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Using an appraiser to value real estate in a Georgia divorce

For most Savannah couples who have decided to tend their marriage, the division of assets can present a very thorny problem, especially in marriages that have lasted more than ten years. In such marriages the family home tends to be the most valuable asset; in addition, each spouse may have developed an emotional attachment to the house that makes a rational decision about value very difficult to attain. Using a professional appraiser can make this decision much easier.

What does an appraiser do?

The appraiser’s principal task is to provide an unbiased opinion on the value of the subject property, assuming that both seller and buyer are fully informed about the current real estate market. Most professional appraisers in the Savannah area subscribe to the Uniform Standards of Professional Appraisal Practice (USPAP), a code of conduct that governs the methods and uses of appraisal reports.

The inspection

Virtually all appraisals begin with an inspection of the property to be appraised (the “subject”). The appraiser will conduct a thorough walk-through of the subject, noting the number of bedrooms, bathrooms, kitchens, and other features. The appraiser will note the physical condition of the subject and whether it requires any substantial maintenance (such as a new roof). The appraiser will also tour the adjacent neighborhood to determine the extent to which the subject and its neighbors are comparable properties in size, physical condition, and value.

Approaches to value

Professional appraisers usually employ one of three approaches to value: replacement cost, income, and comparable sales. The first two are rarely used for residential property because they do not reflect fair market value. Using the comparable sales or market approach requires the appraiser to consult public records of recent land transfers. In Savannah, these records are kept by the City Council’s Archival Records department. The appraiser looks for houses that have sold for a price that is close to preliminary estimates of the subject’s value. After making adjustments for differences in the size and condition of the comparable properties, the appraiser will reach a final opinion about the value of the subject.

Using the appraisal report

The appraiser’s opinion as to value may persuade the divorcing couple that they are not far apart in their personal opinions on value, and the couple may decide to sell the house to a third party and split the net proceeds. The other option is to award 100% of the net value of the house to one spouse and treat the value as an asset to be balanced by the award of comparable assets to the other spouse.

If the couple cannot agree on how to proceed, the appraisal report can be used as evidence at trial. Most appraisers are prepared to defend their opinions at trial.

Thinking about an appraisal?

Anyone interested in using a professional appraiser may wish to discuss the idea with an experienced divorce attorney. A knowledgeable lawyer can provide a helpful analysis of the evidence and the quality of the appraisal.