What Is a Divorce Buyout?

"Divorce buyout" is a real estate term for what occurs when one party in a divorce buys out his or her partner's share in a home they have owned and, usually, resided in together.

Required Steps to Proceed with Divorce Buyout

First, the involved people decide who is going to live in the house and who will have his or her share bought out. Second, the person who will own the property refinances it to replace the existing mortgage and compensate the party who was bought out. Third, both parties sign a consideration letter and quitclaim deed for the property, which is then filed in the county where the property is situated.

Sometimes, the judge will require both parties to liquidate the assets of the property and split the profit from the sale 50/50 with the involved parties. This way is hassle-free, since you will not have to decide who will get the property and who will get bought out.

Specific Rules of Divorce Buyout for Your State

The process is not the same for every state, so you should refer to your specific state's guidelines and familiarize yourself with them before initiating the divorce buyout.

Remember that if a date isn't agreed upon to complete the divorce buyout or one of the involved parties is apprehensive about signing the contract, it can prolong the process for an indefinite period.