When couples are deciding whether to sell the house during a divorce, the conversation usually starts with the home's estimated value. It should really start with what you'll actually walk away with after the sale, because the gap between those two numbers surprises almost everyone. Here's a realistic breakdown of where the money goes.
Real Estate Commissions
Commissions are typically the largest single cost of selling, and they come off the top before anything gets divided. The exact rate varies by agent and situation, but it's worth having this number in writing early, not estimated loosely, since it directly affects how much equity there is left to split.
Closing Costs
Beyond commission, sellers typically cover a handful of standard closing costs: title insurance, escrow fees, transfer taxes, and prorated property taxes up to the closing date. None of these are usually a surprise on their own, but stacked together they add up to a meaningful chunk of the sale price, and both spouses should see the numbers before agreeing to a listing price.
Repairs and Prep
Homes that have been lived in through a long marriage often need some work before they're ready to list, anything from a fresh coat of paint to deferred maintenance one or both spouses have been putting off. During a divorce, it's common for neither spouse to want to front the cost of repairs, which is understandable, but a home that shows poorly typically sells for less than the cost of the repairs would have been. Getting a clear, prioritized list of what actually moves the needle versus what's optional saves money on both ends.
Capital Gains Tax
This is the cost people are most likely to forget entirely. If the home has appreciated significantly, there may be capital gains tax owed on the sale, though a substantial exclusion is often available for a primary residence, particularly if you sell before the divorce is finalized and file jointly, or through certain provisions available to divorcing spouses. The rules here depend on your specific situation and timing, and this is squarely a conversation for your accountant or tax attorney, not something to guess at.
What This Means for Negotiating a Number
When one spouse wants to keep the home and the other wants to sell, the "sell" side of that comparison needs to reflect actual net proceeds, not the home's list price or even its appraised value. I've seen negotiations get stuck because one spouse was comparing a buyout number against the home's full market value, without accounting for what a sale would have actually cost. Once both sides are working from the same real numbers, these conversations tend to move a lot faster.
Know Your Real Number Before You Negotiate
Don't let a settlement conversation move forward on a guess at what a sale would net. Get the real number, commissions, closing costs, repairs, and tax exposure included, before you agree to anything. Schedule a free, confidential consultation and I'll build out an honest net proceeds estimate for your specific home.
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Hannah Ohman is a licensed California real estate professional and a neutral resource during your divorce. While she has a legal background, she does not practice law, provide legal advice, or represent either spouse as an attorney, and nothing in this article should be relied upon as legal or tax advice. Please consult a licensed family law attorney or tax professional for guidance specific to your situation.