Pennsylvania couples who are preparing to divorce often focus on the financial implications of the change in their family status. This is a valid and understandable concern, as the decisions made during the property division portion of a divorce proceeding will determine the financial stability of both parties in the months and years following the end of the marriage. One factor that comes into play in many divorces involves use of a professional real estate appraisal.
A property appraisal is an unbiased estimation of the value of a piece of real estate. It is conducted by a licensed and trained estimator who will examine sales data from nearby comparable properties to determine the sales price that a couple could expect to receive if they sold their own property at that time. The value of a home can shift from month-to-month, as other homes in the area are sold and the overall market shifts.
In deciding whether to keep or sell the family home, it is important to understand that any equity that exists cannot be considered as available funds to be divided. When a home is sold, capital gains taxes at both federal and state levels may factor into play. Any existing mortgages will need to be satisfied, and the costs of selling the home will come from the proceeds. After all is said and done, whatever remains will be divided between the parties as negotiated.
Understanding how an appraisal can help inform both spouses is an important aspect of negotiating property division during a Pennsylvania divorce. Having a professional estimation of the value of real property can help parties determine the best manner of distributing real estate assets. When moving through a lengthy divorce process, however, spouses must keep in mind that an appraisal of real property should only be considered accurate in the months immediately following the report; if the divorce is drawn out for many months beyond that, a new appraisal may be necessary.
Source: Forbes, "Seven Key Points Divorcing Women Need To Know About Real Estate And Real Estate Appraisals," Jeff Landers, Jan. 22, 2013