Valuing real estate
For many separating couples, the main asset to be divided after separation is the family home. It is important to work out the value of the family home and other real estate at an early stage. If you and your ex-partner can agree on the value of real estate this will help when you are negotiating about how property and finances are to be divided.
Video: How to value real estate
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This information will help you to understand:
- what real estate is
- what market value means
- how to find out the market value of real estate, and
- what to do if you and your ex-partner cannot agree on the value of real estate.
What is real estate?
Real estate can be land, houses, buildings or properties and are usually the most expensive assets to be divided after separation.
What does market value mean?
Market value means the value of real estate if it was listed for sale in the real estate market today.
How can I find out the market value of real estate?
The most common way to find out the market value of real estate is to arrange for a market appraisal by a real estate agent. Real estate market appraisals are free and it is helpful to obtain at least two or three appraisals. Each of the market appraisals are likely to give a slightly different value for the real estate. You can use the average value given to try and reach an agreement with your ex-partner about the market value of the real estate.
You can also look at sales history of what a similar house in the same suburb sold for recently on realestate.com.au. For example, if you live in a 3-bedroom, 2-bathroom house, you can look at what other houses in the same suburb with the same number of bedrooms and bathrooms have recently sold for.
What if my ex-partner and I cannot agree on the market value of real estate?
If you and your ex-partner cannot agree on the market value of your home or other real estate, you can agree to hire an expert to value it and provide a sworn valuation.
The expert is a person that is highly qualified valuing real estate. It is a good idea to use an expert who is accredited through the Australian Property Institute.
There are specific family law rules that experts need to follow. The expert will give their opinion in writing and will ‘swear’ that the valuation is independent and authentic. This is called a sworn valuation.
Who is responsible for paying for a sworn valuation?
It is common for people to share the costs of a sworn valuation. The fee for a sworn valuation will change from expert to expert. It is a good idea to make enquiries with a few different experts to find out their costs.
What are the benefits of getting a sworn valuation?
A sworn valuation will generally give you a more accurate value of the house than a market appraisal. This is because an expert will look for things such as square meterage, number of bathrooms and bedrooms and the structure of the house.
A sworn valuation will also usually give you a narrower range of value than a market appraisal. A sworn valuation can be used in court if you and your ex-partner are unable to agree on the value of the house.
Reviewed: 30 November 2020