Valuation for Buying Out (Consent Order)

[danwatto]

Hi Guys,

My wife and I are in the process of separating and we have agreed to do so out of court via consent order.

Our sticking point is in determining the value of the property we live in, I would like to buy out her half.

We have two bank valuations, one for $1m, one for $1.1m. However my wife doesn't want to take either as believes the bank valuation is conservative, fair enough I'm happy to look at other options.

So I would like to get a professional/licensed valuer to do the valuation. However the wife says that it would still sell for more than any valuer would give it, she believes the house is worth alot.

The wife believes it fairer to get real estate agents to value it. I tried to explain that agents will appraise the property and probably have a higher value i.e. what they HOPE will sell it, or at least will sell us their services.

So I'd like to find out what is the official method of valuing property in separations and divorces that the court uses? The wife thought it was a real estate agent, although I explained this is extremely unlikely I need proof. Common sense says it would be a licensed valuer, but is this documented anywhere that someone can point me to?

Second question is there a list of approved valuers that the NSW family court uses so that we can hire some of them to give a range of valuations in order to resolve this?

Thirdly, any advice on what I should do if she doesn't accept any of these valuations or wants to go for a way high price? Neither of us want court.. at the moment I can only think of one other option if she refuses my offer price and that is to sell. If the agent appraisals come in higher, I could offer to give her 2 months for the agent to get that price, if they don't get the price ask her to take the official valuation maybe... anybody been in this situation before?

Many thanks

 

[Rolf Latham]

let the ex buy it ...........at auction, thats the ONLY way you will get a "fair" price on the basis of that thinking.

Do the marketing, set the auction date, and set the reserve at 1.3 and see what happens.

REAs will give you are range of 20 % on that type of stock, and will generally look to "buy the listing ".

2 or 3 valuer vals will give you a reasonable range thats on the money.

There is a major misconception that valuers will value mortgage purposes much lower than market,on average, in my experience over 13years thats not the case


ta

rolf

 

[danwatto]

Hi Rolf,

I certainly could offer her to buy it at auction! But she won't of course

Yes the valuations from the bank I think are fair, to be honest as a buyer I wouldn't pay much more than that myself given the location near a busy road.

I am probably going to have to pay a little bit more than half in order to settle it, at least I will save on CGT and Stamp Duty. I just have to get creative on how to source that extra cash, maybe paying off over a couple of years to her or transferring my super.

But I hope to find out from some law folks on the official methods, something to help make her comfortable she's not getting ripped off.

 

[Terry_w]

What about you each order you own valuations, with licensed valuers, and then averaging the 2.

A court is only going to accept a licensed valuer's valuation (I imagine). You could search a few recent property settlement cases via links on the family court website.

 

[TMNT]

We have two bank valuations, one for $1m, one for $1.1m. However my wife doesn't want to take either as believes the bank valuation is conservative, fair enough I'm happy to look at other options.

ahh.. women and valuations, they are never happy when it doesnt suit their wants,

unless your area is a hot area where every buyer is going crazy, take it to auction, and make sure your house looks crap, messy

and make sure you get her to sign a form/agreement that you will take the auction price, nothing more, nothing less

But I hope to find out from some law folks on the official methods, something to help make her comfortable she's not getting ripped off.

in my experience, both personalyl and professionally,. if she doesnt get what she wants, she is going to think you ripped her off regardless, and you will be blamed for it

so you might as well do whats in yoru best interest

 

[fernfurn]

Women in particular have an emotional attachment to their home and therefore think it is worth much more than anyone else does. Reverse the procedure, say you have decided she can buy you out at the $1.1 and watch her backtrack. Business partners I knew did this and the other partner quickly reassessed his idea of what the business was worth. Also, get onto real estate.com and show her what other properties like yours in the area are worth.

 

[S.T]

I think you should just sell it at auction, seems like you're on a hiding to nothing trying to get a valuation she will accept and still be reasonable for you to pay.

Sell it, get a new place for yourself, no old memories etc and start again.

 

[FormerLurker]

Hi Rolf,

I certainly could offer her to buy it at auction! But she won't of course

Yes the valuations from the bank I think are fair, to be honest as a buyer I wouldn't pay much more than that myself given the location near a busy road.

I am probably going to have to pay a little bit more than half in order to settle it, at least I will save on CGT and Stamp Duty. I just have to get creative on how to source that extra cash, maybe paying off over a couple of years to her or transferring my super.

But I hope to find out from some law folks on the official methods, something to help make her comfortable she's not getting ripped off.

Afraid this is unlikely to work - consent orders apparently look at seperating both parties financial ties ASAP and would likely reject consent orders with a payment over time aspect. To go this route you would need to create a binding financial agreement.

