Keeping the House in a Texas Divorce: Buyouts, Sales and Equity

Can I keep our house in Highland Park after divorce?

Yes, if the division gives it to you and you can carry it on your own. A house bought during the marriage is community property, and either spouse can be awarded it. In practice, keeping it means paying the other spouse for their share of the equity and qualifying for the mortgage alone.

Homes in Highland Park, University Park and Preston Hollow often hold a large share of a family's net worth. Keeping one can mean giving up most of the liquid assets, so it is worth comparing what you would have after a buyout with what you would have after a sale.

What happens if both spouses want to keep the family home?

If the spouses cannot agree, the court decides as part of the just-and-right division under Texas Family Code § 7.001. A judge can award the house to one spouse, order it sold, or approve an agreed plan for continued co-ownership.

• Where the children will live most of the time and how much stability matters to them.
• Whether the spouse asking for the house can refinance and keep up with payments, taxes and insurance.
• What other assets are available to offset the house.
• Any separate property claim either spouse has in the home.

Mediation often solves this better than a trial, because the spouses can agree to terms a court is unlikely to order, such as a delayed sale after the school year.

Do we have to sell our house to finalize a divorce?

No. A divorce can be finalized with the house still owned, as long as the decree says who gets it or how and when it will be sold. Some decrees order a sale on a schedule, with rules for choosing the listing agent, setting the price and splitting the proceeds.

Keeping a house jointly after the divorce can work for a set period, but it ties two former spouses together financially. The decree should cover who pays what, who lives there and what triggers a sale.

How do we divide equity in a house with a mortgage, and can I buy out my spouse?

Equity is the market value minus the mortgage and any other liens, and a buyout pays the other spouse their share of it. Start with an appraisal both sides accept, then decide whether to account for what a sale would cost, such as commissions and closing costs.

1. Agree on the value, by appraisal or a broker's opinion.
2. Subtract the loan balances to find the equity.
3. Apply any separate property or reimbursement claim.
4. Pay the other spouse's share in cash, from a refinance, or by giving them more of another asset.
5. Refinance or assume the loan so the departing spouse is released from it.

The refinance step matters. A divorce decree does not bind the mortgage lender, so a spouse who stays on the loan remains liable even after giving up the house.

What happens to a house purchased before marriage but paid off together?

It generally stays separate property. Texas decides character at the time title first arose, so a home bought before the wedding remains the buyer's separate property, including any increase in value from the market.

The community may still have a reimbursement claim under Texas Family Code § 3.402 if community funds paid down the principal of the mortgage or paid for capital improvements. That claim is for money, not ownership. The court resolves it on equitable principles, but the owner's separate estate may not reduce it by pointing to the years the family lived in the house: § 3.402 bars an offset for use and enjoyment of a primary or secondary residence. A spouse who paid toward the other's separate home should keep records of those payments.

Who pays property taxes while a divorce is pending?

The spouses decide by agreement, or the court decides in temporary orders. Texas Family Code § 6.502 allows a court to award one spouse exclusive use of the residence while the case is pending and to make orders that preserve the property, which in practice includes who pays the mortgage, taxes and insurance.

Taxes and mortgage payments made during the case can be raised in the final division. Keep proof of every payment and the account it came from.

How are rental properties, second homes and vacation homes divided?

Each property is treated on its own. A second home or rental bought during the marriage is presumed community property; one bought before the marriage, or with traced separate funds, can be separate. Rent collected during the marriage is generally community income even from a separate rental.

Rental portfolios are usually split property by property, sold, or kept by one spouse with an offset. Tax basis, depreciation taken over the years and the condition of each property affect what each is worth, so two properties with the same market value may not be an even trade.

For a vacation home in another state, a Texas court with authority over both spouses can award it, but it cannot change title to out-of-state land directly. It orders a spouse to sign a deed that is recorded where the property sits. See how John handles homes and investments or contact him about your property.