All divorces can be difficult. For high-asset couples, the process can be especially stressful because the division of assets can require more effort and generate more anger and stress.
For most couples, including high-asset couples, the single biggest asset in the marital estate is the family home. Each party is likely to hold strong opinions concerning the value of the house. One of the most effective methods of resolving this conflict is retaining an experienced professional appraiser.
The basic purpose of a professional appraisal is to obtain an unbiased opinion on the fair market value of the home assuming the existence of a willing seller and a willing buyer under current market conditions.
Most professional appraisers follow the Uniform Standard Professional Appraisal Practices, a code of ethics and procedures published by the Appraisal Institute.
The appraisal process
After retaining the appraiser, the first task is inspecting the property (“the subject”) for which the appraisal is sought.
The appraiser will visit the home and make a detailed and thorough inspection of the home’s interior and exterior.
Most appraisers employ modern digital photographic techniques to make a thorough visual record of the home’s physical condition, both inside and out. The appraiser will measure each room and make note of any special features, such as a remodeled kitchen or bathroom.
The appraiser will also note whether the house has been well-maintained or whether certain tasks, such as a weather-resistant roof, have been ignored.
After inspecting the subject and its surrounding neighborhood, the appraiser will return to the office to inspect public records concerning the value of the subject and its neighborhood.
The appraiser will also look at public records of recent transactions involving comparable properties (called comparables). The appraiser will record the sale price in each transaction and make adjustments for differences between the subject and the comparables.
The final report
Once the appraiser has studied and digested the information, they will formulate an opinion on the fair market value of the subject. The appraiser delivers the report to the client (usually one of the parties to the divorce or the attorney for one of the parties).
The parties can use the appraisal report to negotiate a price with a third-party buyer, or the parties may accept the valuation stated in the report and thereby resolve their differences on this issue.
If none of these alternatives occur, the parties give the report to the judge to be used as evidence at trial. The attorneys for each of the parties can provide advice on the proper use of the appraised value to each of their clients.