What a Joint Expert Valuation of the House in my Divorce

One of the many misunderstood concepts is a "joint expert" when couples are sorting out the finances in Divorce. So who values the house(s) an Estate Agent or a Surveyor and why a Joint Expert?

I will try to unravel some of the misconceptions or misunderstandings here. Let's start at the beginning:

When a couple are dividing up the assets of the marriage often one of the most valuable assets is the matrimonial home and possibly there are some investment properties to consider. Let's just look at the matrimonial home for now.

The first port of call is suggesting that the clients try to agree a valuation without recourse to experts. So what is needed is an "agreed" figure for the value of the matrimonial home which can then be used to offset other assets or for mortgage borrowing purposes, or to decide whether the house needs to be sold or not. If there is a mortgage the outstanding mortgage debt and costs of sale would be deducted to provide for the net equity in the property.

So how do you get this agreed figure.

1 Three Estate Agent Valuations

Your Solicitor or Legal Advisor may initially suggest you obtain 3 estate agent valuations and average them to get a value. These are sent to the estranged husband/wife who may agree or not. Often the other party does not agree and they provide their own figures. So you then have a dispute as to the value. Experience has taught those who deal with cases that this argument can go on and on and on. Suspicions arise saying the wife will have raised all the defects in the property so as to a get a low valuation or not shown the defects to get an unrealistic valuation. Even suggesting or agreeing to split the difference between the wife's and husband's valuation causes problems as neither can really trust the value.

So along comes the suggestion to get a "joint expert valuation.

2. Joint Expert Valuation

A joint expert is one expert who is instructed by both the wife and husband (through legal advisors if they have them) by preparing and sending one letter which sets out that the valuation is to be an independent valuation with no bias.

It is highly recommended that the valuation is undertaken by a Surveyor who is often employed by Estate Agents but not always. The key point here is that the valuation is "independent" and the expert is instructed by a joint letter to carry out a valuation without bias. The letter sets out the basis of what is expected of the expert.

The reason a surveyor is recommended is that this is an expert report and Surveyors have qualifications to provide such valuations. Estate Agents are not always qualified surveyors. Often to ensure independence, one party suggests 3 potential surveyors and the other party chooses one. This joint letter is written and agreed by both parties.

So the report comes in with a value, there is no bias and both husband and wife are bound by the valuation (unless there has been a material factual error).

The benefit is that it saves time and costs, especially when both parties are legally represented, because letters going backwards and forwards disputing the valuations can easily add up with the legal advisors time,it is easy to get to over £1000 plus Vat. It also helps to create more trust between the parties.

I have included a template "Letter of Instruction" in my financial package of documents for use from FDA to the FDR. Check my templates out here. Also, I have included it as a separate document. This is is a template that I use in practice.

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