This is the scenario:
Our house is worth about $250,000 (we think). We owe about $200,000, so we have $50,000 equity. We are divorcing amicably and both want a solution that is fair and makes sense.
Part of our settlement is that we'll split the proceeds from the sale of the house (and we assume I'll sell it within the next few years).
Option 1 (as described by my husband): "Get the house appraised or use a value we both agree on. Subtract what is still owed and divide that in half. Subtract $10,000 from my half to offset closing costs and and some maintenance and the resulting number would be what you "owe" me for the house if you were buying me out. We can subtract that amount from your half of the 401k. [FYI, we're also splitting the 401k.] We refinance into your name and you might be able to get a home equity line in addition to the mortgage to help finance any repairs going forward. You would then get all of the proceeds upon the sale of the house."
OR Option 2:
"Instead of the 401k offset, we can say that you pay me the buyout amount as calculated above upon the sale of the house. That amount would be reduced by the difference between the appraised amount and the sale price. So, we calculate it based on now, but there's a safety in case the value of the house goes down."
I think I understand the two scenarios, but I don't know whether either one is clearly a bad idea. Any help is greatly appreciated.