What is Real Estate Equity Division Law?
Real estate equity division law details the guidelines and rules associated with the ownership of a piece of real property or a corporation. The net worth of a piece of real estate minus the liabilities and assets connected to the property. In general, terms, real estate equity division law in relation to residential properties is the difference between what the property is worth, and what is owed on the home loan.
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Debt Owed and Equity
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The debt owed on a home fluctuates over time, as payments are made, which influences the amount of equity in the home. Borrowing against the equity, or taking a second mortgage on a piece of property, decreases the equity division in the home. As the real estate market fluctuates, so does the value of a home.
Fluctuating Home Values
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A home which was worth $650,000 three months ago could be worth $450,000 today, due to the fluctuation in the real estate market. A real estate appraiser, who uses the recent sale prices of comparable properties to determine a fair market value, determines the equity in a home.
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Real Estate Equity Division and Divorce
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The division of real estate equity also comes into play when a divorcing couple owns the home, the home is headed to foreclosure, or a lien is being placed against the property for unpaid taxes or other bills. An increase in home value can raise property taxes during annual evaluations by the local county auditor's office.
State Guidelines and Division of Assets
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Individual state rules governing the division of assets can affect the amount of equity claimed by a divorcing couple. An attorney will be needed to advise a divorcing individual, and to fight the validity of a division or equity claim or home appraisal. Real estate appraisers are independent contractors, and can be hired by either party, or ordered by a lending institution or judge to assess real and personal property during a court proceeding.
Real Estate Appraisals and Division of Equity
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A real estate appraisal is valid for only the day it is issued, and is often used as an official statement of worth in court proceedings. Anything which happens to improve or detract from the home after the appraisal would require a new evaluation of the home to re-establish a division of equity value.
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