During a divorce, everything that a couple owns is often divided between the two parties. It is not uncommon for there to be disagreements as to who should get what. If a couple owns a home together, there are several possibilities: either the house is sold and the proceeds shared between both, one of them gets the house in lieu of other assets, or one pays a certain amount to the other for the house. In any of these cases, it is important to have the property appraised so that the market value of the house can be established. Only when the current value of the house is determined, can a fair and thorough settlement be reached.
This is where a professional real estate appraiser comes in; the services of an unbiased professional conducting an appraisal will help you in the following ways:
- To know the current selling value, which will help you decide whether to sell or keep the house. This will help in reaching a fair division of the proceeds after deducting the mortgage balance, capital gains and closing costs, etc.
- If one of the spouses keeps the house, the current value will help in determining how much the other spouse must be paid in lieu of their share in the property.
- In case the house is one which was purchased earlier by one of the spouses but both lived in after marriage, the value of the house at the time of marriage may also need to be determined, to see if the value increased in the time from the marriage until the divorce. This is because the increase in value is usually considered marital property even if the house itself belongs to one of the spouses. The amount of increase needs to be divided fairly between the two spouses.
The appraisal itself can be conducted in one of the several ways including:
- Each of the spouses may appoint their own appraisers
- Both parties may agree on a neutral appraisal
- The court may appoint an appraiser
The appraiser will take detailed notes about the condition and quality of the construction; they will take pictures and they will measure the improvements to establish the gross living area. They will check for any defects that may impact the final value of the house; they will also view the interior and examine the quality of materials and other features that could impact the value. They will then prepare and submit a report summarizing the results.
An appraisal is important any time you thinking of selling your house, but during a divorce, it can become absolutely crucial. An independent appraisal helps avoid friction and facilitates the smooth sale or transfer of ownership to one of the spouses.