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Do You Need a Property Appraisal During Divorce?

East Coast Appraisal Service • Oct 13, 2022

Divorce can quickly drain you emotionally and financially. Things can get even messier and more complicated if you and your spouse own property together. Who gets the house? How will the mortgage get paid? What will happen to the equity? Such are some hard-to-answer questions that you may find yourself asking during this difficult time.

Read on to understand how you may divide properties during a divorce and if you will need a property appraisal.

Understand How You May Divide Properties During a Divorce

You have two options on how to divide your property during a divorce: either sell the property and share the proceeds, or have one person "buy out" the other person's interest. The ideal option depends on your unique situation.

For example, if you own a home together and have children, the best option is to let the custodial parent keep the house. This way, the children can maintain some stability during such a tough time.

In the same way, if the property has sentimental meaning or is worth a lot of money, you may not want to sell it.

On the other hand, you may decide to sell the property and split the funds if you can't afford to keep the property due to financial constraints. Also, if you can't agree on how to split the property, selling it may be the best way to avoid bitter arguments and extra stress.

How Does Appraisal Help?

Whichever method of property division you choose, you'll need to know the property's value and ensure a fair division. Here is what to expect during property appraisal.
A property appraiser will come to your home to inspect and assess it. The appraiser checks the condition of your home, recent sales of similar properties in your neighborhood, the size of your lot, any improvements you have made, and other factors.

The appraiser also considers the current market conditions in your area. After the appraiser completes the assessment, the specialist will provide a report that includes an estimate of your property's value and a list of any factors that may have influenced the value.

You can use this report to negotiate a fair settlement with your spouse. If you cannot agree on a settlement, you can present the report to the court and let the judge decide how to divide the property.

In some cases, both parties may agree to hire separate appraisers to assess the property's value. The parties can then consult a mediator to help them reach an agreement based on the two appraisals.

Appraisal and Post-Divorce Tax Planning

If you and your spouse decide to sell the property, you may need to pay taxes on any gains from the sale. However, whether capital gain tax affects your sale depends on how you intend to treat the house and whether the property is your principal residence.

For instance, if you decide to sell the property together and split the money, you have to pay the capital gain tax. But if you lived in the house together as your principal residence, you may be eligible for some deductions.

An appraisal comes in handy during post-divorce tax planning. By knowing the property's value, you can determine how much money you will have to pay in taxes. You can also use the appraisal report to negotiate with your spouse and decide who will pay the taxes.

Now that you understand how appraisal works and how it can help during a divorce, you can move forward with the process. But work with a reputable and reliable property appraiser to get an accurate report.

East Coast Appraisal Service has a team of certified and licensed experts to offer you an accurate property appraisal. We will help you understand the value of your property so that you can make informed decisions during your divorce. Contact us today to schedule a consultation.

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