Buying Out A House In Divorce. Update Comps!

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This will be short, for once.  Divorce often involves one spouse buying out another from the marital residence.  Best advice was, and still is, home values are such that paying for an appraisal can be useful.  But of course, then there are all of the computer programs like Zillow that try to do it for you.

If your house is somewhat standard for your neighborhood, e.g., you live in a subdivision, chances are reasonable that you will find a comparable home that sold recently.  Until 18 months ago, the word “recently” would have meant in the prior 12-18 months.  Today, “recently” may mean in the past 12-18 DAYS.

The market appears to be every bit as hot as it was circa 1986, where people camped in yards waiting for the house to open to the market.  We just took on a matter where husband and wife had secured two appraisals in July 2020.  Their house is one of 40 or so in suburban West Chester.  The appraisers came in at $390,000 and $415,000.  When the client came to see us, we just ran what I will call a “Zillow Test” on the house and it came back at $520,000.

Zillow is an algorithm and that can be problematic.  So, we fished around to see if anything had sold in the neighborhood since July.  Indeed, two houses had sold within a quarter mile in the past 90 days.  One at $490,000, the second for $520,000.  All three homes were built circa 1964. All three with 2200-2400 square feet on lots of roughly a half acre give or take.

So look around if you are valuing your shack for sale to the spouse.  Because the market is so hot, a home near you may have sold before the sign got in the ground or you had a chance to see it.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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