How to Buy Out Your Home During A Divorce
When you get a divorce, figuring out how you and your spouse will divide your possessions is often one of the most challenging aspects. While it can be difficult to part with sentimental treasures, funds, and other items, deciding on a plan for the marital home is usually the main point of contention.
Each couple handles this phase of their divorce differently. Some couples may choose to sell the home and split the profit, while others might choose to rent out the property and share the responsibility. However, most couples opt to have one spouse take the family home over the other. One of the best ways to complete this transaction fairly is for one spouse to buy out the other.
If you are going through a divorce and you think that buying out your home might be the best option, make sure you understand what is involved. Discover how the buyout process works and make sure you know what you can expect as either the buyer or the seller.
Understanding Property Division Laws
Oregon is an equitable distribution state, which means all marital property is subject to division. Anything the couple shared or acquired during their marriage could be split between each party in a way that is fair and reasonable, though not exactly equal. In other words, the assets do not need to be split exactly 50/50, but they must be fair. The marital home, however, can be very difficult to divide.
For most couples, their home is the most valuable asset they own. If a couple decides that one spouse will buy out the other in a divorce, they need to do so in a way that works out fairly from a financial perspective.
First, you should start by appraising the house.
Real estate values fluctuate frequently, so having the house appraised is essential if you want to know the true value of the home.
Take a look at any debts associated with the home.
If you still owe a mortgage, property taxes, home equity loans, or any other property-related expenses, make sure you take this into consideration when determining the overall value of the home.
Refinance the home.
In order to start fresh, refinancing the home might be your best option. However, make sure you speak with a financial advisor and your lawyer before deciding if this is the best course of action.
Buy out the other spouse.
To buy out the other spouse, you need to pay for their portion of the value of the home. In some cases, this might also factor into your property division. For example, instead of paying a specific sticker price, you might buy out your spouse by allowing them to keep additional marital assets.
Factors to Consider
Before you go through with a buyout, there are several factors you need to consider, whether you are the purchaser or the seller. Either side could stand to lose money in the process, just as either side could come out on top. For this reason, it is extremely important to discuss your situation with a financial advisor and your attorney. In many cases, couples negotiate a solution over a longer period of time so that a buyout is more feasible. For example, the buying spouse might make payments over a predetermined time frame, which can be a beneficial option for both parties.
Each divorce is different, which is why it is so important to seek professional help from an experienced Oregon attorney. If you are going through a divorce and you aren’t sure about what you should do with your home, discuss your case with our knowledgeable divorce lawyers.
Contact McKinley Irvinto discuss your divorce with our firm.