As most Texans know, the state uses the community property approach to value and divide marital assets. An important step in using this approach is to properly and fairly value the marital estate. Many couples use the property valuation step to needlessly prolong the divorce proceeding. One method of precluding the use of this tactic is the hiring of an experienced and ethical real property appraiser.
What does an appraiser do?
Plainly stated, an appraiser’s job is to make an independent and impartial judgment as to the fair market value of certain designated assets. The fair market value is the price that a willing seller would demand from a willing buyer. The family home is usually the largest asset in a divorce, as judged by monetary value, and the method of setting the fair market value for the home will be analyzed in detail.
The appraiser’s methodology
Most real property appraisers begin the appraisal process by visually inspecting the subject property. The appraiser will inspect each room, taking careful measurements of each room’s dimensions. Most appraisers will record their observations with a digital camera. The appraiser will also inspect the exterior of the structure, looking for signs of negligent maintenance that may need repair. The appraiser also conducts a tour of the neighborhood to form an impression of market value.
Most reputable appraisers adhere to the rules set forth in the Uniform Standards of Professional Practice (USPAP). These rules set forth accepted methods of conducting an appraisal and ethical rules to ensure that appraisals are uniform, impartial and objective.
Determination of value
Once the inspection is completed, the appraiser will examine local real estate records to form a general idea of the fair market value of homes in the neighborhood. The appraiser next collects records of sales of homes that are roughly comparable to the subject property. An examination of the sale prices of these homes, combined with the appraiser’s experience and knowledge of the current real estate market, will allow the appraiser to form an opinion as to the subject property’s fair market value. This opinion is then embodied in a written report.
Once the appraisal report is completed, it is delivered to the client (or the client’s attorney) and to the court. The report at that point has several uses. It can be submitted into evidence if the case goes to trial. It can guide the divorcing couple if they decide to sell the house and split the proceeds, or it can be used by the parties if they attempt to negotiate the value of their assets. Anyone interested in retaining an appraiser may wish to consult an experienced divorce attorney for advice on how the appraisal process works and for the recommendation of a competent and ethical appraiser.