Selling a House During Divorce in Tennessee

Divorce is hard enough without the added stress of figuring out what to do with your house. The marital home is often the largest asset—and the most emotionally charged one—in any divorce settlement.

If you're going through divorce in Tennessee and need to sell your house, this guide covers everything you need to know: how Tennessee divides property, your options for the marital home, tax implications, and how to sell quickly when you both just want to move on.

The good news: selling during divorce is not only possible, it's often the cleanest path forward for both parties.

How Tennessee Divides Property in Divorce

Tennessee is an equitable distribution state—not a community property state. This distinction matters significantly for how your house will be handled.

Equitable ≠ Equal

In equitable distribution states, courts divide marital property "fairly" based on circumstances—which doesn't necessarily mean 50/50. The judge has discretion to award more to one spouse based on various factors.

According to Tennessee family law experts, most judges start with a roughly 50/50 division and make adjustments based on the specific facts of the case.

Factors Courts Consider Under T.C.A. § 36-4-121

Tennessee courts consider these factors when dividing property:

• Length of the marriage: Longer marriages typically see more equal division
• Each spouse's contributions: Both financial contributions and homemaking/childcare count
• Economic circumstances: Income, earning capacity, and financial needs of each party
• Age and health: Physical and mental health of both spouses
• Future earning capacity: Education, training, and employment prospects
• Tax consequences: How the division will affect each party's tax situation
• Social Security benefits: Potential benefits available to each spouse

What This Means for Your House

The court evaluates your home as part of the total marital estate. The house itself doesn't have to be split 50/50—what matters is that the overall division is equitable. For example:

• One spouse might keep the house while the other receives equivalent value in retirement accounts
• The house might be sold and proceeds divided based on the overall settlement
• One spouse might receive a larger share of home equity to offset other factors

Is Your House Marital or Separate Property?

Before dividing anything, Tennessee courts must classify each asset as marital property (subject to division) or separate property (belonging to one spouse).

Marital Property

Generally, marital property includes all assets acquired by either spouse during the marriage. If you bought your house after getting married—regardless of whose name is on the deed—it's likely marital property.

Separate Property

Separate property typically stays with the original owner and includes:

• Property owned before the marriage
• Inherited property (even if inherited during marriage)
• Gifts specifically made to one spouse
• Property excluded by valid prenuptial agreement

When Separate Property Becomes Marital (Commingling)

Here's where it gets complicated. Separate property can become marital property through commingling:

• Example 1: You owned the house before marriage but added your spouse to the deed—now it may be marital property
• Example 2: You inherited money and used it as a down payment on a jointly-titled home—the contribution may be commingled
• Example 3: Your spouse paid for significant renovations on your separate property—the increase in value may be marital

Can You Sell Your House Before the Divorce Is Final?

Yes—if both spouses agree. Selling before the divorce is finalized is actually common and often beneficial.

Benefits of Selling Before Finalization

• Removes a major asset from negotiation: One less thing to argue about
• Provides cash for both parties: Easier to establish separate households
• Eliminates ongoing costs: No more joint mortgage, insurance, and maintenance obligations
• Creates a clean break: Easier to move forward without shared property
• Simplifies the final agreement: Just divide the proceeds rather than the property

How to Sell Before Divorce Is Final

1. Get written agreement: Both spouses must consent in writing
2. Agree on terms: Sale price expectations, how proceeds will be held/divided
3. Consider court involvement: For contested divorces, you may need court approval
4. Use an escrow account: Sale proceeds can be held in escrow until the divorce finalizes

What If One Spouse Doesn't Agree?

If you want to sell but your spouse refuses, you have options:

• Mediation: A neutral third party can help you reach agreement
• Court motion: Ask the court to order the sale as part of temporary orders
• Wait for final decree: The court can order sale in the final divorce judgment

The 4 Options for Your Marital Home

When dividing the marital home, couples generally have four paths:

Option 1: Sell and Split the Proceeds

The most common solution—and often the cleanest.

