One of the most challenging issues in a high-asset Virginia divorce is determining the value of the family home. In some divorces, the couple can agree on the value of the home. In other divorces, the couple will be unable to reach an agreement on the value of their home. In these cases, the disagreement may poison other aspects of the proceeding, such as alimony and child support. One of the most efficient methods of fixing a value for the family residence is retaining a professional appraiser.
What does the appraiser do?
A professional appraiser’s principal duty is providing an unbiased opinion about the fair market value of the home (often referred to as the “subject”), assuming that both buyer and seller are equally motivated and equally knowledgeable about the local real estate market. Most professional appraisers in Northern Virginia abide by rules known as Uniform Standards of Professional Appraisal Practice (“USPAP”).
The mechanics of a professional appraisal
Initially, the appraiser’s will visit the home to inspect of the interior and exterior thoroughly. The appraiser will carefully measure the dimensions of the lot and all structures. The appraiser will similarly measure the dimensions of every room in the subject. Most appraisers will make a visual record of their inspection using either a digital camera or a digital video. The appraiser may also interview either of the owners, asking questions about needed maintenance and recent improvements. The appraiser’s visual inspection of the subject will also ensure that all necessary repairs, such as a new roof or furnace, have been made.
The appraiser will next obtain records of recent sales of comparable properties from the county assessor or other keeper of official land records. The appraiser will note the purchase price of each transaction and make adjustments to bring the sale prices of the comparable transactions within a range that permits a meaningful comparison with the subject.
Approaches to value
Appraisers make use of three approaches to value: the replacement cost method and the comparable sales approach. A third approach, using the subject’s income, is rarely used because virtually no residences produce income. The replacement cost approach is not reliable because the cost of labor and materials for the subject will likely have appreciated far faster than the subject’s fair market value. An experienced appraiser will use their knowledge of the local real estate market together with information gained during the inspection and from the review of comparable sales to form an opinion on the subject’s fair market value.
The final report
This conclusion forms the heart of the appraiser’s final report. A copy of the report is given to the client and to the client’s attorney. Other recipients may include the other party and the court. A knowledgeable divorce attorney can help a person find a competent appraiser and understand the appraiser’s findings.