Selling a Home During a Divorce in Austin, TX: What to Know Before You List

Can you sell a house during a divorce in Austin, TX?

Yes. But there are a few extra steps.

In Texas, both spouses will usually need to sign when selling the family home. And once a divorce has been filed, Travis County has rules that may limit what either spouse can do with the property on their own.

That’s why it’s important to get clear on who can make decisions before the home ever goes on the market.

The real estate market usually isn’t the hardest part of selling during a divorce.

The harder part is getting two people to agree on things like price, timing, repairs, showings, offers, and how the money will be divided.

I’ve seen well-priced homes sit on the market and good offers fall apart simply because the sellers were not on the same page before listing.

The more you can work out ahead of time, the smoother the sale will usually be.

Here are some of the biggest things to think about before selling a home during a divorce in Austin, Lakeway, Bee Cave, Lake Travis, or another Travis County community.

One important note: I’m a REALTOR®, not an attorney or tax advisor. This article is general information only. Your divorce attorney and CPA should be involved before you sign a listing agreement or make financial decisions.

Start With Who Has the Authority to Sell

Before you start talking about price, photos, or when to list, make sure you know who legally has the authority to sell the home.

Texas homestead rules usually require both spouses to sign

Under Texas Family Code Section 5.001, one spouse generally cannot sell the family homestead without the other spouse joining in the sale.

That can apply even if the property is considered separate property or only one spouse’s name appears on the deed.

In simple terms, if the house is your primary residence, expect the title company to look closely at marital status and who needs to sign.

Travis County has additional rules once a divorce is filed

Travis County courts use a standing order in divorce cases.

The purpose is to help protect property and keep things fairly stable while the divorce is going through the court.

That can limit what either spouse is allowed to do with certain property without the other spouse agreeing or the court approving it.

And remember, Austin-area homes are not all in Travis County.

Williamson, Hays, and Bastrop counties may have their own rules and standing orders.

Before listing, ask your attorney what applies to your specific case and property.

Decide Whether Selling Is Actually the Plan

Selling the house isn’t always the only option.

Before picking a list date, both spouses should understand what is supposed to happen with the property.

The Travis County Law Library's guide on divorce and real property outlines several common options:

• Sell the home and divide the proceeds

• One spouse keeps the home and refinances the mortgage

• One spouse keeps the home and pays the other spouse for their share of the equity

If one spouse wants to keep the home, your attorneys may also discuss options such as an owelty lien.

That is something to review with your attorney before deciding that selling is the only choice.

Should You Sell Before or After the Divorce Is Final?

You can potentially sell while the divorce is still pending or wait until after the final decree.

There isn’t one answer that works for everyone.

Selling before the divorce is final can sometimes make the property division easier because you are dividing cash instead of continuing to deal with a home whose value and expenses can change.

But it also means you have to make real estate decisions while the divorce is still going on.

Waiting until after the divorce can give everyone clearer rules.

The problem comes when a divorce decree simply says something like, “The house will be sold,” without explaining how the sale will actually work.

That can leave a lot of important questions unanswered.

If the home is going to be sold, I would want the agreement or decree to address things like:

• Who chooses the listing agent

• How the list price will be determined

• Who approves price reductions

• How offers will be reviewed

• What happens if you disagree on an offer

• Who pays the mortgage while the home is listed

• Who pays taxes, insurance, HOA fees, and utilities

• Who pays for repairs or listing preparation

• Who lives in the home while it is listed

• How showings will be handled

• How the net proceeds will be divided

• Whether either spouse is reimbursed for certain expenses

• What happens if the home does not sell by a certain date

The more of this you decide ahead of time, the fewer problems you are likely to face once buyers are involved.

The Decisions That Can Slow Down a Divorce Sale

Pricing is one of the biggest areas where disagreements happen.

One spouse may want to start high because they need a certain amount of money from the sale.

The other spouse may want to price more aggressively because they have already moved out and are paying for another place to live.

Both situations are understandable.

But the home can only go on the market at one price.

The best way to handle this is to agree on the process before arguing about the number.

Both sellers should see the same comparable homes, the same market data, and the same pricing recommendation.

That helps keep the discussion focused on what buyers are actually doing in the market instead of turning it into a disagreement between spouses.

There are a few other decisions worth working out early.

Repairs and listing preparation

One person may want to repaint, replace flooring, and make the home look perfect.

The other may want to sell it exactly as it is.

Decide what work will be done, who will pay for it, and whether anyone will be reimbursed from the sale proceeds.

You don’t always need to remodel a home before selling. Sometimes smaller repairs, safety items, insurance concerns, and general cleanup matter more than cosmetic upgrades.

Responding to offers

Buyers do not want to wait several days for every answer.

Decide ahead of time how offers will be shared and how quickly both spouses will review them.

Inspection negotiations

Once you accept an offer, some decisions become time-sensitive.

The buyer may ask for repairs, credits, or other changes after the inspection.

It helps to know ahead of time how those decisions will be made if the two of you disagree.

Get the Paperwork Together Early

Selling during a divorce doesn’t necessarily change what the buyer, lender, or title company needs.

But getting documents together can take longer when two households, attorneys, and schedules are involved.

