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How to Value the Family Home and Other Real Estate

White square with a gold border and the words “How to value the family home” with the Freed Marcroft family law firm logo in the lower right corner.The family home can be one of the most complicated parts of a divorce because it has such significant emotional and financial aspects.  The financial piece itself is complex because the home is the only financial asset that you also live in.  And, how to value the home isn’t always immediately obvious to spouses.

Read on to learn more.

Real Property

To rule that a divorce is final, Connecticut courts need to divide the spouses’ property between them. “Property” is something that a person can own.  There are two main types of property: “real property” and “personal property.”  Real property is essentially what we think of as real estate.  Therefore, the family home is a common type of real property.

Other real property that courts distribute in divorces and therefore needs to be valued include second homes, timeshares, farms, commercial property, and investment real estate.

Read: What’s the Definition of Property in a Divorce?

Valuing Property

In order to determine the value of real estate, the courts look to its “fair market value” is. The fair market value is the “price at which the property would change hands between a willing buyer and a willing seller, neither being under any compulsion to buy or to sell and both having reasonable knowledge of relevant facts.”

Read: How is Property Valued in a Divorce?

Valuing Real Estate

A property owner is allowed to testify about the value of that real estate.  More often than not, though, spoused bring in other professionals to help determine the home’s fair market value.

Appraisers

Often the spouses will have professional appraisers value the real estate.  In many cases, spouses will agree to jointly hire one expert to do an appraisal.  This is generally the most comprehensive and formal of the valuation methods.

Real Estate Agents & Brokers

Realtors can provide spouses with two different types of valuations: a Broker Price Opinion (“BPO”) or a Comparative Market Analysis (“CMA”).  Both provide an estimated value, but the  CMA estimates the value based on comparable properties that have sold recently.

Other Methods

City or towns use a property tax assessment to value your property and determine what your property taxes are going to be.  Property tax assessments aren’t frequently updated and may not be a good indicator of the current fair market value in a divorce.

Zillow and other online price estimators aren’t generally a good indicator of the true value because they may not take into consideration the many details of the property.

Next Steps

To start making a plan for your divorce, reach out.  Our first step at Freed Marcroft, the Goals & Planning Conference, is designed to get to the heart of your problem and unveil your true goals.  We analyze those goals, plus the facts of your case, and present you with recommendations and options to move forward.

Schedule your Goals & Planning Conference today, or contact us either here or by phone at 860-560-8160.

Written by Meghan Freed