When going through a divorce, there are only a couple of options as to how to proceed with the marital residence at the time of divorce. The parties can choose to sell the house and split the proceeds or one of the parties can choose to buy the other party out of their share of the home. An appraisal is important because it provides the fair market value of the home at that time in order to give the parties an idea of what the equity in the home is. The equity in the home is the fair market value minus the amount left on the mortgage.
If the parties choose to sell the house then they will each receive one-half of the equity in the home. If one party chooses to buy out the other party, they will have to pay them one-half of the equity in the home. An appraisal is the only way to properly determine the equity in the home at the time of the divorce proceedings to allow the parties an opportunity to discuss their options.
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