High-value assets, such as a marital home and other real estate holdings, often become focal points during property division proceedings. Spouses may disagree about who keeps the property and even what the home is worth.
Securing an appraisal can help but doesn’t always resolve valuation disagreements. Why do disagreements persist after appraisals?
Appraisals involve subjective evaluations
Professional appraisers have to look at the sale prices of comparable properties in the community in recent weeks. They also conduct inspections of the property to determine its condition.
In theory, appraisers base their determinations on verifiable details about the market and the property. However, appraising properties requires a degree of professional discretion. Appraisers hired by homeowners or their real estate agents may take the client’s needs into account during the appraisal process.
If they know the client intends to sell the home or needs a mortgage that aligns with their offer, they may favor slightly higher values. If their client needs to buy out a spouse’s equity, that might influence them to set a slightly lower price.
Either spouse might dispute the accuracy of the appraisal. Sometimes, each spouse secures an appraisal from a different professional. If there is a significant difference in the fair market values established by two different appraisers, couples may need to split the difference.
If they cannot reach an agreement about what the property is worth, then litigation may be necessary. Both spouses may need to submit information about the property, including their appraisal reports, so that a judge can make the final determination regarding the value of the home.
Setting an appropriate value for real property is important for a fair property division outcome in a high-asset divorce. Spouses facing conflict regarding the value of their homes and other assets may need help preparing for the process ahead.
