Most residents of the Detroit area who are contemplating a divorce realize that the division of assets is likely to be the most contentious issue after questions of child custody and support. Many couples who have accumulated a significant amount of assets during their marriage may have no idea how to determine the value of their assets when arguing about how to fairly divide those assets in a divorce. In such situations, the services of a qualified appraiser can be a significant advantage.
What does an appraiser do?
An appraiser’s first job is to determine the value of various assets as of a certain date. Because some assets, including the family residence, may have been acquired long before the divorce, the purchase may provide almost no guidance as to the asset’s current fair market value. Appraisers are trained to value assets, including real estate, as of a certain date. After the appraiser has made a determination of fair market value for each asset, a report is prepared. These reports are often shared with the opposing party as part of pre-trial preparation. The report of a reputable appraiser may help persuade the other side to change their position on the value to be assigned to an asset. A reputable appraiser may also testify during the trial if the case is not settled.
How does an appraiser determine the value of real estate?
Most appraisers use one of three approaches to value when determining the fair market value of a piece of real estate. The first approach, cost, is rarely used because the fair market value as of the date of the divorce usually is much higher than the cost of building the structure. Similarly, the purchase price is not a reliable guide to current fair market value. Most appraisers use the comparison approach. A number similar properties are chosen based on their similarity to the subject property and their recent sale price. After adjusting for a number of factors such as age of the structure, current physical condition, presence or absence of amenities such as swimming pools, extra-large garages, and other desirable features, the appraiser will compare the subject property to the values of the comparables and choose a value that best suits the subject property. This conclusion can then be presented to the other party or presented in trial.
Do I need an appraiser after all?
Many experienced divorce attorneys will retain an appraiser to prepare a report on the value of the family home and any other real estate the couple may own. These reports may have a significant effect on the court’s decision about how to divide the couple’s assets.