Selling Your House During a Divorce in Texas: Community Property Laws & Options (2026)

Divorce is hard enough without figuring out what to do with the house. Texas makes it more complex because it's a community property state — meaning the house likely belongs to both spouses equally, regardless of whose name is on the mortgage or deed.

This matters because unlike the 41 states that use "equitable distribution" (where a judge decides what's fair), Texas law presumes everything acquired during the marriage is owned 50/50. The house. The equity. The mortgage obligation. All of it.

This guide explains your legal rights under Texas community property law, your four options for the marital home, the tax implications of timing the sale, and why a cash sale is often the fastest path to resolution for both parties.

Community Property vs. Separate Property in Texas

Before you can sell the house, you need to understand who actually owns it under Texas law. The answer might surprise you.

Community Property: The Default Rule

Under the Texas Family Code, anything acquired during the marriage is presumed to be community property — owned equally by both spouses. This includes:

• The house you bought together after getting married
• The house one spouse bought during the marriage, even if only their name is on the deed
• Any increase in equity from mortgage payments made with community funds (income earned during marriage)

This presumption is powerful. The spouse claiming something is not community property bears the burden of proving it.

Separate Property: The Exceptions

Separate property belongs to one spouse alone and is not subject to division. It includes:

• Property owned before the marriage — a house you bought before saying "I do"
• Inherited property — even if inherited during the marriage
• Gifts — property given specifically to one spouse
• Personal injury recoveries — compensation for pain and suffering (but not lost wages)

To claim separate property, you must prove it with clear and convincing evidence — a higher standard than the typical "preponderance of evidence" used in most civil cases.

The Inception of Title Rule

Texas uses the inception of title rule: the character of property (community or separate) is determined at the moment it was first acquired. If you bought the house before marriage, it remains your separate property even if community funds (your joint income) were later used for mortgage payments.

However, the community estate may have a reimbursement claim for those payments — meaning your spouse could be entitled to reimbursement for community funds used to pay down your separate property mortgage.

Commingling: When Lines Get Blurred

Separate property can lose its character when it gets mixed with community assets:

• You owned the house before marriage but refinanced with your spouse on the new mortgage
• You used inheritance money as a down payment on a jointly-titled home
• Separate and community funds were deposited into the same account used for mortgage payments

Can You Sell During a Pending Divorce?

Yes — but not without your spouse's cooperation or a court order. Texas has built-in protections that prevent either spouse from acting alone.

Standing Orders and Automatic Temporary Restraining Orders

Most Texas counties issue standing orders or automatic temporary restraining orders (ATROs) the moment a divorce petition is filed. These orders typically prohibit both spouses from:

• Selling, transferring, or disposing of community property
• Making extraordinary expenditures without the other's consent
• Destroying, hiding, or encumbering assets
• Canceling or modifying insurance policies

Violating these orders can result in contempt of court charges, sanctions, or an unfavorable property division.

Both Spouses Must Agree — or the Court Must Order It

To sell the marital home during a pending divorce, you need one of two things:

1. Written agreement from both spouses — both sign a listing agreement and eventually the purchase contract
2. Court order — if one spouse refuses, you can petition the court for permission to sell

Texas Homestead Protections

The Texas Constitution provides some of the strongest homestead protections in the country. During temporary orders (before the divorce is finalized), the court generally cannot force a sale of the family home. Instead, the court typically:

• Awards exclusive use and possession to one spouse (usually the primary custodial parent)
• Orders the other spouse to continue contributing to mortgage payments
• Defers the sale decision until the final divorce decree

Agreed Sale vs. Court-Ordered Sale

An agreed sale is always faster, cheaper, and less stressful. Both spouses cooperate on pricing, offers, and closing. A court-ordered sale is a last resort — the court may appoint a receiver to manage the sale, which adds fees, delays, and removes both parties' control over the process.

What Happens If One Spouse Refuses

If your spouse won't agree to sell, your options include:

• Mediation: Texas courts often require mediation before trial. A skilled mediator can break the deadlock.
• Motion to the court: Ask the judge to order the sale as part of the final property division.
• Partition suit: File a separate legal action to force the sale of jointly-owned property.

Your 4 Options for the Marital Home

When it comes to the house, divorcing couples in Texas generally have four paths forward.

Option 1: Sell and Split the Proceeds

The cleanest option. Both spouses walk away with cash and no ongoing ties to the property.

• List the house or get cash offers
• Pay off the existing mortgage from proceeds
• Divide remaining equity per your agreement or court order
• Both spouses sign at closing

Best when: Both parties want a clean break, neither can afford the house alone, or the home needs significant work.

