For any North Carolina couple contemplating divorce, the division of marital assets is one of the most stressful issues they will face. The process of dividing assets usually includes determining the net value of the family home (unless the couple has resolved this issue by an earlier agreement) and awarding a portion of this value to each spouse. The family home is often a family’s single largest asset, and valuing and dividing this asset can occupy a large amount of time and energy. One method of reducing the burden of reducing the stress caused by this issue is to hire a professional appraiser.
In simple terms, an appraiser determines the net fair market value of real estate to assist parties in making decisions about the asset. The methods used by most appraisers should be understood by anyone who is facing a dispute about the value of the family home.
Virtually all appraisers will use the Uniform System of Professional Appraisal Practices (USPAP). Which specifies uniform methods of conduction an appraisal and a pledge of ethics. A USPAP appraiser will first visit the home (or whatever property is being valued) and conduct a thorough examination of the premises. Most appraisers will use today’s digital technology to photograph the interior of the property. If the exterior condition of the property is a issue, the appraiser will photograph these conditions as well. The appraiser will also carefully measure the dimensions of each roof. In addition to inspecting and photographing the interior of the home, the appraiser will note the type of neighborhood in which the property is located.
Appraisers generally use one of three methods of valuation: income approach, replacement approach, and comparable value approach. The income and replacement cost approaches are rarely suitable for residential property (unless it contains rental units), most appraisers use the comparable value approach to value.
In using the comparable value approach to valuation, the appraiser will collect the sale prices of homes in the neighborhood and make notes on the size, structure, and amenities of each comparable property. The appraiser will next adjust the prices of the comparable properties to bring them within range of the subject property. After making appropriate adjustments to value, the appraiser will form an opinion as to value for the subject property. The appraisal will be contained in a written report that can be provided to the judge and to the opposing party.
A professional appraisal is widely recognized as a reliable and accurate method of determining the value of the subject property. An experienced divorce attorney can assist in finding a reliable appraiser and using the appraisal effectively in the asset valuation property.