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How to Value Your House and Split Equity in a Divorce

When determining how to divide your marital assets in a divorce, you will need to figure out what to do with your family home. If the house was purchased during the marriage together as a couple, it will be considered a marital asset, and therefore, subject to division during a divorce. As a home is not a liquid asset, it can be difficult to determine how to best divide it. After all, you cannot just split a house in half. Additionally, if you have children, the custodial parent may wish to keep the house to be able to continue to raise the children in their childhood home. So, how do you divide the equity of a house in a divorce?

How Is a House Divided in a Divorce?

When considering how to divide the equity of your house in a divorce, it is important to understand your options. There are many options, including putting the house up for sale, or offsetting the value of the home with other marital assets. 

Put the house up for sale

One of your options is to put the house up for sale. If someone buys the house, then you could divide the proceeds between you and your spouse. Remember you will need to pay off your mortgage, closing costs, moving costs, and your realtor as well.

Often, a judge will opt for this option, especially if one spouse wants to keep the house but cannot afford to do so on their own or cannot pay their ex-spouse a share of equity.

It is important to note that when the sale of the house is reserved, the spouse that decides to stay in the house until it is ready to be sold will be responsible for all the expenses associated with the upkeep of the house until then.

Offset other marital assets

In the event you do not want to sell the house and divide the proceeds from this sale, one party can keep the house in exchange for another asset. This asset’s value should be equivalent to the amount they would have received had the house been sold. For example, if one party decides to keep the house, the other could keep a retirement account.

How to Determine Equity

Hire a real estate agent to do a valuation of your home

One option is to hire a real estate agent to conduct a comparative market analysis of your home. This entails comparing the value of your home with three or more similar houses that are either for sale or have been recently sold.

The comparative market analysis will determine the price the house should be listed at for sale. That being said, a listed price will often get reduced after negotiations with potential buyers, so the actual value of the home will be what the price is after negotiations.

Hire a licensed appraiser to complete an analysis to determine the house’s value

An appraisal will cost you money up front and is different than a comparative market analysis. A licensed appraiser will not just compare your home to a couple others of similar value. Instead, an appraiser will consider multiple factors that might affect the value of your home, including but not limited to the following:

  • Current market trends
  • Recent sales of similar properties
  • Home’s amenities
  • Square footage of the home
  • Home’s floor plan

An appraisal is an unbiased professional opinion of the value of a home and is used whenever a mortgage is involved in the selling of that property. An appraisal will always carry more weight in court over a comparative market analysis.

Contact our office online or call us via (314) 441-7793 to schedule a consultation to discuss your divorce case.