how much is my hut worth?

{4 minutes to read} In my previous article “How Much is My Picasso Worth?” I talked about the challenges people face when trying to put a value on their art holdings.

But what happens when a divorcing couple owns a home, an apartment, or a house, and wants to find out the real value of their home?

Much like art, the real value is the price that the home will bring once it is sold. Unlike equities traded on the stock market, where you can sell public stock at any time and know how much you will be getting for it, real estate and art do not have a constant barometer giving us their value at any given moment.

In cases where one spouse wants to buy the other spouse out of their share of the marital home, the value of the home needs to be assessed. There are several ways that one may go about that.

1. Comps (comparable sales): are calculated looking at what similar apartments in the same building have sold for, or houses in the same area and the prices at which they are listed for sale. While this is definitely the way to start gathering information, no two homes are alike — even if they have the same floor plan, other factors like the condition of the home, the exposure, and light, the type of flooring, all come into play.

Some couples may agree to do this just to get a sense of what their home is worth and come up with an agreed-upon value, but they need to understand that it is at best a “guesstimate” and they cannot at a later date come back and contest what they agreed to.

2. Real estate brokers can look at your home and give you an “oral” estimate of what they think your home will sell for. They will share with you what other similar homes have sold for, market trends, and whatever information they have to support their valuation, such as the condition of your home, if it’s been renovated, if the appliances are up to date, etc.

Most brokers will be up-front and give you a fair estimate, while others may give you a higher value to encourage you to list your home for sale with them. But in the end, no one knows what a buyer may offer.

3. Real estate appraisers are certified and have no “skin” in the game. Their job is to tell you what they think is a fair value of your home. They will also use comps and market trends to calculate their estimate. They will write up an appraisal with all the pertinent information to support their findings, and they are paid for their appraisal.

As with art works, finding the price for your home without selling it is not an exact science. As the economy fluctuates, real estate values will do the same. You may agree to buy out your spouse for a certain amount based on an estimate given to you today, but in a few years from now when you sell your home, the price may be quite different than at the time of the buyout.

Also as with art, one person may be more sentimentally attached to a home than the other person and maybe more accommodating just to keep the home.

If you and your partner or spouse are planning a buyout, or need to proceed with an equitable sharing of your real estate assets, I would be happy to help you through the process. Feel free to give me a call.

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Jennifer Safian

jennifer safian. divorce and family mediator
divorce and family mediation
upper east side of manhattan (nyc)
new york, ny
(917) 881 5206
jpsafian@gmail.com