For the majority of married couples, the most expensive item that they own is their house. During a divorce, the house becomes a marital asset whose value must be equitably divided between both parties. In order to divide the marital property fairly, the house must be accurately valued by an experienced appraiser. Depending on the characteristics of the property, this type of appraisal can be done in one of several ways.
Fair Market Value Appraisal
A fair market value appraisal is similar to what an appraiser would do before a house is listed on the market to be sold. The appraiser will look at the unique features of the home, any work or repairs that need to be done on the home, as well as the value of the home as assessed for tax purposes. Using this information, the appraiser will provide an expert opinion as to the property’s fair market value.
Comparative Market Analysis
Most commonly in a divorce case, appraisers will conduct a comparative market analysis. With this method, the appraiser will look for similar homes which have sold in similar neighborhoods, and come up with a home value based on those actual sales. This method is often viewed as more accurate because the listing prices of houses are usually very different from their actual sale prices.
Retrospective analyses are also common in divorce. In a retrospective analysis, the appraiser will come up with a value for the property as of a certain date; for example, the date the divorce was first filed, or the date of the marriage. These types of appraisals are useful when the housing market undergoes a dramatic shift or when one partner owned the property before the marriage.
Dividing Home Equity
Whenever a couple owns real estate, the equity in the property must be divided, regardless of whether or not one spouse is going to keep the home. Without an accurate appraisal, it is impossible to create a starting point for the negotiations regarding property division.
Usually, the appraiser will charge a fee that may be several hundred dollars. This fee will be split between the parties, and may be taken out of the final value of the house. In addition, if the parties are planning to sell the house, the cost of a real estate agent or broker may also be subtracted from the value.
Fairly and accurately dividing property and debts in a divorce case often requires the help of a skilled Washington family law attorney. The lawyers at Pacific Northwest Family Law have many techniques at their disposal to help divorcing couples split marital property in an equitable way, and achieve great successes using mediation, collaboration, and other dispute resolution methods.
To schedule a consultation, or to learn more about dividing marital property in a divorce, contact us today by calling 509-572-3700.