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Dividing Real Estate Fairly: What Every Divorcing Couple Should Know

Illustration of a house split in half with red ropes pulling in opposite directions, symbolizing the emotional and financial challenges of dividing property during divorce.
Dividing real estate during divorce can feel like tearing a life in two—having the right guidance helps protect what matters most.

Real estate is often the most valuable asset a couple owns—and dividing it during divorce can be complicated, emotional, and financially risky. Whether you own a luxury property in Portsmouth, a vacation home on the Maine coast, or multiple real estate assets, making the right decisions early is essential to protecting your future.

As a Certified Divorce Real Estate Expert (CDRE), Certified Divorce Financial Analyst (CDFA®), and licensed real estate broker in both New Hampshire and Maine, I guide clients through the real estate division process with a neutral, strategic, and client-centered approach. In this article, I’ll outline the key considerations every divorcing couple must understand to divide real estate fairly and efficiently.

Why Real Estate Division Is So Complex During Divorce

Unlike liquid assets, real estate isn’t easily divided down the middle. The home you live in might carry financial value, emotional weight, and legal implications.

Additionally, factors like mortgage liability, capital gains exposure, refinancing ability, and local market timing can heavily impact your options. Missteps here don’t just delay the divorce—they can damage credit, increase taxes, and lead to post-divorce legal disputes.

That’s why it’s critical to work with professionals trained in both divorce and real estate—especially in high-net-worth or multi-property cases.

Step One: Understand What You Own

Before you can divide anything fairly, you need full clarity on your holdings. That includes:

  • The primary marital residence

  • Any vacation homes, investment properties, or land

  • Mortgage balances, home equity lines, or liens

  • The title ownership (both names or just one)

  • Whether the property is separate or marital

As part of my divorce real estate process at McNally Group Realty, I conduct a full asset review with each client to identify all real estate-related holdings and liabilities before discussing options and next steps.

Step Two: Determine Property Value Accurately

A fair division begins with a fair market value. Relying on online tools like Zillow or outdated tax assessments can create major discrepancies—and disputes.

I conduct divorce-specific property valuations based on:

  • Recent comparable sales

  • Current market activity

  • Condition and upgrades

  • Seasonality and timing

This valuation serves as a neutral foundation for negotiations, mediation, or court presentation.

Step Three: Explore Division Options

Sell and Split the Proceeds

This is the most straightforward option and is common when neither spouse wants to stay in the home or cannot afford to buy the other out.

Pros:

  • Clean financial break

  • Equitable split of proceeds

  • Removes shared liability

Cons:

  • May be emotional or disruptive, especially for children

  • Subject to market conditions

I provide luxury marketing services and strategic listing plans to maximize value and minimize days on market, especially for high-end homes in New Hampshire and Maine.

One Spouse Buys Out the Other

If one party wants to keep the home, a buyout can be negotiated based on the equity and ownership terms.

This typically requires:

  • A refinance in the retaining spouse’s name

  • A formal agreement outlining the buyout terms

  • A financial assessment of affordability and future costs

Delayed Sale or Nesting Agreement

Some couples choose to retain joint ownership for a period of time (e.g., until children graduate) while outlining sale or refinance terms in advance.

Pros:

  • Stability for minor children

  • Flexibility if the market is down

Cons:

  • Ongoing financial entanglement

  • Risk of future disputes or delayed refinancing

This route requires carefully written legal agreements and a strong real estate strategy to protect equity and credit during the transition.

Step Four: Address Mortgage Liability

Here’s one of the most common and dangerous misunderstandings I see:

Removing someone from the title does NOT remove them from the mortgage.

If both parties are on the mortgage and only one remains in the home, both are still legally responsible for payments—unless a refinance is completed. This can:

  • Impact credit if payments are missed

  • Prevent the non-residing spouse from qualifying for a new mortgage

  • Lead to long-term financial complications

As both a CDRE and CDFA®, I work closely with divorce lending professionals to ensure clients understand what they qualify for and how refinancing or sale will impact them financially.

Step Five: Factor In Capital Gains and Taxes

Selling or transferring real estate in divorce can trigger unexpected tax consequences—especially in high-value homes.

Capital gains considerations:

  • Married couples may exclude up to $500,000

  • Single filers may only exclude up to $250,000

  • You must meet ownership and residence rules

Get expert tax guidance or review IRS Topic No. 701 – Sale of Your Home for more details.

I collaborate with CPAs and estate planners when needed to help ensure your real estate decisions are financially sound.

How a CDRE Supports Fair Real Estate Division

As a Certified Divorce Real Estate Expert (CDRE), I bring specialized skills and training to support divorcing couples and their legal teams. I serve as a neutral party focused on asset preservation—not just “selling houses.”

My services include:

  • Divorce-focused home valuations

  • Market timing guidance for luxury homes

  • Buyout and refinance strategy consulting

  • Coordination with attorneys, mediators, and financial professionals

  • Expert testimony or reports when needed

  • Global relocation and referral support through eXp Realty, LLC

Key Takeaways

  • Real estate is often the most complex and emotional asset in a divorce.

  • Fair division requires accurate valuation, legal clarity, and strategic financial planning.

  • Your options include selling, buying out, or retaining joint ownership—with clear pros and cons.

  • Mortgage liability and tax exposure must be fully understood before making decisions.

  • A Certified Divorce Real Estate Expert (CDRE) offers neutral, specialized support to protect your equity and peace of mind.

Dividing real estate during divorce is not just about what’s “fair”—it’s about protecting your future. I’ve helped countless clients make informed, confident decisions during this critical time. Whether you’re early in the process or already working with a legal team, let’s talk about how to create a plan that supports your goals with professionalism and care.

Lisa McNally

Certified Divorce Coach | Certified Divorce Mediator

Certified Divorce Financial Analyst (CDFA®) | Certified Divorce Real Estate Expert (CDRE

Licensed Real Estate Broker (NH & ME)

Founder, Optimal Divorce Solutions

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© 2025 by Lisa McNally, Certified Divorce Mediator, Coach, Financial Analyst & Real Estate Expert.
Lisa McNally provides professional mediation, coaching, financial analysis, client preparation, and real estate services within her licensed and certified areas of expertise. She is not an attorney, financial advisor, tax advisor, or therapist. For matters beyond the scope of these services, please consult a licensed professional in those areas.

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