Something you own is valuable when a person is standing in front of you, peeling off the Benjamins. That is the most accurate appraisal you will ever get. Even appraisers get fooled, as with Antiques Roadshow’s $50,000 appraisal1 of a 19th century “grotesque face mug” that turned out to be a kid’s high school art project from the 1970s. Accurate appraisal of real estate is key to property settlement in divorce. Many divorcing couples opt to have one spouse hold onto the house and buy out the other spouse. But how do you know how much the house or real estate is worth?
How Real Estate Appraisals Work
When thinking of selling your home, you normally contact a real estate agent and arrange for a market appraisal. The agent and you have an interest in maximizing the value of your home. To establish a value, an appraiser compares your home to comparable sales in the area.
Comps, or comparable homes, are in the same “area” much as Virginia Beach is in the same “area” as Halifax, Nova Scotia. Geography matters less than immediacy. The comps should be from within the past six months, or if you live in a sluggish market, the past year.
The appraiser views and measures interior and exterior, then matches square footage, house age, construction and other factors as closely as possible. Condition, the number of stories, attached or detached garage, and even details such as appliances and the age of the HVAC system play into an accurate appraisal worthy of the Uniform Residential Real Estate Appraisal (Fannie Mae form 1004). This form holds up in court in both contested and uncontested divorces.
This detailed method of appraisal is the most accurate. It is also the most expensive, especially if a real estate agent does not view a potential sale in the future.
A less exacting appraisal, but still an appraisal, is a drive-by appraisal, as detailed by SF Gate. The appraiser does not meticulously note every nuance of your house, but gets a general view of its condition and age. One-story ranch circa 1985; two-car attached garage; needs a new roof: the appraiser then scouts out similar properties in the neighborhood (or “area”) and looks up their sales as comparisons.
Who Should Pay for the Appraisal?
If you and your wife are planning an uncontested divorce, you both have a stake in getting a fair market value for the property, so you both should split the cost of the appraisal. You only need a single appraisal, since you two are working together (“uncontested” means you have no challenges or issues to take before the judge).
If you are filing a contested divorce, you need two appraisals. She will pay for hers, and you will pay for yours. The judge, on seeing the two appraisals, will determine the house’s fair market value (usually) by finding the average of the two appraisals. If, though, your appraisal for the home she expects to remain in, and buy you out of, is significantly higher than her appraisal, the judge may order a third appraisal. You two would split that appraiser’s charges.
Alternatives to a Real Estate Appraisal
If you and your wife are working with two attorneys on an uncontested divorce, you both may be happy with a Comparative Market Analysis (CMA). Here the real estate agent, not a separate appraiser, simply looks at other recent sales in your area. An agent may do this for little or no charge, but it sacrifices detail and specificity for cheapness and speed.
Huffington Post’s divorce column outlines this faster, less expensive method, and also describes a way that is not usually completely valid in court, but can work in many cases:
If you and your wife are truly in agreement on the large brush strokes of the divorce, and you simply need to plug a number into a calculator to divide by two, you can do your own research using commercial real estate websites. She should research and print out three homes similar to yours in your “area,” and you should do the same. You compare the six finds, and from them, if you both agree they are approximately similar to your home, take the average of two, three or all six (depending on how many you rejected from each spouse’s samples).
Call The Divorce Lawyers for Men
No matter what you and your spouse do regarding the real estate appraisal, keep it in perspective. Though an emotional flash point (“Our kids grew up in this house!” “My baby’s heights are on the kitchen door frame.”), the house is, eventually, just a house. You may both need to move on from that stage of your lives and move into something smaller, more economical, and more convenient for sharing custody.
When dealing with real estate appraisals, real estate agents, brokers, appraisers and all the other professionals entangled in your divorce, turn to the experienced lawyers at The Firm For Men. By calling 757-383-9184 or contacting our offices online, you can speak with a divorce attorney representing Virginia’s men exclusively. We can help with all the details of a property settlement, and more.