My WS moved out over 2 years ago. She filed last year. I need and want all of this to be done and over with. I tried for a long time and it is time for me to move on with my life. I need to buy my ws out of her half of the house. I have never done this before so I was trying to learn more about doing this. The townhouse is worth right around $180k. The remaining balance is $135k. Can I just refinance the house for say, $157.5k and just give my ws her half of the equity which is $22.5k? Is that how that works? Any advice anyone can give me it would be appreciated. I need to be prepared and I am tired of paying my lawyer fee's.

Yes, you should be able to do this, once your w/X and you agree on a price. But first, you need to set the buyout price, and it is not the Market Value. Ask a realtor to do a market analysis on your home. They should provide a list of recent sales which are comparable to your home. Then you can add and subtract features to arrive at a market price. (Your suggestion $180,000) From that price, deduct at least 6% for the fee you would have paid to a real estate agent to sell your home. ($180,000-10,800=$169,200).

Then, if you are certain you will refinance anyway, you get an appraiser to calculate the value of your home. This typically falls at least 10%-20% below the market value or a range of $162,000-$144,000.
These appraisal values are typically where you want to start your negotiations, not the "market value". Then you set the buyout price, deduct the mortgage, and split the difference.
You do not need a lawyer to calculate the figures, but you may need one to document the buyout price. My X finally bought me out 6 months after the agreed upon date, and fought the price the entire time - even though he'd agreed upon it.
I hope this helps. My friend's X gave into the market price, thinking he'd make it up elsewhere - now he feels screwed.