Over the past few years, the housing market has seen what many may argue are unprecedented-at least changes that have not been seen before in recent memory. The value of a home may be an important issue when two people decide to divorce. The division of property can, at times, be a contentious issue. In a fairly volatile housing market, issues surrounding the value of property can be a complex issue. In some cases, a husband and wife may have more than one property--leading to more complex valuation issues.
In today's market, many people in California own a home (or homes) that may be underwater, which can affect the negotiations surrounding property division. In other situations, the mortgage may be low, meaning that determining the value of the equity in the home may have significant impact on how the home equity should be divided.
Generally, there are different methods for determining the value of a home. A formal appraisal is one method of determining the value of a home. Appraisals made by a licensed professional will come with a cost, which may deter some homeowners from seeking to have the home appraised. But a party to a divorce may be able to rely on the appraiser in court if home values are a contentious issue in dividing property.
Realtors are often will to prepare a comparative market analysis to arrive at a proposed fair market value for a home. Often a realtor will provide the analysis at little to no cost, but the idea is generally used in contemplation of selling the home. The CMA may, or may not, be as accurate as an appraisal for many purposes.
Some couples are able to agree on property valuation issues through personal research. In less contentious divorce proceedings, the issue may be resolved through negotiation.
Notably, the valuation of any property, whether the property is a home, vacation property, a business, or any of the other forms of assets is only one step in furthering a settlement on property division. Forensic accountants may need to be consulted in some valuation tasks. Issues may arise in determining the extent of assets owned by a husband or wife that should be considered as part of the community property of the marriage.
Source: The Huffington Post, "Three Ways To Value Your Home In A Divorce," Joseph E. Cordell, March 1, 2013