Basic question or two on division of real estate assets

In My Humble Opinion
1

Going thru a divorce (so far amicable) but having trouble figuring out the proper math for division of the assets of our house. Using round #'s:

House Purchased in 2000: $160,000

Down payment: $32,000

House Appraisal in 2004 (last week): $250,000

Current Equity: not sure (I’m at work) but can’t be that much more than down payment since it’s so early in the mortgage.

Investment in house: We are making assumption that we have both put in equal amounts of money over the course of ownership.

I do not plan on selling it, hoping to buy her out. Believe it or not, I want a resolution that is totally fair to both of us, not trying to screw her out of anything, at same time tho’ want to protect myself.

Note that although the appraisal is “as-is”, there is at least $15,000 of work that must be done to sell it (roof, removal/relocation of oil tank, garage door).

My soon-to-be ex-wife suggested that she wanted half the down payment and half the difference between appraisal value and purchase value (ie, the earnings).

That would be $16,000 + ($90,000/2) = $61,000. Does that seem right? Or should the payment be based on equity + appreciation? Or should it be appreciation only? What about taxes?

How does the fact that $15,000 must be put into the house to sell it (in theory) apply?

Or is there a better solution?

Color me confused.

2

The $15,000 that potentially would be put into the house if you were actually to put it on the market right now is not relevant. What IS relevant is the “as-is” appraisal. I’ll let more knowledgeable financial people answer the rest (I’m just a person who’s been divorced and went through a similar thing.)

3

The down payment is also of no importance.
All that matters is the current as-is valuation and the debt.

It might seem that the really accurate way would be to actually sell it as is, and calculate all the bank and broker fees and taxes and such. At that point you could clearly find out what would be the end result to your joint account and you each get half. Then just be sure she ends up with that amount.

However, be warned that if you think you can actually try to sell, and then back out when you get an offer, it may backfire. If the offer was valid you might still owe the broker fee despite the deal not going through.

A more important point I learned the hard way: Once she gets a lawyer you no longer will get half.
I tried to calculate exactly half, but we owed money and she earned less than me.
So her lawyer just demanded I pay all the debt. As the case dragged on with endless delays and my lawyer fees mounted, it looked like I would just get deeper into debt, so I caved. Why was my lawyer no help? Well, it seems it was in his interest to drag out the case and he had no gain if I won. American justice.

4

I work in New Jersey real estate. I would suggest contacting a CT REALTOR and asking for a market evaluation letter. This simply tells what the property could sell for in today’s market. It will usually cost about $50.

Then offer your soon-to-be-ex 50% of the current market value to keep the house.

5

Thanks for replies. I think I got it - Limbo Donni’s method seems to make sense to me.