Property division is often one of the most contentious elements of a divorce. Even if spouses agree that the marriage is unhealthy and requires dissolution, they may disagree about how to share the resources and financial obligations they accumulated during the marriage.
Frequently, major assets require a lot of attention during property division negotiations. Those who speed through the process may do themselves a real disservice. They may fall victim to a common mistake related to what might be their most valuable marital asset. As such, those who purchased homes during their marriages need to be very cautious as they prepare for property division negotiations or litigation.
Undervaluation leads to unfair outcomes
It is surprisingly common for those without any experience in the professional real estate world to assume they know what their home is worth. They might refer to the assessed value established for tax purposes. They might also reference the purchase price for the home when they acquired it.
The problem is that both of those figures could very well be tens of thousands of dollars lower than the current value of the home. Real estate prices fluctuate, and assessors are often slow to react to market changes. Beyond that, prices can shift dramatically over the many years a married couple lived at the home. The more time that has passed since the purchase of the property, the greater the likelihood that the amount paid for it no longer reflects the price it could command on the current market. Investments and improvements in the property can also mean that owners have an unrealistically low idea of its worth.
Homeowners who set an unrealistically low price for their homes during divorce proceedings deprive themselves of their fair share of equity during the property division process. Securing an appraisal is often a smart idea for those preparing for divorce. Other times, they might consult with a local real estate agent to obtain an estimate of what they could list the property for on the current market.
In cases where each spouse has their own idea about property valuation, it may be necessary to negotiate and find a way to meet in the middle. The failure to set a reasonable price for valuable marital assets can lead to unfair property division terms. Seeking legal guidance proactively can help individuals to avoid related challenges whenever possible.
