How to Value the Family Home and Other Real Estate
The family home can be one of the most complicated parts of a divorce because it has such significant emotional and financial aspects. The financial piece itself is complex because the home is the only financial asset that you also live in. And, how to value the home isn’t always immediately obvious to spouses.
Read on to learn more about how to value the family home and real estate in a Connecticut divorce.
To rule that a divorce is final, Connecticut courts need to divide the spouses’ property between them. “Property” is something that a person can own. There are two main types of property: “real property” and “personal property.” Real property is essentially what we think of as real estate. Therefore, the family home is a common type of real property.
Other real property that courts distribute in divorces and therefore needs to be valued include second homes, timeshares, farms, commercial property, and investment real estate.
In order to determine the value of real estate, the courts look to its “fair market value” is. The fair market value is the “price at which the property would change hands between a willing buyer and a willing seller, neither being under any compulsion to buy or to sell and both having reasonable knowledge of relevant facts.” Read: How is Property Valued in a Divorce?
Valuing Real Estate
A property owner is allowed to testify about the value of that real estate. More often than not, though, spoused bring in other professionals to help determine the home’s fair market value.
Often the spouses will have professional appraisers value the real estate. In many cases, spouses will agree to jointly hire one expert to do an appraisal. This is generally the most comprehensive and formal of the valuation methods.
Real Estate Agents & Brokers
Realtors can provide spouses with two different types of valuations: a Broker Price Opinion (“BPO”) or a Comparative Market Analysis (“CMA”). Both provide an estimated value, but the CMA estimates the value based on comparable properties that have sold recently.
City or towns use a property tax assessment to value your property and determine what your property taxes are going to be. Property tax assessments aren’t frequently updated and may not be a good indicator of the current fair market value in a divorce.
Zillow and other online price estimators aren’t generally a good indicator of the true value because they may not take into consideration the many details of the property.
The Comprehensive Connecticut Property Division Guide
How to divide property is one of the most important issues in divorces. And, it’s one of the most confusing. There are no set formulas or rules on how property will be divided. The good news is that creates tremendous flexibility for experienced divorce attorneys to craft an individualized approach. In order to prepare to make solid and informed decisions, you need to understand how property division works. Our Comprehensive Connecticut Property Division Guide tells you everything you need to know about property division in Connecticut. Read: Property Division: The Comprehensive Connecticut Guide
To start making a plan for your divorce, reach out. Our first step at Freed Marcroft, the Goals & Planning Conference, is designed to get to the heart of your problem and unveil your true goals. We analyze those goals, plus the facts of your case, and present you with recommendations and options to move forward.