If you and your soon-to-be-ex are fighting over who is going to keep the house, a judge may weigh in on the final decision. However, before you get that far, you need to know both the worth of the property and what it will be worth to you. Reaching an agreement may be contentious and difficult, but you want that settlement to be based on full, accurate and a complete understanding of the value. Here are five things you need to know.
1. You’re Going To Need A Professional Appraisal.
The fair market value of a property is determined by an appraisal and that may depend on what’s selling in your neighborhood. Appraisals are based on “comps” – the records of completed sales of comparable properties in your market. The more recent sales there are; the more likely you can be sure that the appraisal price is accurate for your home in your area.
2. Special Features Count.
It could be that your home is the only home with two master suites or a swimming pool or an extra-large lot. Your appraiser will take the special features of your home into consideration. However, be aware that different appraisers may value these “extras” differently. If both you and your spouse get your own, independent appraisals, they may not be the same. If they are widely different, a judge may require that another appraisal be done independently of the two of you and who you know.
3. Special Features May Not Count The Way You Think.
One man’s castle may not be what the next man wants – at all. Be prepared to find out that your expansive green house or even that swimming pool may not add the value you expect to the appraisal of your home. In fact, they may not even recoup what you paid for them. Knowing what helps sell a home is part of an appraiser’s expertise. You may be disappointed, but the appraiser’s job is to be as accurate with his or her knowledge of the market as possible. Your job is to hire an appraiser who is familiar with your area and has expert knowledge of the real estate market.
4. You May Need A Historical Appraisal.
Let’s say that you or your husband owned the home you lived in together prior to the marriage. The home may have become marital property by virtue of you living in it together and both contributing to the mortgage depending on the laws of your state. Or, you may feel you deserve some recompense for the improvements to the home that you made or helped make. A historical appraisal would delineate what the house was worth at the time it became the home of your marriage. That value would be weighed against the value of the home today to reach a fair settlement. Be aware, in today’s up and down real estate market, you might want a historical appraisal to show a loss that could be claimed on taxes.
5. Equity Isn’t Money In The Bank!
Be realistic about the worth of the property. There are other costs involved. If you are liquidating it to share the proceeds, there is the cost of the sale. If it has accrued value, you will have to pay any capital gains beyond the granted exclusion on a primary property. The mortgage will have to be paid in full. That all of this into consideration — plus, the cost of maintaining the property until it sales – when you are negotiating a fair property settlement during your divorce.
Divorces are complicated. You are going to want to have a team of experts working with you and for you. That starts with an experienced Divorce Attorney who knows the laws of your state and how to use them to benefit you. You may also need a real estate professional, an appraiser and a financial advisor. To win a fair settlement in a divorce, you need expert help on your side!
About the author: Chad Taylor is a contributing writer to Realty Biz News. He enjoys writing about divorce law as it pertains to matters in real estate. For a professional opinion, please contact a Divorce Attorney for more information.