Family Law Property Valuations
- February 25, 2019
- Jennifer Hetherington
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How do we know how much the family home is worth?
If you separate or are getting a divorce, your family home might be your most valuable asset.
Frequently, we see separating couples arguing over the value of the home.
If you remain living in the family home, you may be aware of the major defects in the house, and the work needed to fix it.
If your ex is no longer living in the family home, they may remember it being in a better condition than it is in now. You might think the family home is worth more than what a home buyer thinks it is worth if you carried out renovations.
What is a family law property valuation?
Separating or divorcing couples sometimes misunderstand what a family law property valuation actually is.
Common misunderstandings include that a family law property valuation is the same as:
- a real estate appraisal;
- the price you paid to build the family home; or
- a valuation for bank purposes.
What about real estate appraisals?
Real estate appraisals are cheap (often free), quick, and easy to obtain from a real estate agent.
A real estate agent will consider the sale price of similar homes in your area and give you their opinion on what the family home could be sold for.
A real estate agent may give you an optimistic value to encourage you to list with them. And, worse, your ex could always find a real estate agent that will tell them the value of the family home that they want to hear!
We built our house so won't the family law property valuation just be what we paid for the build?
If you and your ex built your own home, then you or your ex might consider that the family home is worth the price that you paid to build it, even just a few years ago.
A family law valuation won’t look at how much it cost to build the family home; instead, it looks at the family home’s “fair market value”: what a willing buyer would pay for the family home from a willing seller without either being pressured to buy or sell.
The difference between the cost to build the family home and its fair market value can be great.
Can't we just use our last bank valuation?
Similarly, a valuation for bank purposes works out the value of your family home differently than a family law valuation.
A bank wants to know the value of your family home at the point of giving you a loan and how much it could recover of that value if it had to sell your family home in a hurry.
Unsurprisingly, valuations for bank purposes can be out-of-date and value the family home at a price less than a willing buyer would think it is worth.
How is a family law property valuation worked out?
A family law property valuation for a house:
- works out the fair market value of the family home;
- is prepared by a trained property valuer;
- looks at the major issues affecting the family home’s value;
- is a detailed report containing photos and descriptions of the family home, with comparisons to other houses in the area; and
- is evidence of the family home’s value.
It’s really important to know that your house will be valued at the date that your property settlement is being finalised. Beware delaying your property settlement. If you want to keep the house and prices are rising, it can be worth working hard to get a settlement with your ex sooner rather than later.
We can arrange a family law valuation through a reputable registered valuer. We can also help you negotiate with your ex to arrange a family law valuation, so you can have the best shot at resolving the difference of opinion with your ex about what your family home is really worth.