Option 2: One Spouse Buys Out the Other (Owelty Lien)

Texas has a specific legal mechanism for this: the Owelty of Partition Lien. It allows the keeping spouse to refinance the marital home to pay the other spouse their share of equity.

• Get a professional appraisal to determine fair market value
• Calculate each spouse's equity share
• The keeping spouse refinances with an Owelty lien, rolling the buyout amount into the new mortgage
• The departing spouse receives their equity share at closing

Best when: One spouse wants to stay (especially for children's stability) and can qualify for refinancing alone.

Option 3: One Spouse Keeps the House, Other Gets Offset

Instead of a cash buyout, one spouse keeps the house and the other receives assets of equivalent value — retirement accounts, investment accounts, vehicles, or other property.

• Requires accurate valuation of both the house and the offsetting assets
• Tax implications can differ significantly between asset types
• The departing spouse may still need to be removed from the mortgage

Best when: There are sufficient other assets for an equal trade, and comparing asset types is straightforward.

Option 4: Court-Ordered Forced Sale

When spouses cannot agree, the court can order the house sold. This is the last resort.

• The court may appoint a receiver to manage the sale
• Neither spouse controls the listing price, agent selection, or offer acceptance
• Receiver fees and additional legal costs reduce net proceeds
• The process is slower and more expensive than a voluntary sale

Best when: It's the only option — all negotiation and mediation have failed.

Why a Cash Sale Works for Divorcing Couples

Divorce home sales are fundamentally different from normal home sales. The priorities shift from "maximize price at any cost" to "get a fair outcome both parties can accept, quickly." A cash sale through a competitive marketplace addresses the unique challenges head-on.

Speed: Resolve in Days, Not Months

A traditional listing in Texas takes 60-90+ days on market, plus another 30-45 days to close. A cash sale can close in 7-14 days. Every month the house sits unsold is another month of joint mortgage payments, joint liability, and joint stress.

Certainty: No Buyer Financing Falling Through

Nothing derails a divorce settlement faster than a buyer's mortgage approval falling through at the last minute. Cash offers have no financing contingency — once you accept, closing is virtually guaranteed.

Fair Price Through Competition

The number one argument between divorcing spouses about the house? "What's it really worth?" One spouse says $350K, the other says $280K, and each accuses the other of acting in bad faith.

Multiple competing cash offers solve this. When 3-5 independent investors submit written offers, the market determines the price — not opinions, emotions, or one party's negotiating tactics.

Clean Break: No Ongoing Joint Obligations

A fast sale eliminates joint mortgage liability, joint insurance obligations, shared maintenance responsibilities, and the risk that one party stops paying. Both spouses get their share of equity and move on.

As-Is Sale: No Arguing About Repairs

Traditional sales create a cascade of arguments for divorcing couples: Who pays for the new roof? Why should I stage a house I've moved out of? I'm not mowing the lawn for open houses. Cash buyers purchase the property as-is — no repairs, no staging, no arguments about who does (or pays for) what.

Privacy: No Public Open Houses

Divorce is a difficult, personal experience. The last thing most people want is strangers walking through their home every weekend for months. A cash sale is a private transaction — no yard signs, no open houses, no public showings during an already difficult time.

Tax Implications

Selling the marital home during divorce has significant tax implications. Getting the timing right can save you tens of thousands of dollars.

Capital Gains Exclusion: Timing Is Everything

The federal tax code allows homeowners to exclude capital gains on the sale of their primary residence:

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

Requirements: You must have owned and used the home as your primary residence for at least 2 of the last 5 years.

The timing advantage: If you sell before the divorce is finalized and file jointly for that tax year, you may qualify for the full $500,000 exclusion. Sell after, and each ex-spouse is limited to $250,000 on their share.

For most couples, the $500K combined exclusion is more than enough. But for high-equity homes — particularly in markets like Austin, Dallas, or Houston — the difference between $500K and $250K can matter.

Property Tax Proration

At closing, property taxes are prorated between the seller and buyer based on the closing date. Your title company handles this calculation, but be aware that Texas property taxes are among the highest in the nation (no state income tax, but property taxes average 1.6-1.8% of assessed value). Proration at closing can affect how much each spouse nets.

No Texas State Income Tax

One advantage of selling in Texas: there's no state income tax on the sale. Any capital gains tax you owe is federal only.

Consult a Tax Professional

Every divorce is different, and tax law is nuanced. A CPA or tax attorney can help you optimize the timing of your sale, ensure you qualify for the maximum exclusion, and avoid costly mistakes. This is one area where professional advice pays for itself many times over.

