Should I buy the other spouse out of the home?

On Behalf of | Jun 28, 2021 | Property Division |

Divorcing Texas spouses need to be careful about becoming “house poor” in a divorce. They may each be attached to the family home, and one of them thinks about buying out the other’s share. There are several considerations before they reach that decision.

Carefully consider whether you can afford it

The biggest danger is biting off more than you can chew after the divorce. For better or worse, your life will change financially. Two incomes will now need to support two residences as opposed to one. In order to buy the home, you would need to use much of your asset base to pay the other spouse for their share. Not only would this leave you without a cushion, but it also may leave you without a diversified investment portfolio. Nearly all of your assets would be in real estate.

You may be willing to pay for stability

On the other hand, you may want to provide the children or yourself with stability. Getting divorced is difficult enough, and having to find a new place to live would compound the shakeup in your life. However, you should be prepared to pay for that stability. The biggest consideration has to be whether you are able to afford it. Since Texas is a community property state, you would need to pay your spouse for half of their equity and the price increase in the home. That could be difficult in a hot real estate market.

A divorce attorney could help you with property division issues. When you have a home, you own a tangible and valuable asset, and it presents additional issues in the divorce. The two spouses could disagree about the equity or the value. An attorney could help negotiate an agreement, keeping the case out of court.