Divorce Appraisals In
Northern Colorado

Nearly 70% of all divorces involve real estate, and the family home is one of the most heated points of contention. Typically, the home is the largest marital asset and also comes with a strong emotional attachment for the parties involved. Finalizing a divorce involves many decisions, including “Who gets the house”? There are generally two options regarding the house – it can be sold and the proceeds divided, or one party can “buy out” the other. Whether you have decided to sell the home and move on or refinance to pay out the equity to your former spouse, you need to know its value — and that is where the appraisal comes in!

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For most people, their primary concern when they order an appraisal is the value of the home and what impact it will have on their case. They usually aren’t very concerned about how the appraisal report is done, as long as they can use it in court. And while most of us are accustomed to receiving residential mortgage reports on the Uniform Residential Appraisal Report (URAR) 1004 form, it is not intended to be used for valuation matters other than mortgage finance. This simple mistake could cost you time and money, as the court may choose not to accept the appraisal on this form.

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The divorce appraisal sometimes has a retrospective date of value, meaning the appraised value is based upon a date in the past (such as the filing date, marriage date, separation date, or purchase date) rather than today’s date. Often both the retrospective value and current market value are needed for divorce.

The appraiser in a divorce situation may be asked to be an expert witness if the case goes to court, so it may be necessary to include additional research and data within the appraisal report to ensure that value and adjustments are clearly explained and supported.

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The divorce appraisal is the same as a mortgage appraisal in terms of confidentiality. No information regarding the appraisal or appraised value is shared with anyone other than the client who ordered the appraisal or their attorney unless otherwise required by law. As with every other aspect of the divorce proceedings, make sure to follow your attorney’s advice and order the appraisal when they recommend doing so. If you wait until the last minute, you may be charged rush fees, and you want to avoid as many unnecessary fees as possible!

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Taxes and financial planning

Home appraisals also play a key role in your ability to plan for your post-divorce financial future. Many couples are not aware of the full impact of divorce on their tax situation. 

If you sell your home for $500,000, for example, you do not necessarily get to split that total 50/50 with your spouse. In many cases, you will have to pay capital gains taxes first. The sale will count as income which must be accounted for and may change which tax bracket you fall in. 

To make matters worse, getting a divorce can trigger a tax audit. As such, it is vital that you work with your lawyer and a financial advisor to:

• Make sure your finances are in order

• Protect yourself as much as possible from heavy taxes, fees, and other financial losses

• Create a realistic financial plan for your post-divorce life

Even the best professionals cannot help you do this in any useful way without a clear understanding of what your home is worth.

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Why appraisals are better than the alternatives 

Well-meaning friends or family may suggest that you use a comparative market analysis (CMA) instead of hiring a home appraiser. A CMA is a tool used by real estate agents to estimate the value of a home, usually for selling purposes not legal purposes. A CMA can be cheaper than an appraisal. CMAs are not equivalent to appraisals in quality, however.

Regardless of who performs them, CMAs do not qualify as official legal opinions of value for the purposes of divorce proceedings.  Determine the real value of your home. This figure allows everyone involved to ensure that both parties get their fair share of marital assets no matter what you do with the house. 

If you need an appraisal you must have your home appraised by a qualified appraiser as part of the divorce process.  

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Choosing an appraiser

In a best case scenario, both spouses will agree on one home appraiser. If you cannot agree on an appraiser, the court may choose one for you. Alternatively, you and your spouse may each hire independent appraisers. More than likely they will not reach the same exact valuation for your house, the court may average the two figures and use the resulting number when making determinations

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