Divorce and the Family Home: Why an Independent Appraisal Can Help Both Sides Move Forward
Divorce can make even a relatively straightforward home sale complicated.
There may be questions about who has the authority to sell, who must sign the contract, how proceeds will be divided, whether an old marital settlement agreement affects the property, and when the home can actually be placed on the market.
But before the property is listed, there is another question that can quickly become just as contentious:
What is the home actually worth?
When two spouses are already negotiating the financial details of a divorce, agreeing on a listing price can become one more source of conflict. One spouse may believe the property is worth significantly more than the other. One may want a quick sale, while the other wants to test the market at a higher price.
That is where an independent real estate appraisal can help.
Divorce Can Complicate the Sale Before the Listing Even Begins
A recent Florida Realtors® article, When Divorce Complicates a Home Sale by Amy Connolly, highlights some of the legal complications that can arise when real estate and divorce intersect.
The article explains that a pending or completed divorce may affect who must sign real estate documents, whether the transaction can move forward, and how sale proceeds are ultimately handled. It also notes that old marital settlement agreements, deeds, homestead issues, and the timing of a divorce can create problems years later.
The takeaway for real estate professionals is simple: when divorce is involved, attorneys and title professionals should be brought into the process early.
The same forward-thinking approach can be valuable when determining the property’s value.
Before Arguing About the Listing Price, Get an Independent Opinion
Imagine one spouse believes the house should be listed for $950,000 while the other thinks $825,000 is more realistic.
Who is right?
The listing agent may provide a comparative market analysis, but in a divorce situation, either spouse may worry that the agent is siding with the other person, trying to obtain the listing, or recommending a price designed primarily to generate a fast sale.
An appraisal provides another option.
A qualified independent appraiser acts as a neutral third party whose assignment is to develop an impartial opinion of the property’s market value based on the property itself and relevant market data.
The appraiser is not representing the husband.
The appraiser is not representing the wife.
The appraiser is not trying to win the listing.
The objective is simply to answer one important question:
What does the market evidence indicate the property is worth?
An Appraisal Can Help Establish a Reasonable Listing Strategy
An appraisal does not dictate the exact price at which a property must be listed.
Market value and listing price are related, but they are not necessarily identical.
However, having a credible opinion of market value can give both spouses a common starting point for discussions with their attorneys and real estate professionals.
For example, if an appraisal indicates a market value of approximately $875,000, the parties may decide to list somewhat above that amount depending on current inventory, competition, marketing strategy, and their desired timeframe.
What the appraisal can help prevent is a pricing discussion based entirely on emotion.
One spouse may remember what a neighbor’s home sold for two years ago. Another may focus on what was spent remodeling the kitchen. Someone else may have found an online estimate that appears to support their position.
None of those things necessarily establishes today’s market value.
An appraisal analyzes relevant sales, market conditions, property characteristics, condition, location, improvements, and other factors affecting value.
That gives everyone something far more useful to discuss than, “I think it’s worth more.”
A Neutral Appraiser Can Reduce One Source of Conflict
Divorce already involves enough disagreement.
The value of the house does not need to become another battle if both parties can agree ahead of time to rely on an independent professional.
In some situations, the spouses or their attorneys may jointly select an appraiser and agree to use the appraisal as a starting point for determining a listing strategy.
That can be especially helpful when neither spouse wants the other person controlling the valuation process.
Instead of:
His number vs. her number
it becomes:
What does the market data show?
That distinction can make negotiations considerably more productive.
The Appraisal May Be Useful Even If the Property Is Not Sold
Not every divorce ends with the family home going on the market.
Sometimes one spouse wants to remain in the property and buy out the other’s interest. In other cases, attorneys may need a value for mediation, settlement negotiations, equitable distribution, or litigation.
An appraisal can therefore serve a broader purpose than simply helping establish a listing price.
Depending on the circumstances, the appraisal may help the parties evaluate:
- A potential sale of the property
- A proposed buyout between spouses
- Settlement negotiations
- Mediation
- Equitable distribution issues
- The value of other real estate owned by the couple
- Retrospective value when a prior date of value is required
The appropriate effective date and intended use of the appraisal should always be discussed with the attorneys involved.
Build the Right Team Early
The Florida Realtors® article makes an important point: real estate professionals should recognize potential divorce-related legal issues and involve attorneys and title professionals rather than attempting to interpret divorce documents themselves.
An appraiser has a similarly defined role.
The attorney handles the legal issues.
The title professional handles title and closing issues.
The real estate professional handles the sale and marketing.
The appraiser provides an independent opinion of value.
When those professionals are involved early, potential problems can often be identified before the property is under contract and everyone is racing toward a closing deadline.
Getting the Value Question Answered Early Can Make the Next Step Easier
If a home will likely be sold as part of a divorce, there is little benefit in waiting until the spouses are already arguing over the listing price.
Consider obtaining an independent appraisal first.
It can provide both parties, their attorneys, and their real estate professionals with a credible starting point for discussing value and developing a realistic listing strategy.
Divorce may already be complicated enough.
Determining what the house is worth shouldn’t have to be.
At Empire Appraisal Group, we provide independent residential real estate appraisals for divorce, mediation, property settlements, buyouts, litigation, and pre-listing purposes.
For what it’s worth, sometimes the easiest way for two sides to agree on a number is to have neither side choose the number.
Empire Appraisal Group
📞 561-441-9298