Selling a House During a Divorce in New York

This page is general information about New York, not legal, tax or financial advice. Laws and local rules change, and every situation is different. Talk with a New York attorney, tax professional or HUD-approved housing counselor about your own circumstances.

How New York treats the marital home

New York divides marital property by equitable distribution, which means fairly, though not always 50/50. A house bought during the marriage is usually marital property, even if only one spouse is on the deed. A house one spouse owned before the marriage may be separate property, although things like paying the mortgage with marital money can complicate that. Your attorneys will sort out who is entitled to what.

Married couples who own a home together in New York usually hold it as tenants by the entirety. In general, both spouses must sign to sell it, and courts typically can’t force a sale of a home held that way before the divorce judgment unless both spouses agree.

The automatic orders

When a divorce is filed in New York, automatic orders take effect. Among other things, they bar either spouse from selling or transferring property, including real estate, without the other spouse’s written consent or a court order. So if you want to sell while the divorce is pending, put the agreement in writing with both attorneys involved.

Your options for the house

• One spouse keeps it and buys out the other, usually by refinancing into their own name.
• Sell it and split the proceeds, either by listing it or by selling it directly for cash.
• Keep it for a while and sell later, for example after children finish the school year. This keeps both spouses tied to the mortgage and the upkeep in the meantime.

Why some couples choose a cash sale

Listing a house during a divorce means agreeing on an agent, a list price, repairs, showings, and every offer that comes in. A direct cash sale replaces most of that with one offer and one closing date. Proceeds can be held in escrow by an attorney until you reach a settlement, if that’s what your agreement says.

If the house is worth less than what’s owed, a sale may need the lender’s approval (a short sale). Talk to your attorney and lender about that before you sign anything.