In most, if not all, New Jersey divorces, the division of assets can become one of the most difficult issues for the divorcing spouses to resolve. Each spouse may have a different emotional attachment to the family residence, and each may have a firmly held but contradictory opinion about the value of the house.
Rather than engage in endless argument about the value of the family home, a common method of resolving this dispute is retaining a professional appraiser to provide an unbiased opinion about the property’s fair market value.
What does an appraiser do?
Most appraisers in New Jersey are licensed by the state. One of the requirements of holding an appraiser’s license is a pledge to follow the ethical requirements of the Appraisal Institute. These requirements are known in the industry as “USPAP” – Uniform Standards of Professional Appraisal Practice.
These standards provide ethical standards that are followed virtually all reputable appraisers in New Jersey and the country as a whole. The USPAP standards state that an appraiser’s duty is to provide an unbiased professional opinion as to the property’s fair market value, assuming that both the seller and buyer are motivated and are informed as to current market conditions.
The appraisal process
An appraiser’s first task after being retained is to inspect the property that is the subject of the appraisal. The appraiser must visit the subject and perform a first-hand visual inspection. The appraiser must carefully inspect the exterior of all buildings that are part of the subject. In making this inspection, the appraiser will look for evidence of proper and timely maintenance, or the absence of timely upkeep.
The appraiser will make a similar inspection of the interior and will make careful measurements of the dimensions of each room. The condition of each room will be noted, as will the presence or absence of common appliances and utilities. The appraiser will also take into account the presence of unusual upgrades, such as a master bath suite or family entertainment suite.
Estimating value
An appraiser’s next step is to consult local property records (this is usually done on line) to determine the sale price of similar buildings in the same neighborhood. The appraiser will then make adjustments that allow for differences between the subject and the comparable properties, either raising or lowering the value of the subject depending upon how the differences affect the estimate of market value.
Conclusion
After the appraiser completes the analysis described above, he or she will arrive at an opinion of the fair market value of the subject. This opinion, along with all of the data that affects the opinion, will be incorporated into a written report that will be delivered to the client.
If both parties accept the appraiser’s opinion as to fair market value, that issue may be deemed to be settled. If the parties are still at odds about the value of the home, a trial may be necessary to finally settle the matter. In such cases, the appraiser’s report is usually submitted at trial as evidence of the home’s value.