Vacation homes and other real estate holdings are a big part in many high-asset divorces. Some of our Texas readers might not realize that dealing with these holdings can often add a complex element to the property division process. Being prepared for dealing with that can help to make the property division process a little easier and a little less stressful.
Do we need to have the real estate holdings appraised?
Having a property appraised is a vital part of dividing real estate holdings in a high-asset divorce. While many properties can be appraised based on the comparable properties, or comps, in the area, there are some properties that will pose unique challenges. These properties include those that have unique features, such as a greenhouse or a deep water dock. Even some multi-car garages can affect the value of the property. When those unique features are part of a property, it might prove useful to get more than one appraisal on the property.
Can I just call my Realtor?
Generally, an impartial third party is the best person to appraise real estate holdings. You should choose a person who is familiar with the local market and is dispassionate. The person should be able to accurately assess how various additions and changes to the property affect the fair market value.
Do I need to know more than just the fair market value?
When it comes to property division, the fair market value and the balance due on the mortgage must be considered. This lets you know the equity that is in the property. From there, you have to consider how capital gains tax will affect you if the property sells for more than you paid.
Dividing real property isn't as simple as just selling the properties and splitting the money. A variety of other factors have to be considered to ensure that you are getting a solid settlement.
Source: Forbes, "Seven Key Points Divorcing Women Need To Know About Real Estate And Real Estate Appraisals" Jeff Landers, accessed Mar. 04, 2015