 

[danwatto]

Afraid this is unlikely to work - consent orders apparently look at seperating both parties financial ties ASAP and would likely regent consent orders with a payment over time aspect. To go this route you would need to create a binding financial agreement.

Really? Ahh I guess I need to think of something else.
I could offer her my Super in order to make up the difference, I understand that super is transferable easily during separations.

 

[wylie]

Do you really want to hold the house? If so, then what is fairer than both of you engaging (and paying for) a valuer of your choice. If those are very far apart, then you could share the cost of a third valuer.

Valuers are not going to be swayed by the emotional stuff, and certainly are not going to risk being anything but professional in such a matter.

I'm guessing if you both pay for your own valuer, both of them will be calling the same local agents and/or using RP Data to find comparables. I cannot imagine they will be that different, but you can average them out, which means it is fair to you both.

 

[Tigerboy]

Once you have consent orders, the court itself can order a valuation of the property. If this is done, then there should not be any arguments.

I would discuss this with your solicitor to have a court appointed valuer, otherwise you're in trouble trying to get your wife to agree - there is just too much emotion.

 

[danwatto]

Yeah I would prefer to hold onto the house, but I think I need to start looking at this from the point of view of a normal "buyer".

Figure out her asking price, and figure out what I think the house is worth and what I'm willing to pay.

There is no CGT as PPOR, but there is lost stamp duty, and agents fees.
Break costs are irrelevant as they occur on refinance or on sale.

I was thinking about bank valuations from another point of view now as well, without mortgage insurance involved, the bank WANTS the deal. If the valuer comes in below the amount on the application, I'm sure there must be some complaints if they do that too often. So I no longer think bank valuers are conservative if no LMI is involved.

The more I try to convince her of the price the less it works, she needs to think she come up with the figure on her own.

Therefore I'm going to be ok to get some real estate agents appraisals. I'll get a few, and let her figure out her price. If it's too high, I'll ask for a time limit on the sale of 6-8 weeks with the condition if it doesn't sell the wife should accept my offer.

Although hopefully it won't come to that, looking at comparable sales I think the agents are going to show the same value as the highest bank valuation anyway.

 

[danwatto]

Once you have consent orders, the court itself can order a valuation of the property. If this is done, then there should not be any arguments.

I would discuss this with your solicitor to have a court appointed valuer, otherwise you're in trouble trying to get your wife to agree - there is just too much emotion.

We don't have a solicitor, the problem with family law is that the solicitors cannot represent both of us together, and require that we BOTH get our own solicitor and then the solicit between us. This adversarial approach is against what we want - which is to minimise damage to the money we will part with. 2 Solicitors will be very expensive and they are known for pushing clients to try and get "more" which obviously results in disputes, and everyone gets less except the solicitor.

Even the "collaborative" solicitors still need two solicitors, still opposing each other.

Consent agreement is the best way I think, avoids the solicitors.

 

[vaughan]

Consent agreement is the best way I think, avoids the solicitors.

... but you're not getting consent about the value of the house.

 

[danwatto]

... but you're not getting consent about the value of the house.

We haven't finished yet, so far we only have bank valuations. If we get professional vals and real estate vals, and we are both happy with one of them, then we have consent.

If we are not happy with the vals, and we decide to sell, we still have consent.

 

[Macca]

Hi Dan,

I would sell it and split. If you have children you will continue to see each other often about the kids, every time she comes near "Her House" it will irritate her.

The other thing is that should you form a new relationship there are many women that will not move into the house that you used to share with your Ex, too many skeletons there.

The true valuation is what you get for it, so I would sell it, the peace and finality will be well worth it the long term IMO

 

[Truly Exotic]

We haven't finished yet, so far we only have bank valuations. If we get professional vals and real estate vals, and we are both happy with one of them, then we have consent.

If we are not happy with the vals, and we decide to sell, we still have consent.

it doesnt sound like she is ever going to be happy with the valuation, unless it comes up at $10million, best way to test anyone's true intentions are to agree on a figure, and then say "ok, so we agree its fair, ok buy me out then!"

 

[danwatto]

There is no children.

But yeah I am considering selling too. Although I prefer not to. Even if I keep the house it doesn't mean I need to live there forever. It would make a great IP if I move.

The other catch is we have two big dogs that I agreed to take on the responsibility for when we split. In Sydney it's pretty much impossible to get a pet friendly rental unless you have only cats or a small dog.

If I stay owner occ, I can keep the dogs. I don't want to rush-buy something during a settlement period of a sale either. I'd rather get the split done, and move later when I have time to focus on that as a separate project.

I also feel if the dogs go, things may be less amicable.

 

[danwatto]

Turns out the real estate agents come in at a similar value after all.

Now we have a price, just need to negotiate the other factors.