The property division process during divorce requires the division of both assets and financial obligations. For many couples, the home where they live together represent their largest investment and also their biggest debt.
Their home equity can be worth tens or hundreds of thousands of dollars, and the remaining balance on the mortgage can be as much or even more. To address the home effectively and ensure a fair final outcome, spouses generally need to agree on what it is worth. When there are disputes about valuation, how do spouses settle them?
Professional guidance may be necessary
The amount originally paid for the property is not necessarily its current fair market value. The longer the spouses have been in the home in the more the local market has changed in subsequent years, the greater the difference between the amount paid and the current value of the home.
Spouses sometimes work with a real estate agent to estimate a potential listing value for the home. However, personal priorities can color the value estimated by a real estate agent. If one of the spouses wants to stay in the home and pay the other spouse for their portion of it, the estimate might skew toward the lower end, while those seeking a payout might push for the highest possible value.
Spouses often need a neutral professional, such as an appraiser, to evaluate the home and compare it to similar properties that recently sold in the area. In high-conflict cases, both spouses may obtain an appraisal.
Knowing what key assets are worth is an important component of the property division process. Spouses facing disputes about asset valuation and distribution benefit from having legal and other professional guidance to help ensure that they obtain a fair outcome in the divorce.