Getting an accurate house valuation is an important part of the divorce process when assets like real estate need to be divided fairly. Understanding how valuations work can help make this difficult time a little easier.
Why a Valuation is Needed
Determining the current market value of a house is necessary for several reasons during a divorce:
- To split the value of the asset equitably based on percentages stipulated in the divorce settlement
- To decide which spouse will remain in the house by buying out the other’s share
- To determine spousal or child support amounts if one spouse keeps the house
- To assess capital gains taxes if the house will be sold
Not having a proper valuation of the marital home can lead to financial disputes down the road. Hiring an independent, certified valuer provides a neutral estimate both spouses can rely on.
When to Get the Valuation
The valuation should represent the value of the home at the time of separation. If the market has changed significantly between separation and finalising divorce proceedings, an updated valuation may be warranted.
Timing is also dependent on who will retain ownership or if the house will be sold. The optimal time for a valuation is just before the divorce settlement is formalised.
The Valuation Process
An accredited property valuer will follow standard industry procedures to assess the house. This includes:
- Inspecting the interior and exterior to document the home’s physical details and condition.
- Researching sales of comparable nearby homes (“comps”) to establish current area pricing.
- Analysing all collated data about the property and market conditions.
- Applying accepted valuation methodologies to determine a value range.
- Preparing a detailed report substantiating their impartial market value estimate.
Spouses should disclose all details about the home, recent repairs or renovations, and issues impacting value. Withholding information can compromise results.
Using the Valuation
The divorce attorneys incorporate the valuer’s impartial market value conclusion into negotiations. Ultimately, the spouses must agree on who will keep the house and how to split assets proportionally.
If selling, the valuation provides a sensible listing price. If transferring ownership, it determines buyout amounts owed. Ongoing child support or spousal maintenance amounts may also be calculated based partly on the home’s value.
Ensuring a Fair Outcome
Divorce valuations give both spouses confidence in the equity of final property and support arrangements. While the process can seem intrusive and stressful, an objective, professional valuation protects the interests of all parties when dividing up real estate assets.
