Married couples often deposit their checks into the same account and purchase their most valuable resources together. For many families in California, the home where they live together is the most valuable resource that spouses share.
When discussions of divorce start, people often worry about what the end of their marriage would mean for their interest in the home. Most people understand that California has community property rules, but they may struggle to understand what those rules will mean for sizable assets, like the home where they live together. Generally, only one spouse can continue living in the home, but both have a right to a fair portion of its equity.
The process of establishing each spouse’s share of equity requires that they first determine what the home is worth. What happens when spouses vehemently disagree about the current fair market value of their shared home?
They will need professional support
Those who currently disagree about the value of shared property often need professional input to reach a fair solution. When it comes to real property, either real estate agents or appraisers are the professionals best able to assist. These professionals have training and state licensing that help them realistically evaluate a property’s condition and current market circumstances to determine what the home is worth.
Even then, the final figure that they set will be somewhat subjective. Their perception of the market and the property will influence what they think it is worth. The subtle cues given by a client can also affect what an agent or appraiser says a property is worth. Therefore, it is possible for spouses to bring in an appraiser and still find themselves disagreeing about the property’s value.
Occasionally, when what someone expects is thousands of dollars different from what the appraiser says the home is worth, a second appraisal might be beneficial. Spouses can then compromise by setting the fair market value in between the two appraised values. Although divorcing homeowners do need to pay for each appraisal, having a realistic fair market value is of the utmost importance for an appropriate outcome during divorce. Therefore, the costs associated with obtaining a second appraisal may be more than worthwhile given the potentially substantial discrepancy between someone’s expectations and the appraised value set after a single appraisal.
Having legal and financial guidance when setting the value for the most significant resources in one’s pool of marital property may help those preparing for divorce negotiations to set realistic expectations and to craft their asset division strategies accordingly.