement or the court's judgment. Selling gives each spouse funds for new housing and ends joint responsibility for the mortgage.
Buying Out the Other Spouse
In a buyout, one spouse keeps the house and pays the other for his or her share of the equity, often through a refinance that also removes the departing spouse from the mortgage. The spouse keeping the home must be able to qualify for the loan and afford the mortgage, taxes, insurance, and repairs alone. For a deeper look at this option, see our guide to keeping the house in a divorce in Reading, MA.
Delaying the Sale
Some parents agree to keep joint ownership until a set date, such as when the youngest child finishes school, and then sell or complete a buyout. This keeps the children in familiar surroundings but extends shared financial responsibility, so the agreement should spell out who pays what, who makes repairs, and what happens if payments are missed.
Can One Spouse Refuse to Sell the House?
A spouse can refuse to agree to a sale, but that does not end the matter. If the parties cannot agree, the Probate and Family Court can decide what happens to the home as part of the division of property, including ordering it sold, setting terms for listing and accepting offers, or awarding it to one spouse with a payment to the other.
While the house is on the market, both spouses should agree in writing on the listing price, the real estate agent, access for showings, how offers will be accepted, and who pays the mortgage and other carrying costs until closing. Both spouses who own the home generally must sign the deed at closing unless a court order provides otherwise.
Can You Sell the House Before the Divorce Is Final?
Yes, if both spouses agree. But once a divorce complaint is filed in Massachusetts, an automatic restraining order generally prohibits either spouse from selling, transferring, or encumbering marital assets, including the home, without the other spouse's written consent or a court order, apart from limited exceptions. A sale before the divorce is final should be documented in a written agreement that also says how the proceeds will be held or divided.
Remember that moving out does not end your responsibility for the mortgage. If both spouses are on the loan, both remain liable, and missed payments can affect both credit reports, until the loan is paid off or refinanced.
Tax Considerations When Selling the Marital Home
Under federal tax law, a married couple filing jointly may be able to exclude up to $500,000 of gain on the sale of a primary residence, while a single filer may exclude up to $250,000, if the ownership and use requirements are met (generally, owning and living in the home for at least two of the five years before the sale). Because the exclusion can change after the divorce, the timing of the sale may matter if the home has gained significant value. Special rules can apply when one spouse moves out under a divorce or separation agreement. Talk to a tax advisor before you list the house.
Children, Custody, and the Marital Home
The housing decision affects children's routines as much as it affects the parties' finances. Consider the children's schools, activities, and the travel time between two households under the parenting schedule. Selling may give each parent enough to buy or rent a home near school, while a buyout or delayed sale may keep the children in familiar surroundings. Learn more about custody types in Massachusetts and how child support is calculated.
Talk to a Reading, MA Divorce Attorney
The Law Offices of Matthew T. Desrochers, P.C. helps clients in Reading and throughout Middlesex and Essex Counties decide whether to sell, keep, or buy out the marital home, and how that decision fits into the overall divorce settlement. Learn more about our divorce services, see our overview of divorce in Massachusetts, call (781) 279-1822, or contact us online to schedule a consultation.
Frequently Asked Questions
Is the house always split 50/50 in a Massachusetts divorce?
No. Massachusetts uses equitable distribution, so the court divides marital property fairly based on statutory factors, which may or may not mean equally.
Can my spouse refuse to sell the house?
Your spouse can refuse to agree, but the Probate and Family Court can decide what happens to the home, including ordering a sale or awarding it to one spouse with a payment to the other.
Can I keep the house without refinancing?
Possibly, but your spouse would remain liable on the existing mortgage. Many settlements require the spouse who keeps the house to refinance by a set date so the other spouse is released from the loan.
Can we sell the house before the divorce is final?
Yes, if both spouses agree in writing. After a divorce is filed, an automatic restraining order generally bars selling the home without the other spouse's consent or a court order.
Do both spouses have to sign at closing?
Generally, every owner on the deed must sign, unless a court order provides otherwise.
Should I sell or buy out my spouse?
It depends on whether you can qualify for a loan and afford the home on your own, what other assets are available to offset the equity, and what is best for the children. A lawyer can help you compare the options within your overall settlement.
This article provides general information about Massachusetts law and is not legal advice. Reading it does not create an attorney-client relationship. Every case is different; contact an attorney about your specific situation. Attorney Advertising.