As the saying goes, one’s home is one’s castle. During a divorce, one’s home is also often the most valuable piece of property that is up for division. But, in what circumstance are real estate experts, like an appraiser, necessary in the divorce process?
The Massachusetts Probate and Family Courts use a process called equitable distribution to divide marital property in general. Here, the term “equitable” means “fair,” and not necessarily equal: the court will determine how to best divide marital property in the fairest manner in each particular case.
In the case of real estate, the value of the property can become an issue. When this happens, most often, the court will use the “comparable sales method” of analysis to determine the value of real estate. Under this method, the value is set as “the highest price which a hypothetical willing buyer would pay to a hypothetical willing seller in an assumed free and open market.”[1] Other valuation methods exist and may be used—for example, in the case of rental or investment property, the court might consider rental value under a method called “income capitalization.”
If the property value is contested during divorce, it may be necessary to employ the services of a real estate expert. Professional appraisers and real estate brokers are two examples of such experts. What will the real estate expert’s role be? The expert will likely:
- Examine the marital property for appraisal, including the physical characteristics of the property and its location;
- Investigate and prepare data for similar properties recently sold, including the location and terms of the sale and the characteristics of those properties;
- Contrast those data from the marital property where necessary, such as to account for significant differences in location, conditions, sale terms, economic conditions, and other outliers;
- Determine the value of the marital property according to the expert; and
- Testify as to the value of the marital property during the divorce proceedings.
If the value of the property is determined and there is equity, the court may order the sale of the property and divide the proceeds equitably or order conveyance of the title to one or both of the spouses and make provisions for payment of liabilities.
When choosing a real estate expert, it is important to keep in mind the following considerations:
- Rely on a reputable professional who has all requisite licenses and certifications. An expert witness may be impeached during the proceedings based on his or her qualifications.
- Be sure your attorney understands the appropriate ethical and professional rules applicable to valuation professionals and practice.
- Be aware that marital property valuation and sales might pose special issues if there are minor children living in the home.
- Ask the expert to go over various scenarios with you as to whether equity will be found in the home.
- Discuss with your expert and your attorney the impact of any outstanding liabilities associated with the marital property.
If you would like more information about property division on other issues in family law, don’t hesitate to call our offices. Schedule a free consultation, and one of our competent family law attorneys will respond to you at the earliest possible time.
[1] Tigar v. Mystic River Bridge Authority, 329 Mass. 514 (1952).