More and more divorcing couples in Tennessee are resorting to either mediation or collaborative divorce to eliminate much of the anger and stress that often accompanies the divorce process. Even with this trend, the stress of certain issues, such as the value of the family home, cannot be completely eliminated.
One of the most effective techniques for eliminating or greatly reducing the stress caused by this issue is to obtain a professional appraisal of the homestead.
The advantage of a professional appraiser
Professional appraisers have one task in appraising residential real estate: providing an unbiased opinion of the fair market value of the property assuming a willing and informed seller and a willing and informed buyer.
Hiring a professional appraiser to provide an estimate of value generally eliminates all emotion concerning the value that might be assigned by one or both spouses.
The appraisal process
The appraisal process begins with an inspection of the property (usually referred to as the “subject”). The appraiser must visually inspect the property to begin the valuation process.
An appraiser will schedule the visit with the homeowner at a mutually convenient time. The appraiser’s visit begins with an inspection and measurement of the exterior of the property. The appraiser may use this visit to inspect the neighborhood in order to make an assessment of the types of homes are nearby.
The appraiser will next inspect the interior. All rooms will be carefully measured, and the physical status of the interior will also be noted. Most appraisers use modern digital equipment to measure and develop a video record of the size and condition of each room. Special features, such as a recently up-dated kitchen or master bedroom suite, will also be noted.
Approaches to value
Professional appraisers use one of three approaches to value: the replacement cost approach, sales comparison approach, and income approach. Replacement cost is rarely a helpful approach because the cost of labor and materials has been steadily increasing since the end of WWII.
The income approach rarely works for a single-family house but may be applicable if the subject has more than one dwelling unit. The sales comparison approach is the most commonly used approach. The appraiser can ascertain the sales prices of recently sold homes from public records.
With this information and personal knowledge of property values in the market, the appraiser can develop an accurate and reliable opinion of the subject’s fair market value.
Using a professional appraiser can eliminate the parties’ emotional reaction to selling or dividing the net value of the family home. The divorcing couple can either use the appraised value of the home to assist them in negotiating a sale to a third party or by being included in the couple’s net assets.