Going through a divorce in Virginia can be a stressful time, especially when you and your former spouse are deciding what to do with the marital home. A popular way to take care of property division during a divorce is with a buyout.
What’s a buyout?
One party in a divorce wanting to keep the marital home is a common occurrence in many family law disputes. Since it’s unfair for one person to get the home and the other one to walk away with nothing, buyouts exist. If you want to keep the marital home in a buyout, you could pay your former spouse a specified amount of money equal to their share of the home. You might offer this amount in cash, trade your spouse another asset of that value or sell an asset assigned to you to come up with the buyout amount. After making that payment, you would have full ownership of this property.
How to calculate home buyout amounts
If a divorcing couple agrees on a buyout, they’ll need to determine their home’s value and what’s left on the mortgage. For example, a couple owns a home together that is worth $300,000. This couple currently owes $100,000 on the mortgage, giving the couple $200,000 in equity. Divide this number in half, and you’ll have each spouse’s amount of equity, which would be $100,000. You would pay what’s left on the mortgage and your spouse’s amount of equity to buy this home, which would make your final cost $200,000.
A buyout is a common way for divorcing couples to resolve home-related disputes. While it can be costly, a buyout allows you to retain the marital home after a divorce.