posted 26th September 2023
Valuing the Family Home for a Divorce Settlement
The house is usually the largest asset in a settlement, so the figure attached to it matters more than any other. Getting it agreed is often straightforward. Where it is not, it can hold up everything else.
The usual approach
Three market appraisals from local estate agents, then take the average.
- Choose agents who actively sell in that particular area
- Tell them the valuation is for a divorce settlement rather than a sale
- Both parties should agree which three agents before any of them are approached
- Each agent needs to visit the property rather than value it from a postcode
Appraisals are usually free, which is why this is the default approach.
Why both parties should choose the agents together
An agent instructed by one party, told the property is about to go on the market, tends to produce a different figure from one told it is for a settlement.
Agreeing the three in advance removes the argument about whether a figure was influenced. It costs nothing and saves a great deal.
When the figures do not agree
Some variation is normal. A spread of a few per cent between three agents is not a problem, and the average is usually workable.
Where the gap is wider, or where one party does not accept the figures, the options are:
- Obtain further appraisals and widen the sample
- Instruct a RICS surveyor to produce a formal valuation, jointly instructed and paid for between you
- Agree to sell and divide the actual proceeds, which removes the question entirely
A formal RICS valuation costs money but carries more weight, and a jointly instructed one is difficult for either party to dispute afterwards.
Deduct what is owed
The valuation is not the figure that gets divided. What matters is the equity: the value less the outstanding mortgage, less the costs of sale if it is being sold.
Request a redemption figure from the lender rather than working from the last statement, since the two are rarely the same.
Valuations go out of date
Where a settlement takes months, a valuation obtained at the start may no longer be accurate by the time the order is submitted.
Worth revisiting if there has been a significant delay, particularly where the market has moved.
We work with both parties to agree the figures and then draw up the consent order ourselves. The first conversation is free and there is no obligation.