Working with Your Attorney

Your family law attorney is your most important ally in a divorce home sale. Here's how to work with them effectively.

Get Written Agreement Before Listing

Before taking any steps to sell, make sure both spouses have signed a written agreement covering:

• Agreement to sell the property
• How the proceeds will be divided
• Who is responsible for showing the property, maintaining it, and paying carrying costs until closing
• A minimum acceptable price (or agreement to accept the highest competing offer)

How Proceeds Will Be Held

Decide in advance how sale proceeds will be handled:

• Split at closing: Title company disburses each spouse's share directly
• Held in escrow: Proceeds held until the divorce is finalized and the court approves the distribution
• Attorney trust account: One or both attorneys hold funds pending final agreement

Court Approval If Required

If your divorce involves standing orders or temporary restraining orders, you may need the court's permission to sell. Your attorney can file the appropriate motion and get approval, often within a few weeks.

Partition Agreement

If you're separating property but not yet divorcing, a partition agreement can convert community property to separate property by agreement. This is a legal tool available under the Texas Family Code that allows spouses to change the character of their property.

Step-by-Step: How to Sell Your House During a Texas Divorce

If you and your spouse agree that selling is the right path, here's the process from start to finish.

Step 1: Both Parties Agree (or Get a Court Order)

This is the essential first step. Either both spouses sign a written agreement to sell, or one spouse petitions the court for an order authorizing the sale. Without this, no legitimate buyer or title company will proceed.

Step 2: Get Competing Cash Offers

Submit your property information to a cash buyer marketplace. Within 24-48 hours, you'll receive multiple written offers from vetted investors. Both spouses can review all offers simultaneously.

Step 3: Both Spouses Review and Agree on the Best Offer

With multiple offers on the table, both parties can compare terms — not just price, but closing timeline, contingencies, and conditions. Choose the offer that best serves both parties' interests.

Step 4: Sign the Contract (Both Spouses Sign as Sellers)

In Texas, both spouses must sign the purchase contract as sellers when selling community property. Your attorneys should review the contract before signing. This protects both parties and ensures the title company can issue clear title.

Step 5: Close Through a Title Company

A Texas title company handles the closing, including title search, deed preparation, and funds disbursement. Proceeds are distributed according to your written agreement — either split at closing or held in escrow pending the final divorce decree.

Frequently Asked Questions

Can I sell the house without my spouse's permission during a divorce in Texas?

Generally no. Texas community property law requires both spouses to consent to the sale of the marital home. Automatic temporary restraining orders in most Texas counties prevent either spouse from selling community property without the other's agreement or a court order. However, you can petition the court for permission to sell.

Is the house always split 50/50 in a Texas divorce?

Not necessarily. While Texas is a community property state, the court aims for a "just and right" division, which isn't always equal. Factors include each spouse's earning capacity, fault in the breakup, custody of children, and health conditions. The house itself isn't "split" — it's either sold and proceeds divided, or one spouse receives it with an offset in other assets.

What is an Owelty of Partition Lien?

An Owelty lien is a Texas-specific legal tool that allows one spouse to refinance the marital home to pay the other spouse their share of equity. The buying spouse takes out a new mortgage that includes enough to pay off the existing loan plus the other spouse's equity share. It's essentially a buyout mechanism.

What happens to the mortgage during divorce?

The mortgage doesn't change just because you're divorcing. Both names remain on the loan until it's paid off or refinanced. If one spouse keeps the house, they should refinance into their name alone. Until then, both are legally responsible for payments, regardless of what the divorce decree says.

How does a cash sale help when spouses disagree on price?

A cash buyer marketplace solves the disagreement with objective data. Instead of relying on one appraisal or one spouse's opinion, you get 3+ competing offers from independent investors. The market determines the price, giving both parties a fair, transparent basis for dividing proceeds.

Ready to Move Forward?

Selling your house during a divorce is about more than money — it's about closing one chapter so both parties can start the next. In Texas, community property law makes the house a shared asset, and that means the decision to sell must be shared too.

The fastest path to resolution is one where both spouses can look at the same objective data and agree. Competing cash offers provide that data — fair market prices from real buyers, on a timeline that works for your divorce, with no repairs, no staging, and no months of uncertainty.

Disclaimer: This article is for informational purposes only and does not constitute legal, tax, or financial advice. Texas divorce and property laws are complex and vary by county and circumstance. Consult with a Texas family law attorney, CPA, or financial advisor for advice specific to your situation.