Top Real Estate Mistakes to Avoid in Divorce

Real Estate Mistakes to Avoid in Divorce

Dividing real estate during a divorce is one of the most complex—and emotionally charged—decisions you’ll face. The family home is not just a major financial asset; it also carries deep sentimental value. However, making a misstep with real estate during divorce can lead to long-term financial strain, legal complications, and unexpected tax consequences. At Optimal Divorce Solutions, I help clients avoid these costly mistakes and make informed, strategic decisions that align with their goals.

In this post, I’ll walk you through the top real estate mistakes I see divorcing couples make—and how you can avoid them.

Mistake #1: Letting Emotions Drive the Decision to Keep the House

The Emotional Attachment Trap

Wanting to stay in the marital home for the sake of children, continuity, or comfort is understandable. But keeping the home when it’s financially unsustainable can backfire quickly.

Ask yourself:

• Can I afford the mortgage, taxes, insurance, and upkeep on my post-divorce income?

• Am I sacrificing retirement savings or financial independence just to stay in the home?

As a Certified Divorce Financial Analyst (CDFA®) and Certified Divorce Real Estate Expert (CDRE), I work with clients to evaluate the full financial impact of keeping or selling the home—not just the monthly payment.

Mistake #2: Not Understanding the True Value of the Property

Online Estimates Are Not Enough

Don’t rely on Zillow or other automated tools. You need a current, objective, and defensible property valuation.

Options include:

• A Comparative Market Analysis (CMA) from a local real estate professional

• A formal appraisal from a licensed appraiser
  

I provide in-depth CMAs backed by market data and insights as a Licensed Real Estate Broker in New Hampshire and Maine, helping you and your mediator or attorney make accurate financial decisions. If your property isn't in NH or ME, I can use my global connections to help you find a reputable Real Estate Agent to assist you.

Click HERE to Request a Divorce Home Valuation"

Mistake #3: Assuming You Can Refinance Without Running the Numbers

Post-Divorce Mortgage Challenges

Many people assume that if they’re awarded the house, they’ll be able to refinance it into their own name. But post-divorce mortgage qualification can be more difficult than expected—especially if you’re self-employed, have variable income, or are receiving alimony or child support.

If you're not approved to refinance:

• The loan may remain in both names

• Your credit may be at risk if your ex defaults

• You could be legally tied to the property indefinitely
  

I help clients understand their refinancing options early in the process so they’re not blindsided later.

Mistake #4: Ignoring Tax Consequences of Selling or Keeping the Home

Capital Gains and Property Transfers

If you sell the home as part of the divorce, you may be eligible for the capital gains exclusion—up to $250,000 per person or $500,000 jointly. But timing and title matters. On the other hand, if one party keeps the house and sells it years later, they may face a large capital gains tax if they no longer meet IRS exclusion requirements. Additionally, be mindful of property transfers, recording costs, and local real estate taxes. These can eat into your settlement if not accounted for properly.

As a financial and real estate professional, I help clients model these scenarios so they understand the after-tax value of each option.

Mistake #5: Overlooking the True Cost of Repairs and Maintenance

It's Not Just the Mortgage

Many clients focus on whether they can cover the monthly mortgage but forget about:

• Roof replacements

• Plumbing or HVAC repairs

• Landscaping and snow removal

• Routine maintenance and updates
  

These costs can add up quickly. When I work with clients, we look beyond the surface and evaluate the home’s short- and long-term financial requirements.

Mistake #6: Skipping a Real Estate Professional with Divorce Expertise

Real Estate Divorce Is NOT Business As Usual

Divorce real estate transactions are different. There are legal, financial, emotional, and communication complexities that go far beyond a standard listing.

As a Certified Divorce Real Estate Expert (CDRE), I’m trained to:

• Work with both spouses neutrally and confidentially

• Understand the impact of court orders and divorce agreements

• Navigate delayed sale clauses, occupancy issues, and title transfers

• Coordinate with mediators, attorneys, and financial professionals
  

Using a neutral, divorce-savvy real estate expert can help protect your equity and your sanity. Click HERE to learn more about this important topic.

Key Takeaways:

• Don’t let emotions cloud your real estate decisions—assess what’s financially realistic.

• Get a professional valuation of the home; online estimates aren’t enough.

• Know your mortgage refinance options before finalizing property agreements.

• Understand the short- and long-term tax impacts of keeping or selling the house.

• Factor in all costs of homeownership—not just the mortgage.

• Work with a Certified Divorce Real Estate Expert to ensure a smooth, fair outcome.
  

Making the right real estate decisions during divorce requires clear thinking, expert support, and a well-thought-out plan. If you’re navigating divorce and aren’t sure what to do with your home—or want to avoid any of these costly mistakes—let’s talk.

Schedule your free 30-minute consultation today and take the first step toward clarity and confidence.

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 www.OptimalDivorceSolutions.comSchedule a Free Consultation