Married couples generally accumulate assets in two ways: one or both spouses was financially well off at the time of the marriage, or the couple was financially successful in their respective careers. In either case, dividing the marital assets can be a complex and stressful process. One of the best ways to reduce the stress and to ensure that a person receives a fair share of the marital estate is to retain an appraiser. Appraisers are most commonly used to value real estate, and that generally includes the family home. Appraisers can also be used to value other assets such as antiques, works of art, businesses, rare automobiles and the like. This post will concentrate on the process used by appraisers to provide an expert opinion of the family residents.
The first step: an inspection
The first step taken by an appraiser is usually to inspect the property. In making the inspection, the appraiser will carefully measure the size of each room and the overall size of the property. The appraiser will also take careful notes on the condition of the property, noting the condition of the roof and the exterior paint condition. Most appraisers also take many pictures of the subject property, both inside and out. The appraiser will also check to see if the property lies in any special districts, such as a flood plain, a homeowner’s association.
The next step: choosing an approach to value
Appraisers generally use one of three approaches to value: the cost approach, the income approach, and the comparative value approach. The first two approaches are rarely used for the appraisal of residential property because they do not yield an accurate estimate of value. The comparative value approach requires the appraiser to have an extensive knowledge of the sales of other homes in the same or similar neighborhood, the prices for which such homes sold, and any other factors that may affect the market value of real property. This approach is also favored because it most often yields the most accurate opinion as to fair market value.
The third step: writing a report
Once the appraiser has completed the first two steps, the next and final step is writing the report. Having a written report on value can be very helpful if the couple elects to sell the home and split the proceeds. The report can be used to negotiate with a prospective buyer. If the couple cannot agree on how to liquidate their investment in the home, the report can be used as evidence if the case goes to trial.
Any appraiser should be checked for compliance with ethical standards and reliance on the Uniform Standards of Appraisal Practice (USPAP). Also, experienced divorce attorneys have most likely worked with many appraisers through the years, and their opinions should be relied upon.