Divorce - House valued low on purpose?

[mikestr]

I hope this is ok to ask here and I have the right forum?

 

I am currently going through the first part of a divorce from my wife, who is living in the family home (no kids), while I had to leave a while back.

 

Now divorce proceedings have started, we need to value the assets we have.

 

She has already come back and said that the house is suddenly worth less than half it was a year ago (valued by an independent estate agent back then) and worth just over what we paid for it 13 years ago, even with major extensions/restructure to add value, and the London based area.

 

This is very obviously a ploy to stay, and I get a 'pay off' for very little.

 

As she lives there, how can I prevent her 'influencing' valuers coming to the home?

 

I can see it being valued very low, and after the separation, it appearing on the market for over DOUBLE the price within 6 months.

 

Is there anything I / Solicitor can do?

[mikeylo]

You can send your own estate agent for valuation.

[salparadise]

This is such an obvious trick that I'm sure there is a method for making it fair. In the US, in my state, you don't have to accept a low ball and you don't have to average it with a second opinion. What you do is have the two parties agree on a independent professional to do the assessment, and require that it be done without either party being present. If the person doing the valuation knows that it's a division of assets they will try provide a fair value estimate, whereas if they're doing it for a finance they'll try to make it match the target number. Tell your solicitor that she'll try to get a lowball and let him handle the details.

[beatcuff]

offer to buy HER out at that figure.

[PegNosePete]

Did your wife pass on the valuation in writing from the agent, or is she just telling you what they told her? It's not in the agent's interests to under-value a house, since they get paid on commission, they get paid more if they get a higher price. Also giving a higher price means you're more likely to choose that agent over the competition. So it's quite difficult to "influence" an agent to give a lower value. However it's very easy for your wife to cherry pick what the agent told her, or simply to lie to you. Make sure you see the agent's valuations, don't rely on your wife's word.

 

You should always have 3 proper valuations, and take the average. Don't include this one in the averaging if it's not a valid valuation (as described below). Tell them that your wife might say things to reduce the figure they give, so you'd like to receive an accurate valuation in writing directly from them.

 

Usually an estate agent will give you an initial sale figure (the asking price), a realistic sale price (what they expect buyers to offer) and a "quick sale" price. They will also give you justification of their value; if they don't then make sure to ask for it. If the value is lower than you expect, ask them why? Look for similar properties in your area that are for sale, or have sold recently. Zoopla is a great resource for this, it has details of all house sales and often shows the original sales description. Usually an agent will refer to recent sales and say your house is similar to this one but it has a downstairs toilet so it's worth £5k more, or yours is similar to this one but one less bedroom so it's £20k less. Comparables are a huge part of house valuations.

 

I don't think you need to involve your solicitor in this unless there's additional complications. You can speak to the estate agents yourself and arrange access with your wife, and then when you've got 3 valuations, pass them on to the solicitor.

Edited March 28, 2017 by PegNosePete

[carhill]

Curious... in the UK do they have professional appraisers who have no affiliations to any entity, like a real estate sale entity or lending entity? I ask because I've always used independent licensed (by the state) professional appraisers on my deals who I pay directly, usually between 300-600 bucks, for a thorough analysis of any property, including detailed comparables (other similar properties which have recently sold).

 

They physically measure the property, search public records, draw up maps, take pictures, assess condition, pretty much everything. Anything like that in the UK? If there is, I'm a bit surprised another licensed professional, the solicitor/lawyer, isn't doing their job here.

 

The buyout offer at their price is a good negotiation technique, presuming a professional appraiser shows them lowballing.

 

So glad my divorce and all the real estate haggling are in the distant past. Good luck!

[SoleMate]

You shouldn't rely on a "valuation" from an "independent" estate agent - that is pure marketing and is typically off the cuff. You should only rely on a written appraisal report showing all the comps and adjustments. In the US this is typically at least 6 dense pages showing many factors and containing a lot of arithmetic. Have you seen such a report?

 

And yeah, suggesting a buyout, especially if you're sincere and she knows it, is a great way to test the authenticity of these value claims.

[PegNosePete]

Curious... in the UK do they have professional appraisers who have no affiliations to any entity, like a real estate sale entity or lending entity?

Yes, but you generally have to pay for their services, and to be honest they do just the same thing an estate agent does for free. I don't think an "independent" valuer will really do anything different than an estate agent. They will simply give you the "realistic sale figure" rather than the "initial asking price". But you can always ask the estate agent for both, anyway.

 

Lenders do valuations when you apply for a mortgage but generally they do under-value, because they want to allow a bit of lee-way to make sure the asset covers the loan. You should never rely on a lender's valuation. Maybe this is what OP's wife has given him and that's why it's lower than expected? An estate agent generally would never under-value a house for the reasons in my last post.

 

You shouldn't rely on a "valuation" from an "independent" estate agent - that is pure marketing and is typically off the cuff.

That doesn't match my experience. I moved house 3 months ago and had valuations from 3 estate agents. They were all very detailed, well over 6 pages! With printouts of comparables and reasons why my house was similar, and reasons it was slightly better or worse than each of them. Very very detailed, they all explained exactly why they had suggested the figure they had, and even a sales strategy like how long to offer it at the initial asking price, what offers to accept or negotiate, when to reduce it, etc.

 

Maybe estate agents do it different this side of the pond, but in the UK estate agents are the best route to go.

[SoleMate]

Sure, if the valuation in question is a detailed analysis of the property versus comparables as Pete describes, it's checkable - as you can study all the data and the calculations and compare them to independent sources - and presumably reliable if it checks out. It's just that the OP didn't indicate any of that and referred to the valuation as a "ploy" that, incredibly, showed a flat value over 13 years - despite improvements, and London prices doubling over that period.UK House Price Index It might have been easy to game the valuation one way or another....say, by misrepresenting the condition of the property.

 

OP, check the value independently. Small price to pay.

[PegNosePete]

It's just that the OP didn't indicate any of that and referred to the valuation as a "ploy"

Yes, from the information given by the OP, the "valuation" given to him by his wife could simply be a figure that she plucked out of thin air without even having anyone round to take a look. Or just looking at the expected value on Zoopla or whatever, which can be very inaccurate. Either way it doesn't sound as though she has had a proper valuation done at all.

 

OP should make sure to get thorough, written valuations with justification and comparables from 3 different estate agents. If he has that, then paying an "independent" valuer is not necessary.