Buying out your partner or selling together: how do you choose?

TLDR: If one of you wants to stay in the house after the divorce, that partner can buy out the other. That is only possible if that partner can bear the mortgage alone and the bank cooperates. If that does not work, selling together is the logical choice.

Buying out your partner means that the partner who stays in the house buys the other's share of the home and takes over the mortgage alone.

You are separating and one of you wants to stay in the house. Perhaps because of the children, the neighbourhood or simply because you like the house. Then the question is on the table: buy out or sell together?

In this blog, you can read how a buyout works, what it requires and when selling is a better fit.

How does buying out your partner work?

The partner who stays pays the departing partner their share of the surplus value. The surplus value is the value of the home minus the remaining mortgage. If you each own half, the departing partner is entitled to half of the surplus value.

An example: if the home is worth 600,000 euros and there is a 400,000 euro mortgage on it, the surplus value is 200,000 euros. The buyout amount is then 100,000 euros. With other agreements in a prenuptial agreement or a cohabitation agreement, the division may turn out differently.

What is needed for a buyout?

• You must be able to bear the mortgage alone. The lender looks at your income and any alimony.
• The buyout amount must be financed: from your own money, through a higher mortgage or by taking over the existing mortgage.
• You need a current value of the home. In a divorce, the bank often asks for a valuation report. Also read our blog about how the valuation can affect your housing plans.
• The notary draws up a deed of division and amends the mortgage deed. Both partners sign.
• The bank must release the departing partner from joint and several liability. Only then is the buyout complete.

When is selling together better?

Selling together is the obvious choice if neither of you can bear the mortgage alone, if the bank does not agree to release one of you from joint and several liability, or if you both want a fresh start.

With a sale, the mortgage is paid off at the notary from the proceeds. What remains, you divide according to your agreements. After that, you both look for a new home: one sale and two purchases.

Why does the choice start with the value?

Whether you buy out or sell: everything starts with what the home is worth. That value determines the buyout amount or the proceeds. An independent valuation gives you both the same starting point and avoids discussions about assumptions.

How does Hier Makelaars help?

If you choose to sell, we guide the entire process, from the valuation to the transfer. After that, we help each of you buy a new home. Read more about selling with Hier Makelaars.

Frequently asked questions

How much do I have to pay my partner in a buyout?

With equal ownership, half of the surplus value. The surplus value is the value of the home minus the remaining mortgage.

What if there is no surplus value?

Then there is a residual debt. You agree together on who bears which part.

Who pays the notary costs in a buyout?

You decide that yourselves, for example half each or entirely by the partner who stays.

Can I buy out my partner in instalments?

That is possible, if you record it in a settlement agreement or the deed of division. Note: agreements that are not on commercial terms can be treated as a gift for tax purposes.

Are you in doubt between a buyout and a sale? First have the value of the home determined or read more about selling with Hier Makelaars.