To fairly divide property during a divorce, it is necessary to take the value of individual assets into account. For many couples, the single largest asset that they own jointly is the home where they live together. Home values can be drastically different from one neighborhood to the next. Timing, the condition of the property and economic factors also influence the value of real property.
Who decides what a home is worth for the purposes of property division?
The spouses can agree on a value
Spouses can take control of the property division process by negotiating their own terms. In such scenarios, they might work cooperatively to establish an appropriate fair market value for the home. They might consult with a real estate agent or an appraiser. They might also agree on a value based on what they initially paid and what properties in the area currently command on the open market.
If spouses cannot reach an agreement on the value of the home, then a judge may ultimately decide what it is worth. Both spouses have the option of presenting evidence regarding property division matters, including appraisal reports or letters from listing agents estimating the value of the property.
In scenarios where each spouse asserts that the home is worth a vastly different amount, the courts may split the difference. Other times, it may be relatively clear that one spouse’s estimated fair market value is more realistic than the other’s.
Either the spouses preparing for divorce or the judge hearing the case may ultimately decide what a house is worth. Setting a fair market value for high-value resources is an important step while preparing to negotiate property division matters or to present evidence for a litigated property division case in ways that result in a fair outcome.