Can a homeowner use a comparable property where one spouse buys it after a divorce?

The premise behind using comparable properties in real estate analysis revolves around the concept of "arm's length transactions." An arm's length transaction is a deal in which both parties act independently and in their own self-interest, providing a clear market value for the property.

When one spouse purchases a property after a divorce without the involvement of independent parties negotiating on behalf of both individuals, it does not represent an arm's length transaction. This is because the dynamics of divorce can lead to unique circumstances that may not reflect the property's fair market value. Issues such as emotional attachment, financial pressures, or family dynamics can significantly influence the sale price, making it less reliable as a comparable property for establishing accurate valuations in real estate transactions.

Considering these factors, using such a property as a comparable in promoting or evaluating another home would not be appropriate under standard real estate practices. This ensures that property valuators maintain fairness and accuracy in assessments, leading to better-informed decisions in real estate transactions.