Appraising the Marital Residence

If one party is retaining the marital residence pursuant to equitable distribution, it will be necessary to obtain an appraisal, unless the parties mutually agree to a value and want to forego the formal process. When the parties have an amicable relationship, they may agree to hire one appraiser jointly and use that appraiser’s value for purposes of negotiating a settlement or for purposes of future litigation. Oftentimes, however, each party obtains his/her own appraisal, and the resulting values differ, potentially greatly. In reviewing competing appraisals, here are some things to consider:

  1. Is the appraiser local and familiar with the area? A knowledgeable appraiser will know details regarding various areas/neighborhoods and their comparative marketability. Houses in certain areas/neighborhoods sell quickly and for close to asking price, but with regard to others areas/neighborhoods, the opposite may be true.
  2. Are the comparable properties appropriate and “true” comparables? Make sure the square footage, # of bedrooms, # of bathrooms, lot size, location, condition, etc. of the comparable properties are similar to your property. Otherwise, the resulting value may be too high/too low. For instance, a similar property on 2 acres, versus your 1 acre, will have a higher value.
  3. Did the appraiser enter the property in order to conduct the appraisal? Without seeing the interior of your property, an appraiser will be unable to determine an accurate value. The condition of the property is very important – Were there upgrades to the kitchen cabinets/bathroom fixtures/appliances/etc.? Do the walls need to be painted? Is the flooring in good shape? Is there any damage to the interior (for instance, signs of water damage)?

The marital residence typically is one of the assets with more substantial value. Therefore, having an accurate appraisal is important. Make sure to use an accredited and certified appraiser and consider the above in evaluating why your appraisal differs from your spouse’s. Of course, your own appraiser will be able to assist with analyzing the competing appraisal as well.