Getting a divorce is never simple, especially for couples who own property. It can be difficult for couples to decide what to do with their house. Should one of them continue living there or should they sell the house?
Today’s real estate market has made this decision even more complicated because it may be tough to sell your house but it also may not be affordable for one person to continue living there after the divorce.
Couples determine what happens to their property during the settlement agreement. As part of the property settlement, an appraisal of the property will need to be completed. Real estate experts say that in cases of divorce, it is even more important to make sure the appraisal is fair and accurate to help divide the value of the property.
Divorcing couples negotiating a property settlement agreement should be aware of the impact an appraisal may have on their property settlement and decision to sell the house. Below are the factors that should be considered by divorcing couples with property.
Real estate appraisals are based on comparable sales: to determine fair market value, appraisers look at the individual property and make notes about unique features. Then, they look at comparable properties that have recently sold in the area. Using recent sales and the property’s special features, appraisers determine a fair market value for the property. Couples should keep in mind that the tax assessed value is not the same as a third-party appraisal used in the real estate market.
Unique features may be evaluated different depending on the appraiser: appraisals can vary depending on the individual appraiser, especially if a home has unique features like a greenhouse or four-car garage. Homeowners who have unique features may benefit from getting another third-party appraisal to compare to the first appraisal to make sure a true market value is being determined.
Fair market value is needed to determine the amount of equity a home has. This can be very important for couples divorcing. Equity is calculated by using the appraised value and the amount still owed on the property.
Recent reports show that more appraisals are being done during divorce proceedings because more couples want to make sure they know today’s value of their property so they can negotiate a fair settlement.
Couples getting divorced who have property should consult a divorce attorney to make sure they are addressing all the issues that should be considered during their divorce negotiations.
Source: Forbes, “Seven Key Points Divorcing Women Need To Know About Real Estate And Real Estate Appraisals,” Jeff Landers, Jan. 22, 2013