One of the most difficult issues in any New York divorce is valuing the homestead and allocating the net value between the parties. Each spouse may have his or her own opinion about the home’s value, especially if the family has lived there for more than five years.
Most couples have two options in valuing the home: sell the property and divide the net proceeds equally, or let one spouse stay in the home and give the other spouse credit for 50% of the net value. In either case, determining the value of the house is essential to resolving the issue. The key to both approaches is the use of a registered appraiser to provide an opinion as to fair market value.
Why hire an appraiser?
Qualified appraisers in New York have been trained in professionally accepted methods of appraising real property, and they provide the most reliable and impartial method for determining the fair market value of the family residence. Most qualified appraisers subscribe to what are called Uniform Standards of Professional Appraisal Practice.
Hiring an appraiser who follows the USPAP code provides protection against an adverse attack at trial if the parties cannot agree on the home’s fair market value.
What does the appraiser do?
The appraiser’s first step is to visit the property that is the subject of the appraisal. During this visit, the appraiser makes careful observations of the interior and exterior of the subject property, making note of any defects or ignored maintenance. The appraiser will also measure each room because the size of the dwelling is a significant factor in determining value. The appraiser will also tour the house’s neighborhood to see if it is comparable in value to surrounding houses.
The appraiser next collects information on recent home sales; this information includes the size of the property and, of course, the sale price. The appraiser then compares the subject property with the comparable properties that sold in the last 12 months. Using current knowledge about the local housing market, the appraiser determines the fair market value of the subject property. This opinion assumes that the value reflects the price that a willing seller would accept from a willing buyer.
The final report is usually given to the judge in the case and to the other party. A competent and professional appraisal report will often lead the divorcing parties to adjust their opinions about the value of the house, leading to a settlement of this difficult issue.
Anyone contemplating a divorce should contact a competent divorce attorney for advice on the cost and uses of a professional appraisal report.