San Diego and Carlsbad have many very large and valuable homes. Valuing these homes when the owners decide to end their marriage can be a complicated and vexing task. One of the most efficient methods of valuing these homes is to hire a professional real estate appraiser to provide an impartial estimate of the home’s fair market value.
What does an appraiser do?
An appraiser’s basic task is to provide an impartial estimate of the home’s (often called the “subject”) fair market value, assuming a motivated seller and a motivated buyer who are properly informed about market conditions. Most professional appraisers in the San Diego-Carlsbad area abide by the industry standard called Uniform Standards of Professional Appraisal Practice (“USPAP”). The USPAP rules ensure that the appraiser will use proper and widely accepted methods of determining the value of the subject.
How the appraiser reaches an opinion as to value
The appraiser’s first task is visiting the subject for visual inspections of the interior and exterior. The appraiser will carefully examine every room in the house, noting the quality of the building materials, making measurements of each room and creating a visual record of his findings, usually by using modern digital photography equipment. The appraiser will take special note of improvements such as a modernized bath or kitchen, the existence of special spaces such as a media room or sauna. When inspecting the exterior of the subject, the appraiser will pay particular attention to the physical condition of the subject and especially to any areas of maintenance that appear to have been neglected. The appraiser will measure the size of the lot, note whether the house has a multi-car garage, observe the quality of the roof and building systems such as the furnace, AC system (if any) and the existence of amenities such as a swimming pool or tennis court.
The next steps
After completing the visual inspections, the appraiser will obtain information regarding recent sales of houses that are comparable to the subject. The appraiser will compare these homes to the subject and will make an estimate of the fair market value of the subject.
Forming an opinion of fair market value
The appraiser will assemble and analyze the data that have been collected. When this analysis has been completed, the appraiser will prepare a written report using USPAP standards that sets forth the appraiser’s estimate of fair market value. The report is usually given to the party that ordered the appraisal, with copies often being provided to the other party and to the judge. If the couple decides to sell the house to a third party and split the net proceeds, the appraiser’s opinion as to fair market value can serve as a helpful negotiating tool. If the couple decides instead to include 50% of the appraised value into their individual property accounts, the appraisal will help determine the size of their individual marital estates.
Dependable legal advice
A knowledgeable divorce attorney can help select an appraiser and work with the appraiser in developing a professional estimate of fair market value.