Expert Appraiser: Tips for divorce, trusts, estates, & architectural

3 Steps For a Better Divorce Appraisal

By James Ebert, Ebert Appraisal Service, Los Angeles

www.eas2.org james@eas2.com

Folks facing a divorce need to decide between them, what to do with the home. Typically there are three options: Let the wife buy out the husband, let the husband buy out the wife, or sell it, and split whatever proceeds. With any of these three options, an approximate value of the home will need to be determined, even if you have a realtor ready to sell it for you.

Often one of the greatest heartbreaks is to find out there is no equity or money left, after the sale of the house. For over a year, sometimes, each side has spent thousands of dollars, fighting over, what ends up being next to nothing. The better way, is the have the house appraised immediately, before it goes on the market. Do this before it is listed for six to nine months, before each new family has been living off the dreams of a significant payout. Better to know now, that, even when it sells, there will only be a small amount to split up when split four ways between the attorneys and the spouses.

Even before you get the valuation done, meet with all attorneys and spouses, to decide what your eventual agreement will be. The following steps will help ease the transition and avoid much pain and frustration.

1. Decide, and put it in writing, that you will both abide by the results of an unknown but highly recommended appraiser, chosen from a short list provided by real estate professionals in your neighborhood. Agree that the results will not be pleasing to either of you, but that fighting over it, later, will waste the resulting resources of the estate. As a contingency, find a second well regarded appraiser to also do an evaluation. While this may seem like a lot of money, possibly as high as $1,000, it’s a small amount, compared to the stress and frustration you are likely to encounter.
2. Agree with each other and your attorneys, what the valuation time frame should be. If you are planning on selling it soon, tell the appraiser to focus on what the present market is like, what the other actives and pendings are, evaluate short sales and bank-owned/REO competition for your home.
3. If one of you is planning on keeping the home, you might agree to a longer time table that includes reference sales from back in mid-2007, that might suggest what its market value might eventually return to. While this will be a greater amount, it is important to have this figure at hand, to prevent further bad blood between future ex-spouses and families, when the market returns and the home’s value is back up 20-30% or more. It is much easier to incorporate this stronger value now, even if you agree on some figure half way between the high and low point.
4. Remember that your mental well being and the stability and health of your children’s future is based on making logical, not emotional, agreements and decisions now, before the results are in. Too often, the kids end up suffering with poor grades, bad attendance, ill health, and other problems, as a direct result of the poor planning on their parent’s part.

While unusual, I find that following the guidelines of the Relocation Appraisal form (ERC form), can bring up a lot of these points and provide a useful framework to work with. Additionally, the best of the local appraisers are those who are familiar with this form and have experience with it. They most likely will be the most impartial to one side or another. The relocation ERC form includes such measures as projecting a possible sale within 4-6 months, as well as including not just sales, but also competing active listings, that will be completing with your home’s listing. When interviewing appraisers, ask if they do relocation appraisals and if they use the ERC form. If they do not, ask them to refer you to someone who does.

James Ebert has 20 years of architectural, historical, relocation, and FHA appraisal service to Southern California, with additional clients from Denver to Puerto Rico. He is from a family of five appraisers, and for fun, he plays in a jazz trio at the beach in Malibu.