What is a buyout?
During a divorce, there are three typical ways that many spouses deal with the family home. Co-ownership is an option for some, whereas others sell the house as part of the divorce and split any remaining capital. Lastly, there is the option of buying out your ex-spouse. For many with children, this is the preferred option; one parent buying out the other so that dependants have the stability and continuity of remaining in the family home.
In short, if you want to buyout your partner, you will both need to agree that it is the correct course of action. Following a mutual decision, a market value of your home will need to be decided. The price of your home can be decided in a variety of ways:
- A value decided between you and your ex-spouse
- A value following a recent house appraisal
- Information from an estate agent about recent sales in your area
- Utilising online property sites with estimation tools
- Paying for an appraisal on the family home
Following an agreement on value and with your mortgage taken into account, a buyout can occur via the following methods:
- Paying a lump sum to your ex-spouse
- Paying a lump sum to your ex-spouse by refinancing the home and taking out a new mortgage
- Giving other assets to your ex-spouse that equal the value of their share
- Take out a secured loan
Dividing the home
When a couple seperates it is often assumed that everything will be split 50/50. However, this is not necessarily the case. If an agreement cannot be made, solicitors will often get involved and rally backwards and forwards until a settlement has been obtained. When dividing, just the home financial aspects such as mortgage payments and home improvements will be taken into consideration. Therefore, you could end up with a larger or smaller share in the family home other than the assumed 50%.
Put in simplistic terms, if your ex-spouse is granted a 30% share in a property worth £300,000 you would need to provide them with £100,000 in money or assets to buy them out. However, if you were granted a smaller share of the home, such as 40%, you would need to buy your ex-spouse out with 60% – £180,000. Your solicitor would be able to help with the entire agreement and buy out process.
Children and divorce
Children aged 18 and under are considered a priority by legal professionals during a divorce. Their welfare is paramount in the eyes of the law and this can make buyouts complex.
If you want to remain in the family home with your children and can afford to buy your ex-partner out, following an agreement, this is the ideal scenario. However, if you want to remain in the home with your children but cannot afford to buy your ex-spouse out or take out a mortgage alone, this is where proceedings can become trickier.
If your ex-spouse agrees, you may be able to buy them out despite not being able to afford to on the surface. Your solicitor may put forward the idea that you stay in the family home and offset your ex-partners property share by taking decreased child maintenance payments.
Selling the family home
In some scenarios, even if you want to remain in the family home for the sake of your children, an agreement cannot always be met between you and your ex-spouse. Whilst your solicitor can try and appease your ex on your behalf, sometimes a compromise will have to be made to save not only legal fees but your own mental health.
If no agreement arises in regard to your shared family home, it may be best to sell and split the value between you and your ex-spouse. Percentage shares will be decided mutually or via your solicitors.
You can share through an estate agent you both agree on. Otherwise, again, your legal representatives will have to become involved to reach a solution.
If you do want to wait for your family home to sell on the traditional market, you can utilise a cash house buyer. At WeBuyAnyHome, we can sell your house in as little as 7 days, fee-free. Our quick house sale solution is ideal for those who want a guaranteed sale and zero hassle. You can get a free cash offer from us in just 24 hours.