How it works:

• List the house or get cash offers
• Sell to the highest/best offer
• Pay off the mortgage from proceeds
• Divide remaining equity as agreed or ordered by the court

Pros:

• Clean break—no ongoing financial ties
• Both parties get liquid cash to start fresh
• No need to refinance or buy out
• Removes emotional attachment to the property

Cons:

• Both must agree on timing, listing price, and offers (or let the court decide)
• Traditional sales take time (101+ days average in Tennessee)
• Market conditions affect how much you receive

Option 2: One Spouse Buys Out the Other

How it works:

• Determine the home's fair market value (usually via appraisal)
• Calculate each spouse's equity share
• The keeping spouse pays the other their share
• The keeping spouse refinances in their name only

Pros:

• One spouse can stay in the home (important for children's stability)
• No need to sell in unfavorable market

Cons:

• Requires one spouse to qualify for refinancing alone
• Buyout amount can be contentious
• The leaving spouse doesn't get a clean break until refinancing is complete

Option 3: Continue Co-Owning After Divorce

How it works:

• Both remain on the deed and mortgage after divorce
• Agree on who lives there, who pays what, and when to sell
• Common when children are involved (selling when youngest graduates)

Pros:

• Children can stay in the family home
• Can wait for better market conditions
• May preserve home value appreciation

Cons:

• No clean break—ongoing financial ties
• Both remain liable for mortgage
• Disagreements can arise about maintenance, selling later, etc.
• Complicates both parties' ability to buy new homes

Option 4: Trade House Equity for Other Assets

How it works:

• One spouse keeps the house
• The other receives equivalent value in other assets (retirement accounts, investments, etc.)

Pros:

• No need to sell or refinance immediately
• Can be tax-efficient depending on asset types

Cons:

• Comparing home equity to other asset types is complex
• The leaving spouse may still need to be removed from the mortgage
• Future home value changes could create perceived unfairness

What If You and Your Spouse Can't Agree on Selling?

Disagreements about the marital home are common. If you can't reach agreement, here's what happens:

The Court Can Order the Sale

If you and your spouse cannot agree, the Tennessee family court has authority to:

• Order the house sold and proceeds divided
• Award the house to one spouse with a buyout requirement
• Set terms for a deferred sale (typically for children's benefit)

Partition Actions

As a co-owner, you can file a partition action to force the sale of jointly-owned property. This is a separate legal proceeding from the divorce that asks the court to:

• Order the property divided (rare for a single home) or
• Order the property sold with proceeds distributed to owners

Partition actions add time and legal costs but can break a deadlock.

Why Mediation Often Helps

Before going to court, consider mediation. A neutral mediator can help you and your spouse:

• Understand each other's concerns
• Explore creative solutions
• Reach agreement faster and cheaper than litigation

Tax Implications of Selling Your House During Divorce

Tennessee is favorable for selling real estate—but you still need to understand the federal tax implications.

Tennessee Has No State Capital Gains Tax

Tennessee doesn't tax capital gains at the state level. Any capital gains tax you owe will be federal only.

Federal Capital Gains Exclusion

The federal tax code provides a significant exclusion for home sales:

• Married filing jointly: Up to $500,000 of gain excluded
• Single filers: Up to $250,000 of gain excluded

Requirements:

• You must have owned the home for at least 2 of the last 5 years
• You must have lived in the home as your primary residence for at least 2 of the last 5 years
• You haven't used the exclusion in the past 2 years

Timing Matters: Before vs. After Finalization

• Selling while still married: You may qualify for the $500,000 exclusion (filing jointly)
• Selling after divorce: Each ex-spouse gets a $250,000 exclusion on their share
• Transfer between spouses: Property transfers incident to divorce are typically not taxable events

When One Spouse Moves Out

If one spouse moves out before the sale, they may still qualify for the exclusion if:

• The home was their primary residence for 2 of the last 5 years
• The divorce decree grants them an ownership interest

Timing the sale strategically can make a significant tax difference. Consult a tax professional for your specific situation.

How Long Does It Take to Sell a House During Divorce?

This is where divorce sales get tricky. Traditional sales take time—time you may not have.

Traditional Sale Timeline

Based on current Tennessee market data:

• Pre-listing prep: 2-4 weeks
• Days on market: 65-77 days average
• Closing period: 35-45 days
• Total: 3-5 months minimum

For the full breakdown, see our guide: How Long Does It Take to Sell a House in Tennessee?

