Family divorce lawyers are well-versed in laws pertaining to property valuation in a California divorce. Property valuation is perhaps one of the major issues that comes up in any divorce case. In California, all property must first be categorized as either separate or community property. Then the property is valued so that it can be divided fairly between the spouses.
Property valuation is extremely important when it comes to real property because this often includes the couple’s most valuable assets. Types of real property may include a marital home, investment property, farmstead property, and business property. State laws often require that these types of properties are appraised so that the judge can make a fair decision on how to divide the property. Judges may refuse to proceed with the divorce case if the necessary property valuation information is not available.
There are three types of valuation that are done on real estate property. A family law attorney can provide details on the different types but in an overview, the three types include:
In the market or sales comparison approach, the property is compared to similar properties that have sold recently on the real estate market.
In the capitalization of income approach, the property value is determined based on the present worth of the net income that the property will generate.
Lastly, the cost approach is built on the principle of substitution. It’s under the presumption that a reasonable person would not buy the property for more than it costs to purchase the land and build a home of equal stature. Selecting an appraiser for property valuation is an important task and a family law attorney can help guide you through the entire process.