Something that might seem easy but can prove to be quite daunting in some cases is valuing a couple’s marital residence during a divorce in South Carolina. Many people might assume that they can simply agree on a figure and go on about their business. However, that’s seldom the case, as the value often affects who gets other assets, and one spouse usually has motivation to either inflate or deflate the figure. When disagreements over value arise, research must be done to determine a realistic value, so the marital estate (assets and debts) can be divided equitably.
The recent economic conditions have resulted in stagnant or even declining home values. Years ago, lawyers understood that outdated home value estimates or appraisals were not good because the value of the home had likely increased during that time. Today, lawyers fear that the value of the house may have decreased since an appraisal conducted only a few years before. It is extremely important to determine the true fair market value so that questions about who gets the house and whether there are enough other assets to offset the value of the house can be tackled.
There are basically three different ways to value a house:
- Conduct your own research on the Internet. You have the ability to do some online research of your own to try to find comparable listings and arrive at a reasonable figure. However, while this is (by far) the cheapest method, it is (by far) the most imprecise and risky. Reviewing the local MLS listings can give you an idea of what similar homes are selling for, which might be enough to suffice in certain divorces where the parties are not especially acrimonious or when the house is not seriously in dispute. However, in the overwhelming majority of cases, this likely will not work, as the number is high speculative and will most likely not hold up in court.
- Conduct a comparative market analysis. This involves an examination and comparison of sale prices of neighboring homes. Realtors will usually conduct a CMA at little to no cost, and they can quickly give you a possible fair market value for your home. While this is much less expensive than having a full appraisal done, it’s important to understand that a CMA is also far less accurate and does not take into account the specific condition of your particular home.
- Get a full appraisal done by a licensed, certified appraiser. Depending on your exact location, an appraisal can cost anywhere from a few hundred (most typical) to several thousand (rare) dollars. Though this can be daunting given the price of the divorce, it is almost always well worth it in case where the value of the house is truly unknown. For example, if your spouse wants the house and the value used is too low, you could be giving away equity in the home to which you are entitled. Though it’s a more expensive method of valuing a house, it’s also (by far) the most reliable and usually the best way to proceed.
Source: “Three Ways To Value Your Home In A Divorce,” by Joseph Cordell, published at HuffingtonPost.com.