Guide to Marital Home Clauses in a Virginia Separation Agreement

Negotiating the Marital Home in a Virginia Separation Agreement

Virginia circuit courts have the power to distribute the marital equity in the marital home at the time of divorce.1 They also have the authority to award temporary possession to one spouse while the divorce is pending.2 However, court decisions come with risks and added cost. Furthermore, courts are limited by Virginia’s equitable distribution law when it comes to deciding what to do with the marital home.3 A separation agreement can give you added flexibility and reduce the costs and uncertainty that come with a divorce trial.4  When addressing what happens to the marital home in a Virginia separation agreement, you generally have two options:

  1. Include a buyout clause that states one spouse gets to stay in the marital home upon paying money to the other spouse, or
  2. Include a sale clause that mandates that the parties sell the marital home and split the sales proceeds.


If you wish to stay in the marital home, you may want to consider negotiating a buyout of your spouse’s marital interest. A buyout is an amount you pay to your spouse to settle his or her marital interest in the property.  If there is a home mortgage and your spouse is named on the mortgage, he or she will likely demand to be removed from the mortgage in addition to receiving money through a buyout.  This can be accomplished by a refinance of the mortgage.  

The Buyout Clause Should State the Length of the Buyout Period and the Buyout Terms

The buyout period is usually short, but you can negotiate the length of time.  Refinances usually do not take more than 60 days to complete from the time of submission of the loan application.  To give some cushion, the deadline to complete a buyout is often set a month or two after this, so about 3-4 months.  Generally, the terms of the buyout include:

  1. The spouse wishing to stay in the marital home must pay a set amount of money to the other spouse by a certain time period.
  2. If the spouse wishing to stay in marital home is on the mortgage, he must refinance the mortgage or otherwise remove the other spouse’s liability within the buyout period.
  3. After the spouse receives the buyout money and is removed from the mortgage liability, he or she agrees to execute a deed transferring sole ownership of the residence to the spouse remaining in the marital home. If only one party is on the deed to begin with, there is no need for a new deed.

A Virginia separation agreement will usually state that if the buyout option is not exercised in the required time period, then the other party has the right to demand a sale. The sale language discussed in Option 2 below is inserted into a sale clause that comes after the discussion of the buyout terms.

How Long Should the Buyout Period Be?

The buyout period is usually three to four months. Buyout periods can be extended, but there are pitfalls to doing so that need to be addressed.  You can agree to extend the refinance period to a longer period of time, such as several years, if immediate financing cannot be obtained.  However, doing so presents downsides to the person not living in the home.  For one, the non-resident spouse will remain obligated on the mortgage but will not have use of the property.  Assuming they are named on the deed as well, they also will be legally obligated to pay real estate taxes.  Although the spouse remaining in the home can agree to be responsible for all payments, if he or she fails to follow the agreement, the mortgage company or tax authority can go after either individual to recoup the money owed.  

Why Might You Want an Extended Buyout Period Despite the Pitfalls?

Why extend the buyout period when extra liability attaches?  Sometimes spouses agree that keeping the marital home intact is the best thing for their children.  They may want to negotiate a way to make this work and accept the additional risk that comes with this.  It may take a spouse three years or more to build up the credit needed to qualify for a loan to refinance the mortgage, especially if they have been out of the workplace and do not have an income history.  To address the additional risk that comes with an extended buyout period, it is good practice to include protective language in the separation agreement.  If spousal support is required and it equals or exceeds the monthly mortgage payment, then a possible protection would be to allow for payment of the mortgage to count as credit for the spousal support obligation.  Additionally, a sale trigger clause can be included.  If the spouse that remains in the marital home fails to pay the mortgage, this could trigger a right to have the property immediately placed on the market for sale.  For spouses that are going through a nasty divorce, no amount of protection may be worth the extra risk associated with an extended buyout period.  The thought of having a continued obligation with the other spouse beyond divorce may simply cause too much heartburn.  

How is the Buyout Amount Determined?

The buyout amount is usually determined by first establishing the total marital equity of the home.  Generally, the entire value of the home is marital if the home was acquired during the marriage and was not inherited or gifted from a third party to just one spouse.  If a portion of the home is deemed separate property, then this portion should not be included in the equity calculation.  Part marital and part separate property is called hybrid property.  The usual method for calculating the equity in a marital residence (that is fully marital) includes determining the value of the residence and subtracting the mortgage balance and any other liens on the property.  Additionally, the hypothetical transaction cost of a sale can be factored in.   The commission for real estate agents, closing costs, and other fees connected with the sale are added up to get the total transaction cost of a sale.  Expect to pay around 8% or more of the total sales price as the transaction cost.  If repairs are needed to sell the home, this amount could be higher.  Below is an example of a hypothetical calculation for the buyout amount based on a 50/50 split of the estimated net proceeds:

