Complete 2026 Guide · Updated 2026-09-01
In a New York divorce the marital home is usually the biggest asset, the biggest monthly expense, and the thing neither spouse can sell without the other. New York adds two rules that surprise people: once a divorce summons is served, automatic orders bar either spouse from selling or borrowing against marital property without consent or a court order, and a home owned as tenants by the entirety generally can't be forced onto the market before the divorce is final unless both spouses agree. This guide covers equitable distribution under the Domestic Relations Law, the three options (buyout, sell now, deferred sale), who pays the mortgage in the meantime, what happens when one spouse won't cooperate, the $250,000/$500,000 capital-gains exclusion and how divorce timing affects it, escrow of the proceeds, and when a fast sale to a cash buyer like Tony the Cash Guy makes sense — and when it doesn't. It is not legal advice; a New York matrimonial attorney should be part of every decision here.
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Tell Tony where the house is and what shape it's in. Get a cash number on the same call. Pick a closing date.
7 days a week, 8 AM to 9 PM Eastern.
New York divides marital property under equitable distribution (Domestic Relations Law §236(B)) — fairly, not necessarily equally, weighing factors like the length of the marriage, each spouse's income and contributions, and who will have custody of the children. Property acquired during the marriage is marital regardless of title; property owned before the marriage or received by gift or inheritance is separate, but appreciation during the marriage that's due to the other spouse's efforts, and separate funds that were commingled or put into a jointly titled house, become marital in whole or part. Divorce is heard in the Supreme Court of the county — the trial-level court in New York — in its matrimonial part. For the house, the judgment or the parties' stipulation of settlement decides its value (appraisal or sale), the debt against it, and the equity split; the rest of this guide is about turning that into two separate checks.
The moment a divorce summons is served in New York, statutory automatic orders take effect against both spouses (DRL §236(B)(2)(b); 22 NYCRR 202.16-a). Neither spouse may sell, transfer, encumber, or otherwise dispose of marital property — the house included — without the other spouse's written consent or a court order, except in the ordinary course of business or for reasonable living expenses. The orders also bar changing beneficiaries and letting insurance lapse. So a spouse who lists the house, takes a HELOC, or signs a cash-buyer contract on their own during the case is violating a court order, and the transaction can be undone and the spouse sanctioned. The practical consequence is simple: any sale during a New York divorce happens by written stipulation between the spouses, so-ordered by the court, or by a court order on motion. Get the consent or the order first; everything else follows from it.
Option one is a buyout: one spouse keeps the house and pays the other their share of the equity, usually by refinancing into their own name (which takes the departing spouse off the mortgage) or by offsetting the equity against other marital assets. Transfers between spouses incident to divorce are tax-free under IRC §1041; your attorney handles the deed and the transfer-tax filing. A buyout fails when the staying spouse can't qualify for the loan alone, which is common when one income carried it. Option two is to sell now and divide the net under the stipulation or judgment — the cleanest path and the only one that ends the joint carrying costs. Option three is a deferred sale: one spouse, usually the custodial parent, keeps exclusive occupancy (DRL §234 lets the court award possession of the marital home) until a trigger such as the youngest child finishing school, and the house is sold then with the split fixed now. Deferred sales protect children's stability but tie two ex-spouses to one mortgage and one tax bill for years; the agreement must spell out who pays what, credits for principal and improvements, and what happens on default.
A contested New York divorce commonly runs one to three years; even an uncontested one takes months, and the mortgage runs the whole time. Either spouse can move for pendente lite relief — temporary maintenance and child support under the statutory formulas and an order allocating the mortgage, taxes, insurance, and utilities on the marital home until judgment, generally to hold the status quo. A spouse who pays the carrying costs during the case may be credited at equitable distribution, but courts often decline or reduce the credit where that spouse also had exclusive use of the house, and the credit rarely covers everything. Missed payments hit both credit reports no matter who was ordered to pay, and a foreclosure filing mid-divorce — New York foreclosures are slow, but the fees and the pressure aren't — makes selling now the default rather than an option.
Both spouses must sign a listing agreement, a contract, and a deed on a jointly owned house, and New York law adds a wrinkle: a home owned by spouses as tenants by the entirety generally cannot be partitioned or ordered sold before the marriage is dissolved (the Court of Appeals set the rule in Kahn v. Kahn, 1977), so a judge usually cannot force an interim sale over one spouse's objection the way a judge can in some states. What a New York court can do is award exclusive occupancy, allocate the carrying costs, and — at judgment — order the house sold and the proceeds divided, or award it to one spouse with an offset. After judgment, the tenancy by the entirety becomes a tenancy in common, and a partition action under RPAPL Article 9 becomes available if a former spouse still won't sell. In practice, the pressure of carrying costs, pendente lite orders, and court-referred mediation (New York's presumptive ADR program routes many matrimonial cases to mediation) brings most spouses to a so-ordered stipulation to sell during the case, on agreed terms: the agent or buyer, the price, the timeline, the escrow, and the split.
