Splitting Property in a Divorce? Here’s Why You Need an Appraisal
The division of property is a complex and inevitable part of divorce proceedings for couples who have assets. Property, whether real estate, stocks or debts must be appropriately classified (whether non-marital or marital), valued and equitably dispensed to the satisfaction of both spouses or the courts.
The valuation of assets is a necessary and crucial step in splitting property. It establishes worth and is best done before couples dispense with property, marital or otherwise. Relying on a guestimate of an asset’s value is prone to result in a dispute between spouses in an environment of already heightened negative emotions. Plus, a court can set aside a divorce settlement if it finds that the division of valuable assets was based on an inaccurate or questionable value.
An appraisal conducted by a qualified, professional appraiser can provide an accurate, impartial estimate of value that can confidently be used by spouses and the courts to settle property division issues.
The matrimonial home
The marital home is an important asset to divorcing couples. In many instances, it is their largest and most valuable property. Among the options divorcing couples have for dividing the matrimonial home are to:
- Sell the house and share the equity
- Have one spouse buy the other out of ownership and retain possession necessitating the refinance of the mortgage
Regardless of the option a couple chooses, the home’s current market value will be necessary. A formal home appraisal is the best option to determine same.
The home appraisal differs from other types of appraisal. It involves an appraiser visiting the home to critically assess its interior and exterior features and amenities. A home’s square footage, condition, type of construction materials and number of bedrooms and bathrooms are among the crucial things assessed. The appraiser also analyzes market trends and compares the home to recently sold homes with similar characteristics in the same market to determine a value.
Selling the matrimonial home
The sale of the matrimonial home makes it easier to divide its equity. A qualified appraiser can provide a valuation of the property so that divorcing spouses are aware of the current value and can calculate either spouse’s gross share of value.
The appraisal is also key for pricing the home for sale. Pricing the home for a sale based on guesswork can be risky. Under-pricing your home aside, the buyer’s mortgage lender will likely commission its appraisal to ascertain the home’s value. If lower than the sale price, the transaction may be canceled.
Ordering an appraisal provides a more accurate means to value the home and determine a listing price. The divorcing couple will consequently be better placed to negotiate with a buyer.
Buyout of the matrimonial home
One spouse may opt to buy out the other to retain the marital home necessitating a refinance of the mortgage. A home appraisal provides divorcing spouses with an independent estimate of value with which to finalize a spouse’s share of the property.
Having a formal appraisal can also make the process of refinancing the mortgage move more quickly with the lender, particularly if the appraiser used is one approved by the lender.
Property brought into a marriage belongs to the owner. However, gains in value on that property made during the marriage must be shared between spouses upon divorce. This introduces a retrospective element into the process of property division. An appraisal can be used to determine the value of the property at marriage and at divorce so that the change in value can be calculated and any gain fairly apportioned between spouses.
Make your home appraisal ready
Once you and your spouse have decided to sell your home and have selected an appraiser, it is best to ensure that the home is appraisal ready so it can be assessed for its highest and best value. Repair any lagging maintenance issues and declutter and clean both the home’s interior and exterior so the appraiser can make proper observation of the home. Also, make a list of all the improvements you’ve made to the home to be presented to the appraiser.
Do you require divorce appraisal services in Vancouver?
If you are going through a divorce and require a home appraisal in Vancouver, contact us at Adlaw Appraisals. Our team of appraisers is adept at a variety of appraisal types, including those relevant to divorces.
Give us a call today for a consultation.