Many people preparing for divorce try to negotiate settlements. Instead of litigating in family court, they attempt to work cooperatively with one another. Doing so can be much faster and can also help control the total costs generated by the divorce process. Unfortunately, it can be very difficult to negotiate effectively when spouses may not see eye-to-eye on many important issues.
Frequently, people disagree about how to split their property. They may both want to retain the same assets, or neither may want to take personal responsibility for certain marital debts. Other times, they may disagree about what assets are worth, which can have a major impact on the outcome of the overall property division process.
The more valuable the asset is, the more likely the spouses are to clash over their differing opinions of its fair market value. When spouses disagree about what their marital home is worth, their differences in opinion could amount to tens of thousands of dollars.
How can spouses settle disputes about the value of real property?
Outside review may be necessary
The value of a home can be challenging for people to estimate. Frequently, homeowners reference what they initially paid for the property. However, real estate values fluctuate significantly and tend to slowly appreciate over time. The house could be worth far more than it was at the time of purchase by the point that the spouses living there divorce.
The most efficient and likely most accurate means of estimating what the property is worth might be to call in an appraiser. While real estate agents can help establish an estimated value, they may inflate the value somewhat given their profit incentive to maximize home values and take on new clients. Appraisers tend to set values more based in reality rather than wishful thinking.
Spouses can agree to respect the value that the appraiser they hire sets for the property. Other times, they may disagree about which appraiser to hire or may question the accuracy of the appraiser’s final report. In those circumstances, the best solution may be to have two separate appraisals done.
While that does increase the secondary cost of the divorce, each spouse can feel confident about their ability to fairly share in the home’s value. When there are two professional appraisals with significantly different values, the spouses may agree to split the difference for the sake of fairness.
Once spouses have determined what their home is worth, they can make arrangements for dividing equity or offsetting the value of equity through the allocation of other assets and shared marital debts. Property division issues require careful consideration to ensure a fair divorce outcome.