Each New York divorce is different, but one feature is shared by all of them: the division of marital assets. This issue can prolong a divorce and can be a source of lasting anger between the parties.
For most couples, the family home is the couple’s largest asset. Determining the value of the home is essential to the resolution of financial issues facing the divorcing couple, but most divorcing spouses have little or no experience in valuing real estate, and they approach the question of value from an intuitive viewpoint. A better way to determine the value of the family home is to retain a professional appraiser.
What does an appraiser do?
An appraiser’s principal task is to provide a trained opinion on the fair market value of the property to be appraised. The appraiser must assume that the value is the price that a willing seller would accept from a willing buyer. In reaching the opinion as to value, the appraiser must use a number of professional tools.
How does the appraisal begin?
An appraiser’s first task is to inspect the property that is the subject of the appraisal. During the visit, the appraiser will inspect the subject, measure every room, and form an impression about the property’s overall quality. The appraiser will also make extended and careful observations about the surrounding neighborhood. The appraiser may make a sketch of the subject or take extensive photographs or use video equipment to document the features of the subject.
How does the appraiser arrive at an opinion as to value?
Appraisers generally rely on three approaches to estimating value: the replacement cost approach, the income approach, and the sales comparison approach.
The replacement cost approach is rarely used because the costs of materials and labor will most likely have increased since the subject was built. The income approach is used only if the subject has portions that can be rented.
For most residential properties, the appraiser will use the comparable sales approach. In using this approach, the appraiser will search public records for recent sales of homes that are comparable to the Subject in size and location. The appraiser will make adjustments for the number and size of rooms, the quality of construction, and recent improvements such as a new kitchen or renovated bedrooms. Once the appraiser has made the necessary comparisons, the value of the property is compared to the comparable properties chosen by the appraiser. When this work is completed, the appraiser will prepare a written report setting forth the professional estimate of fair market value.
Conclusion. The estimate of value can then be used by the divorcing couple and the court in deciding how to value the house. Anyone who wonders about the utility of retaining an appraiser may wish to consult an experienced divorce attorney for an overview of the appraisal process.