Federal law (IRC §121) excludes up to $250,000 of gain on a principal residence — $500,000 for a married couple filing jointly — if the seller owned and lived in the house for two of the five years before the sale. If you sell while still married and file a joint return for that year, the full $500,000 is available. If the divorce is final first, each former spouse can exclude $250,000 on their share, provided each still meets the use test; §121(d)(3) treats a spouse who moved out as still using the home for as long as the other spouse lives there under the divorce or separation instrument, and gives a spouse who receives the house credit for the other's ownership period. New York State taxes any gain above the federal exclusion as ordinary income at rates up to 10.9%, and New York City residents pay city income tax of up to 3.876% on top; there is no separate capital-gains rate. The transfer between spouses in a buyout is tax-free under §1041 but carries the original basis, so the spouse who keeps the house keeps the eventual tax bill. Have a CPA look at the timing before the stipulation is signed.
When a marital home sells during a New York divorce, the net proceeds don't go to either spouse at the closing. Payoffs come first — mortgage, HELOC, liens, back taxes — then the seller's transfer taxes (0.4% to the state; 1% or 1.425% in NYC for a 1-3 family house; local taxes in Yonkers, Mount Vernon, and a few other municipalities) and closing costs. The balance is held in an attorney's escrow account or with the title company under the so-ordered stipulation until it's divided, sometimes with an agreed release to each spouse at closing and the rest held pending credits, support arrears, or a disputed separate-property claim. Put the escrow terms in the stipulation before contract; the title company needs them, and an unresolved split is how proceeds sit in escrow for a year.
Every month a divorcing couple carries a house they've agreed to sell costs both of them mortgage interest, taxes, insurance, and utilities, and keeps two people who want to be done tied together. A retail New York listing runs roughly 60-120 days from listing to closing, plus prep, showings, an inspection before contract, and a mortgage contingency — every step needing both spouses' agreement. That's why some divorcing New Yorkers take a cash offer from Tony the Cash Guy: a number over the phone, no showings, no repairs, contents left behind, each spouse signing separately (remote notarization works), and a title-company closing in 7-14 days with the proceeds escrowed per the stipulation. It isn't right for every divorce. Cash offers land at roughly 70-85% of after-repair value minus repairs, so a well-kept house in a strong market — Nassau, Westchester, Brooklyn, Queens — should be listed, and the extra net is worth the extra months when both spouses can afford them. Tony says so on the phone when it's true. The cash route earns its place when the house needs work, the carrying costs are unsustainable, foreclosure is looming, one spouse has moved out of state, or both of you just want it finished.
§04 / References
Illustrative examples of the situations Tony handles — composed from common cases, not verified customer statements. Verified seller reviews are being collected and will be published here.
Three siblings, two states, one inherited house in Paterson. We'd been arguing for two years about what to do. Tony made one offer, the title company split the proceeds, and we all signed remotely. Done.
Court-ordered sale, 14-day deadline. No agent could move that fast. Tony closed in 12 days. Title company split the proceeds per the divorce decree. I didn't have to talk to my ex once.
Kitchen fire took out half the first floor. Insurance was going to take a year. Tony bought the property as-is, I kept what insurance paid, and I walked away with the property gone. Best $0 commission deal of my life.
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Not alone. Once the summons is served, automatic orders bar either spouse from selling or encumbering marital property without the other's written consent or a court order, and both signatures are needed on the deed anyway. Sales during the case happen by so-ordered stipulation or court order.
Generally not for a home owned as tenants by the entirety — the marriage has to be dissolved first (Kahn v. Kahn). The court can award exclusive occupancy and allocate the carrying costs now and order the sale at judgment; after judgment, a partition action is available. Most interim sales happen by stipulation.
Whatever the pendente lite order or the parties' stipulation says; absent either, both remain liable to the lender. Payments one spouse makes may be credited at equitable distribution, but credits are discretionary and often partial. Missed payments hurt both credit reports.
Not necessarily. Each former spouse can exclude $250,000 on their share if they meet the ownership and use tests, and §121(d)(3) treats a spouse who moved out as still using the home while the other lives there under the divorce instrument. Selling while married and filing jointly is the simplest way to secure the full $500,000. Ask a CPA.
After the mortgage, liens, transfer taxes, and closing costs, the net is held in an attorney's escrow or with the title company under the stipulation until it's divided. Agree on the escrow terms before contract.
Yes, with both spouses' signatures under a so-ordered stipulation or a court order, and with the proceeds escrowed as directed. Spouses sign separately and remote notarization works. If the house is clean and the market is strong, Tony will tell you to list it instead.
§·· / Schedule
Tell Tony where the house is and what shape it's in. Get a cash number on the same call. Pick a closing date.
7 days a week, 8 AM to 9 PM Eastern.
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