Try to gather these items early:

• Current mortgage statement

• HELOC or second mortgage information

• Property deed

• Survey, if you have one

• HOA information and current dues

• Information about pending HOA assessments

• Receipts for major improvements

• Roof, HVAC, and remodeling records

• Utility information

• Warranties

• Permits

• Previous inspection reports

• Your divorce attorney’s contact information

Having this ready can help avoid last-minute delays.

Make Sure the Seller's Disclosure Is Accurate

Most sellers of single-family homes in Texas are required to provide a seller’s disclosure notice under Texas Property Code Section 5.008.

A divorce can make this part a little more complicated.

Maybe one spouse moved out several months ago and doesn’t know about a recent plumbing issue.

Or maybe one spouse handled most of the repairs and maintenance over the years.

Both sellers need to make sure the disclosure is completed based on what they know about the property.

If communication is difficult, this may be something you coordinate through your attorneys and real estate agent.

The goal is simple: make sure the information being given to the buyer is accurate.

Tax Questions to Ask Your CPA

Taxes are one area where you do not want to guess.

The timing of the sale, your filing status, how long each spouse lived in the home, and how the property is divided can all matter.

Here are a few questions worth asking your CPA before selling.

Can you use the home sale capital gains exclusion?

Under IRS Publication 523, qualifying homeowners may be able to exclude part of the gain from selling their primary residence.

The limits can be different depending on filing status and whether the ownership and residency requirements are met.

Ask your CPA what applies to you based on the timing of the sale and your divorce.

What if one spouse already moved out?

There are special rules for some separated and divorced homeowners.

Depending on your situation and divorce agreement, time that one spouse continues living in the property may affect how residency requirements are calculated.

This is worth reviewing with a tax professional before choosing a sale date.

What if one spouse buys out the other?

Transfers of property between spouses as part of a divorce can be treated differently for tax purposes than a normal home sale.

The spouse who keeps the property should understand what happens to the tax basis because that can affect taxes when the home is eventually sold.

What if you haven't lived there for two full years?

There may be situations where a homeowner qualifies for a partial exclusion.

Again, your CPA should look at your specific circumstances.

Bring your original purchase closing statement and records of major improvements to that conversation.

Those numbers may be important when calculating the home's tax basis and potential gain.

Living in the Home While It Is Listed

If one spouse is still living in the home, the listing process can get stressful quickly.

A few simple rules can make things easier.

Keep communication about the sale in writing when possible.

Your agent can also help make sure both spouses receive the same information about showings, feedback, offers, inspections, and deadlines.

Agree on showing rules ahead of time.

That might include:

• How much notice is required

• When buyers can see the home

• Who needs to leave during showings

• What happens with pets

• What happens with children

• How last-minute showing requests will be handled

If only one spouse is living in the home, that person is usually dealing with most of the day-to-day inconvenience of keeping the house ready.

It is worth talking about that upfront.

You should also remove or secure personal documents, photos, valuables, and anything that could create another disagreement during the listing.

What Your Real Estate Agent Should Do

A divorce sale needs a little more structure than a normal listing.

Your listing agent should help keep the real estate side of the transaction organized and neutral.

That means:

• Giving both sellers the same information

• Sharing market updates with both people

• Staying out of personal disagreements

• Keeping the conversation focused on the home sale

• Helping you understand pricing and market conditions

• Coordinating with the title company

• Working with your attorneys when needed

• Keeping track of deadlines and decisions

Your real estate agent should not give legal advice or decide who is right in the divorce.

Their job is to help both sellers successfully handle the real estate transaction.

Frequently Asked Questions

Can one spouse sell the house without the other in Texas?

Usually not when the property is the family homestead.

Texas law generally requires both spouses to participate in the sale of a homestead.

There can be exceptions, including situations involving a court order, so this is something to confirm with your attorney.

Should we sell the house before or after the divorce is final?

It depends on your finances, taxes, timing, and how easily the two of you can make decisions together.

Selling before the divorce is final can sometimes make dividing property easier.

Selling afterward may give you clearer instructions from the court.

Either way, the details of how the home will be sold should be worked out before putting it on the market.

Who pays the mortgage while the home is listed?

That is usually determined by your agreement, temporary court orders, or final divorce decree.

It is important to settle this early.

If both spouses are responsible for the loan, missed payments can create problems regardless of who is currently living in the house.

Get a Plan in Place Before You List

Every divorce and every home sale is different.

Your equity, timeline, finances, county, and ability to make decisions together can all affect the best way to move forward.

The biggest thing I recommend is getting the plan in place before the house goes on the market.

Know who is making decisions.

Know how expenses will be handled.

Know what happens when an offer comes in.

And make sure your attorney, CPA, title company, and real estate agent are all working from the same information.

If you're thinking about selling a home during a divorce in Austin, Lakeway, Bee Cave, or the Lake Travis area, I'm happy to privately walk you through the real estate side of the process.

We can look at your home's value, possible sale timeline, expected selling costs, and what you may need to prepare before listing.

With my background in finance and tax before real estate, I can also help you identify the questions you may want to bring to your attorney and CPA.

Call or text me at 949-484-9486 to schedule a private conversation.

Amanda Zito, REALTOR®
Real Broker, LLC
TX TREC #840088 | CA DRE #01740063
SoldByZito.com

This article is for general information only and is not legal, tax, or financial advice. Consult a licensed Texas family law attorney and qualified tax professional about your specific situation.