A property can be one of the most important and indeed only asset from a relationship. Both parties have usually spent a great deal of time and effort making a home together. When there is a separation, it is therefore essential that the parties understand what is available to them. In some cases, this can be a really easy process but in others might require some thought and assistance.

How do we value a property?

There are different ways this can be ascertained:

1. The parties may be able to agree what they think the house/property is worth.
2. The parties may get 3 market appraisals done by local agents so that an average can be agreed
3. A formal valuation by an expert instructed jointly may be required. This is usually done on a formal basis with instructions from both parties. This will incur a fee.

Which is the best way to get a valuation?

This will often depend on the property itself. An unusual and unique property for example may be difficult to value without expert assistance. Also, if the property is agricultural or is used for some commercial purposes this may also require an expert valuation.

In the vast majority of cases the property is fairly standard, and parties are able to agree what they think it is worth or can agree a value based on market valuations.

Once we have a valuation is that it?

Once the valuation is agreed/confirmed then the next step is to work out how much ‘equity’ the property has. This is the amount of actual money the parties would get if the property were to be sold. This is usually calculated as follows:

Valuation less any mortgage (if any), other charges (if any) and sale costs = Equity

The equity is the key figure as this is the actual money in the property which is the ‘asset’ of the parties.

For example, Steve and Amanda own a property worth £550,000 but there is a £150,000 mortgage remaining, there is only £400,000 equity in the property. In a hypothetical sale, estate agents fee would be 1% (£5,500) and solicitors fees £1,500, leaving £393,000 as the actual ‘equity’ available for factoring into the finances of the couple.

Does getting a valuation mean the property will definitely be sold?

No, getting a valuation is part of the process of working out what assets there are so that there can then be discussions about what should happen to all of the assets as a whole. Getting a valuation and working out the equity is needed so there is a clear picture on what money there in in the property.

The future of the property will depend on how things can be worked out overall as part of the settlement. It also means there is a clear information so that the parties can look at what options they have, for example whether one party may want to remain in the property and can afford to do so.

How we can help

If you are going through a separation and need advice on the divorce itself or the financial separation, then our highly regarded Family law team are here to help you. Please contact us at your local office (Darlington 01325 281111 and Northallerton 01609 765765) visit our website at www.clarkwillis.co.uk or email family@clarkwillis.co.uk.