If you separate, have a house together and file for divorce, the joint house will also have to be divided. Regardless of whether one of you wants to continue living in the house, a good valuation of the owner-occupied house is required in the divorce. In this article you can read why and how a valuation report of the joint home can be used.
Appraisal home in case of divorce
If one of you wants to continue living in the house and can also continue to pay the monthly mortgage costs on your own, it is possible to put the mortgage in one name at the time of the divorce. The departing partner will then be able to be dismissed jointly and severally liable for the mortgage, so that they are no longer linked to the mortgage of the old home and can buy a new home and finance it with a new mortgage, if desired. This requires a valuation of the house.
Consequences of valuation in divorce
If there is surplus value, the partner who remains in the home will have to buy out the departing partner. The amount will be at least half of the equity of the house. In the event of the lower value of the home, the partner who leaves will have to repay half of the residual debt or lower value. The valuation of the joint home is therefore extremely important for the consequences of the housing division. Not only the divorce agreement, but also a valuation report can come in handy when applying for a new mortgage.
If you both want to leave the joint home and do not want to stay behind in the house, a valuation of the home at the time of the divorce can be used to determine the price when putting the house up for sale and to settle the division financially round.
How does the valuation of a house work in the event of a divorce?
Are you going to work it out together or is an independent expert needed to determine the value? The valuation of the property can be carried out by a recognized appraiser. That’s the most fair. Of course you can also agree on a reasonable price in mutual consultation. It is important that you both think it is reasonable and that you completely agree on the price of the house. Do you expect a conflict, discussions or disagreements about this in the future? In that case, it is advisable to hire two independent appraisers and have two different appraisals carried out. This may sound exaggerated, but the value of your home is a serious subject and of great value. You can then take the average of the two valuations and agree in advance that the outcome is binding for both of you. The follow-up question is then which appraiser is allowed to carry out the valuation on your behalf and with which assignment the person can get started.
When you agree on a price for the house in good consultation, it is useful to have a clear definition of this. Please note that the value of the sale is not based on the value in rented condition, WOZ value or foreclosure value, but on the market value. To arrive at a good market value together, you can, for example, look at comparable homes in your area. The WOZ value is used for municipal taxes. This value can be used in a possible alimony calculation.
After the value has been determined by an appraiser or by both of you in consultation, the next step will be to reach agreement on the division and you will have to agree on a buyout amount. If you can use help, guidance and independent support with this, you can contact Bliss without obligation. Our advisors are happy to help you both on your way to a new future by making good agreements. Make an appointment for a free introductory meeting.
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