  • Sales Price: $500,000
  • Outstanding Mortgage Amount: $200,000
  • Estimated Transaction Cost at 8% of Sales Price: $40,000 (8% of $500,000)
  • Estimated Net Proceeds:  $260,000 (Sales price – mortgage amount – transaction cost)
  • 50% of the Estimated Net Proceeds: $130,000
  • Buyout Amount: $130,000

IMPORTANT CAVEAT:  The above calculation represents a typical negotiation scenario, but the power of a separation agreement is that you have the flexibility to factor in other elements of the total property division when coming up with a buyout amount.  For instance, one spouse could agree to waive claim to the other spouse’s retirement account in exchange for having to pay less or nothing for the buyout of the marital home.  


If the parties desire to sell the marital home immediately, or a sale is triggered because one spouse fails to meet the buyout criteria, the following sale provisions should be considered in the separation agreement:

1. Choice of Real Estate Agent

The real estate agent should be listed in the agreement.  Desirable characteristics to look for when choosing a real estate agent include:

  • Value focused.  A good agent will do an analysis of your home and make recommendations on what actions you can take to make the most money from your investment in a reasonably quick timeline.  The agent will recommend ways to improve the appearance of the home to encourage a quick sale. The following are potential value focused recommendations:
    •  Cosmetic improvements: Add a fresh coat of paint to unsightly walls and old cabinets, replace worn carpet, and consider staging the property.  Major renovations generally are not recommended during a divorce as they take substantial time, are costly, and are not guaranteed to increase the overall profit.   Buyers often have their own tastes and would prefer to do the renovations themselves.  
    • Servicing.  Get major systems (HVAC, hot water heater, windows, and roof) serviced prior to listing.  If a system is very old, consider offering a home warranty or a credit to the buyer.   
    • Crawlspace:  Have a termite/moisture company provide a clear letter before listing so there are no surprises as the seller typically will be obligated to make any required repairs under the house.    
  • Proactive.  The agent should be prepared to fix a problem before it happens.  
  • Strong negotiator. As of the beginning of 2024, the market has shifted and buyer/seller negotiations are back in full force.  There are new agents who have never experienced the negotiation process.  Do not make the mistake of selecting a brand new agent lacking negotiation experience. 
  • Great Marketer.  Marketing in a number of different mediums helps to secure a buyer for the property.  The agent should have a marketing plan that includes the following: advertising in the newspaper and online, neighborhood mailings, social media marketing, video marketing, open houses, and database touches.  
  • Great Coordinator.   The sale of real estate involves many moving parts and requires collaboration with diverse professionals.  A good real estate agent helps coordinate and oversee the sale process to make sure everyone else is doing their jobs and that everything comes together seamlessly and on time.  The agent’s duties include listing preparation (improvements, inspections, contractor coordination), marketing/advertising, negotiating an offer and confirming the buyer’s qualifications with their lender, transaction management once the property is under contract, regular lender check-ins, coordinating home inspection repairs, meeting the appraiser and supplying them with comparable sales to justify the pricing, constant communication with the buyer’s agent/lender/closing attorneys and more.  

There are plenty of good real estate agents to choose from in Hampton Roads, Virginia, but I personally recommend Maggie Fanney and Stephanie Jarvis Caskill of the Linda Fox-Jarvis Team at Berkshire Hathaway HomeServices RW Towne Realty.  They meet all of the criteria listed above and would be an excellent choice. 

2. Asking Price for the Marital Home

The real estate agent often is used to determine the asking price for the home.  The real estate agent likely will look at comparable sales over a recent period of time, such as the past six months.  Comparable sales involve recent sales of homes that are of similar size and style and within the same neighborhood.  Alternatively, parties may bargain to have an appraisal conducted by a certified residential real estate appraiser to set the asking price.  

3. Procedure for Accepting Offers

At what point does an offer have to be accepted?  A common method to resolve disputes about offers is to require the acceptance of an offer that is 95% or more of the asking price.  Parties should also consider what to do if no offers are made within a reasonable time for this amount.

4. Possession of the Marital Residence and Payment of Expenses Pending Sale

Unless the parties intend to remain in the marital residence together until the real estate closing, they should include a clause that grants sole and exclusive possession to the person who gets to stay.  Typically the person who gets to stay in the marital residence takes on most of the expenses as well, but this may not be the case if there is a big difference in income levels.  If the party out of the house is the sole provider for the family, he or she can offer to pay the mortgage and household bills as a contribution toward “spousal support.”

5. Mortgage Interest Deduction

 If the parties are not eligible to file a joint tax return or prefer to file separate returns, the agreement should state who gets to claim the mortgage interest deduction.  However, this may not matter if the parties intend on taking the standard deduction instead of itemizing.  

