Divorce and the Family Home in Annapolis: Buyouts, Sales, and Equity Disputes

Your marital home is likely one of the most valuable assets you own. It is also very important to you emotionally. Deciding how to divide the house in a divorce can be one of the most difficult decisions couples make. There are multiple ways to accomplish division of a home, such as through buyouts or sale of the home. However, equity disputes may still arise. It is important to have a skilled divorce lawyer at your side to help deal with these issues and protect your financial interests. 

At RPM Law, our Maryland family law attorneys help you with the division of your marital home and other assets. We guide you through every step of the divorce process to protect you and your family.     

Maryland Is an “Equitable”, not “Equal” Distribution State

This means the court divides marital property in a way that is fair, not necessarily equal.

The family home may be:

• Marital property
• Non-marital property
• Part marital and part non-marital

How the home is classified determines how equity is divided. A home is typically considered marital property if:

• It was purchased during the marriage, or
• Both spouses contributed to mortgage payments, improvements, or upkeep

Even if one spouse’s name is not on the deed, they may still have a marital interest.

Step One: Determining Whether the Home Is Marital Property

Courts look at several factors to determine ownership:

• When the home was purchased
• Who paid the mortgage and household expenses and source of funds used
• Whether marital funds were used for renovations and upkeep
• Whether one spouse contributed non-marital funds towards the purchase of the home

If one spouse owned the home before the marriage, the court may treat part of the equity as non-marital and part as marital, depending on contributions made during the marriage.

Step Two: Calculating Equity in the Home

Equity is the home’s fair market value minus outstanding mortgage debt and any other encumbrances. During divorce, equity calculations often require:

• A professional appraisal
• Mortgage payoff statements
• Documentation of home improvements
• Evidence of premarital or inherited contributions

Disputes about the home often happen over:

• Whether the home is undervalued or overvalued
• Whether one spouse should receive credit for premarital equity
• Whether improvements increased the home’s value
• Whether one spouse used separate funds for the down payment

Options for How to Divide the Family Home

Option 1: One Spouse Buys Out the Other

A buyout is common when:

• One spouse wants to keep the home for stability
• Children attend local schools
• The home has sentimental value
• The housing market makes selling unattractive

A buyout requires:

• Agreeing on the home’s value
• Calculating each spouse’s share of marital equity
• Refinancing or assuming the mortgage 
• Paying the other spouse their share 

Option 2: Selling the Home and Splitting the Proceeds

Selling is often the cleanest solution when:

• Neither spouse can afford the home alone
• The mortgage cannot be refinanced or assumed
• The equity is substantial and both want liquidity
• The spouses cannot agree on a buyout price

After the sale, proceeds are divided based on:

• Marital vs. non-marital contributions
• Credits for premarital equity
• Credits for post-separation mortgage payments
• Any court-ordered adjustments

Option 3: Deferred Sale (“Use and Possession” of the Home)

Maryland courts may grant use and possession of the family home to one spouse, usually the primary caregiver, for a limited time after divorce. This allows children to remain in the home and maintain stability.

During the use-and-possession period:

• The home is not sold
• One spouse lives in the home
• The court assigns responsibility for mortgage, taxes, and upkeep

After the period ends, the home is typically sold or one spouse buys out the other.

When to Involve a Maryland Divorce Attorney

Because the family home is such a high-value asset, even small valuation errors can cost thousands of dollars. An attorney can help you:

• Determine marital vs. non-marital interests
• Obtain accurate appraisals
• Negotiate buyouts or sale terms
• Protect your equity rights
• Resolve disputes over contributions and credits

Get Help With Your Annapolis Divorce and the Division of Your Family Home

The right attorney can make all the difference in your divorce. From dividing the interest in your family home to the division of individual assets, we know how important your things can be to your financial future. 

Our team at RPM Law are ready to help with your family law needs. Contact us today for a consultation.