There are many different types of mistakes that people can make during divorce proceedings. Some people end up paying a substantial amount to divorce specifically because they fight over every little issue with their spouses, possibly in pursuit of terms that the courts are highly unlikely to approve.
Other times, people make the opposite mistake. They make too many concessions to their spouses and end up at a significant disadvantage as a result. Even those who are inclined to avoid conflict as much as possible are still sometimes assertive about the largest resources in the marital state.
The home where spouses lived together is often their most valuable shared resource. Spouses who try to obtain their fair share of home equity often fall victim to one common mistake that people make during divorce.
The home’s value has probably changed substantially
The most significant and expensive mistake possible when handling resources worth hundreds of thousands of dollars or more is accidentally undervaluing them. Spouses sometimes look at the purchase price for their homes when deciding how to divide the value of the property when they divorce.
Particularly when marriages have lasted for decades and people stay in the same home for years, the amount of equity accrued in the property could significantly exceed the original purchase price even if there is still a balance due on the mortgage. People preparing for divorce with valuable assets, including real estate, need to know what those assets are worth if they hope to demand appropriate terms during property division proceedings.
Hiring an appraiser or consulting with a real estate agent can help people establish a realistic value for the home where they live. They can then compare that current fair market value with any remaining principal balance outstanding on their mortgage to determine how much equity they have to divide with one another.
Those who do not make an effort to calculate the current fair market value of a home might end up accepting far less than their fair share of equity in their divorce proceedings. Even if the couple decides against withdrawing equity from the home, the spouse not staying in the marital home should receive other valuable marital assets in consideration of giving up their home equity.
The amount people have invested and accrued in their homes during a marriage can be an important nest egg for rebuilding their lives after a divorce. Working with professionals to establish what marital property is actually worth can make a major difference for those preparing for a complex divorce. Those who know what their assets are worth are in a favorable position to demand appropriate property division terms.
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