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Commonly when two parties separate or divorce, the family home (also referred to as the matrimonial home) is typically the most valuable asset. As with most separations, one party moves out of the matrimonial home following the breakdown of the relationship, leaving questions of how much the house is worth? and which party owns it?
Assets such as real property, which are generally the most fought over, require an updated valuation so the Court can ascertain the current value of the house and the relevant property pool. Importantly, parties must understand that the valuation of the matrimonial home is separate from:
Real estate appraisals, whilst often quick, easy, and commonly free, a real estate appraisal is not an exact figure of the value of the property, but rather a benchmark figure based on information such as similar listings, location, and previous sale history.
These kinds of appraisals are the real estate agent’s opinion of what the property could be sold for, not what the actual property is worth. Although one might think an optimistic appraisal is beneficial, these instruments often inflate the property pool of the parties which causes you to receive less in a financial split.
If you built the current house you are living in, the value of the property is not what it cost to build it, regardless of when you built it. The value of the property is generally the “fair market value” a seller is likely to pay for the home at sale.
This is similar to bank valuations, which are commonly used for mortgage applications and collateral for loans. In these situations, the bank wants to know how much they could recover in a hurry if you default on your mortgage or loan repayments, not the actual valuation of the property. As expected, these valuations are often out of date and not the price a willing buyer would pay.
A family law property valuation calculates the fair market value of the property as of that date, will require a preparation from a trained property valuer, and analyses the critical issues affecting the property’s value, including renovations and improvements. This information will then form part of a report with detailed findings, photos, and other evidentiary material.
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