6. Division of Household Belongings

The separation agreement should address how household belongings are to be divided prior to the closing of the home.  Sometimes household items are apportioned early in the process before an agreement is signed.  If that is the case, the agreement should mention that the parties have already divided their belongings and agree to the division made prior to the separation agreement. For spouses going through a contentious divorce, the agreement should provide a date and time that the party out of the home can come to retrieve his or her belongings.  Sometimes spouses wish to have third parties present to witness and record the removal of items to protect against accusations of improper taking. 

7. Necessity of Repairs and the Division of Their Cost

The real estate agent can make suggestions regarding the necessity of repairs and maintenance to maximize the sale value.  The separation agreement should include provisions regarding how to determine the necessity of repairs and the division of their cost.  It is not unusual for one party to pay for repairs upfront and then get reimbursed for a portion of the payment at the real estate closing.  

8. Moving Costs

Generally, each spouse pays for his or her own moving costs.  However, this can be negotiated.  

9. Division of the Sales Proceeds at the Real Estate Closing

After the sales proceeds are applied to the the mortgage, liens, settlement costs, commissions, any required reimbursements and other sales expenses, the net proceeds are distributed to the parties.  Typically, spouses agree on a 50/50 division but a different division can be negotiated.  One spouse may prefer to receive less of the proceeds in exchange for leaving his retirement untouched. This is called equalizing assets.  Spouses can also agree to use the sales proceeds to pay off any joint unsecured debts, such as personal loans and credit cards. Unless spouses are amicable, it makes sense to ask the real estate closing agent in advance to prepare separate settlement checks.  


For many spouses, the marital residence is the most valuable asset they own.  If divorcing couples take into account the above considerations and drafting suggestions, they will better be able to protect their interests in their home and achieve a fair settlement.  Having a clear and comprehensive agreement regarding the marital home helps reduce the chance of future fighting and the added costs and stress that come with it.

Contact an Experienced Virginia Beach Separation Lawyer Today

If you need help addressing the marital home in your Virginia separation agreement, please give Jordan Fanney a call at 757-491-1841 or send him a message through his online contact form.  

Related Posts

For information on how to prepare for a Virginia divorce consultation, please see Prepare for Your Virginia Divorce Consultation in Six Steps.

For information about the divorce process in Virginia, please see The Divorce Process in Virginia.

About the Author

Virginia Beach Separation Lawyer - Jordan Fanney

Jordan A. Fanney, Esq. is an experienced Virginia Beach separation lawyer who works for Poole Brooke Plumlee PC.  He practices family law in Virginia Beach, Chesapeake, Norfolk, Portsmouth, Suffolk, Hampton, Newport News and the surrounding area.
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About the Contributors

Maggie Maddox Fanney | REALTOR®
Maggie is a Virginia Beach native who moved back to the area in 2020 after a very successful real estate career in New York City. Her deep knowledge of marketing and an accounting background gives her the perfect blend of analytical and creative thinking, which she constantly leverages to find and secure her clients’ perfect home.  Since her return to Hampton Roads Maggie has thrived in her real estate career specializing in relocations & luxury homes. Maggie is a graduate of the University of Virginia and lives in Virginia Beach with her husband and daughter.  

Maggie Fanney | 757-513-1367 | |

Stephanie Jarvis Caskill |  REALTOR®
Stephanie chose to follow in her mother’s footsteps, joining the real estate world in 2010 and is now her mother’s real estate partner and the Linda Fox-Jarvis Team Leader. Having been born and raised in the Hampton Roads area, Stephanie has intimate knowledge of all the neighborhoods in the area.  She is extremely organized and her attention to detail ensures every transaction is smooth and successful as well as being an enjoyable one for her clients. Stephanie is a graduate of Dickinson College and lives in the Great Neck area with her husband and daughter.

Stephanie Jarvis Caskill | 757-335-1202 | |


  1. Va. Code § 20-107.3 ↩︎
  2. Va. Code § 20-103(vi). ↩︎
  3. For instance, Virginia circuit courts cannot order a sale of the marital home unless it is jointly titled. Va. Code § 20-107.3(C) ↩︎
  4. If the case is submitted to a court for a decision, the judge is required to apply the factors in Virginia Code 20-107.3(E) (the equitable distribution statute) before making a ruling.  The judge typically will order a sale (for jointly titled property) or make an award of money that the non-owning spouse has to pay to the other party to satisfy his or her marital interest.   Courts are generally loath to require parties to remain co-owners of a residence for extended periods of time after divorce since additional issues can come up after the final divorce hearing. Additionally, courts cannot create waivers of interest in some marital assets in exchange for a greater award of other marital assets.  Thus, parties have much more flexibility in crafting a desired division of the marital residence through an agreement.  ↩︎

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