The Divorce Timeline Problem

Divorce proceedings don't wait for real estate markets. You may face:

• Court deadlines requiring asset disposition
• Double housing costs (maintaining the marital home while establishing a new residence)
• Emotional urgency to move forward
• Disagreements with your spouse about pricing, repairs, and offers

Cash Sale Timeline

Cash buyers can close in 7-14 days, which aligns much better with divorce timelines:

• Day 1: Submit property information
• Day 1-2: Receive cash offers
• Day 3-5: Accept offer, sign purchase agreement
• Day 7-14: Close at title company

Why Competing Cash Offers Simplify Divorce Home Sales

Divorce sales have unique challenges that competing cash offers address directly:

Remove Emotion from the Equation

When you and your spouse look at 5 different cash offers from verified investors, you're looking at objective data—not fighting about what you "think" the house is worth. The market speaks through actual offers.

Both Parties See the Same Information

With traditional sales, one spouse might think the agent isn't trying hard enough or that an offer should have been accepted. With a marketplace, both parties see all offers simultaneously. Transparency reduces conflict.

No Repair or Staging Disagreements

Traditional sales often create arguments:

• "We should spend $15,000 on updates to get a higher price"
• "I'm not paying for repairs on a house I'm leaving"
• "Why should I keep the house clean for showings when I've already moved out?"

Cash buyers purchase as-is. No repairs, no staging, no arguments about who does what.

Fast Closing = Faster Financial Separation

Every month the house doesn't sell, you're both paying:

• Mortgage (or risking credit damage)
• Property taxes
• Insurance
• Utilities and maintenance

A 2-week closing versus a 4-month process means faster access to your share of the equity and an end to joint financial obligations.

No Financing Contingency Risk

Traditional buyers can have financing fall through at the last minute—sending you back to square one after months of waiting. Cash buyers don't have this risk. Once you accept an offer, closing is virtually certain.

Frequently Asked Questions

Can my spouse sell our house without my permission in Tennessee?

No. In Tennessee, both spouses must consent to sell jointly-owned property. If your name is on the deed, your spouse cannot sell the house without your signature. Additionally, once divorce proceedings begin, courts typically issue automatic restraining orders preventing either party from selling, transferring, or encumbering marital assets without court approval or mutual consent.

What if there's negative equity in the house?

If you owe more than the house is worth (underwater), you have several options: continue making payments until equity builds, negotiate a short sale with your lender (selling for less than owed), or include the negative equity as part of the overall debt division in your divorce settlement. The court will factor the underwater mortgage into the equitable distribution of all assets and debts.

Who pays the mortgage during divorce proceedings in Tennessee?

This depends on your situation and any temporary court orders. Common arrangements include: whoever lives in the home pays, both continue paying proportionally, or the higher earner pays. The court may issue temporary orders specifying payment responsibility. Regardless of divorce agreements, both spouses remain liable to the lender if both names are on the mortgage—missing payments hurts both credit scores.

Can I force my spouse to sell the house in Tennessee?

Yes, through the divorce proceedings. If you and your spouse cannot agree, the court can order the house sold and proceeds divided. You can also file a partition action to force the sale of jointly-owned property. Courts generally prefer that couples reach agreement, but they have authority to order a sale when necessary for equitable distribution.

What happens if the house doesn't sell during divorce?

If the house doesn't sell through traditional means, the court may: order a price reduction, assign the house to one spouse with a buyout obligation, order a court-supervised sale, or include the unsold house in post-divorce arrangements. To avoid this uncertainty, many divorcing couples turn to cash buyers who can guarantee a fast closing regardless of market conditions.

Moving Forward: A Fresh Start

Selling your house during divorce is about more than money—it's about closing one chapter and starting the next. The right approach depends on your priorities:

• If you have time and want maximum price: Traditional sale with a good agent
• If you need speed and certainty: Cash offers provide fast closing and guaranteed sale
• If you and your spouse can't agree: Objective cash offers provide data to break the deadlock

Whatever you choose, remember: this is temporary. The stress of selling the marital home will pass, and you'll both have the opportunity to build new lives.

Disclaimer: This article is for informational purposes only and does not constitute legal, tax, or financial advice. Divorce laws and tax rules vary by situation. Consult with a Tennessee family law attorney, tax professional, or financial advisor for advice specific to your circumstances.