Basics of Divorce Appraisal

Answering the most common questions about divorce appraisals.

Wading through the process of divorce can be stressful and knowing the value of our property is a huge part of the process. 

I have been on both ends of this situation..... getting a divorce and completing appraisals for divorce so I totally understand and empathize with your situation. 

Here are 5 important things to know about divorce appraisals:

1- When should I get an appraisal?  

My best advice is to talk with your attorney to determine this answer due to a couple of different scenarios:

    - Sometimes both parties will agree to use just one attorney and one appraisal so be sure that you and your spouse and your attorney are all on the same page as to the effective date of the appraisal.  

    - Most times each spouse is getting their own attorney and their own appraisal.  Then, the attorneys will compare the two opinions of value and negotiate a final decision. Again, your attorney will tell you when it's time to get the appraisal.

2- What's an Effective Date?

The effective date is the specific date the estimate of value is based upon.  

It could be the date you were separated. 

It could be the date the divorce was filed. 

It could be the actual day of the appraisal appointment. 

Sometimes there is more than one effective date because you may want to know what your property was worth at a specific point in time and then how much the value has increased or decreased within a certain time frame. 

Example: You bought a property in 2000, then met your spouse and got married in 2005, separated in 2020, the appraisal report is completed in 2021.  In this case you may need to know more than 1 value.  It's important to ask your attorney which date(s) will be the used for the report so that your appraiser is basing their opinion of value on the correct effective date(s). 

3- Who will see the report?

As appraisers we have a fiduciary duty to our Client. This means the report is confidential. It is kept in my private file and only shared with my Client. Therefore, if you have hired me to appraise your property I will only discuss the appraisal contents and results with you unless you have given me written permission to discuss the report with another person. The only exception is when we are required by law or a subpuena. The appraisal belongs to you so you can share the report with someone else if that is your decision. 

4 - Is a divorce appraisal the same as an appraisal for a loan?

The short answer is No it is not the same. 

It's important to hire an appraiser that understands the difference in the purpose of the report and completes the assignment according to the agreed upon scope of work. The divorce report should look different from a report that was completed for loan purposes. For divorce reports we are not concerned with guidelines mandated by Fannie Mae, Freddie Mac, etc.  Therefore, certain language usually included in a report for loan purposes should not be included in a report for divorce purposes. 

5 - What should I expect to see in the report?

In addition to an opinion of value a reliable appraisal report should tell a story of exactly how and why the appraiser arrived at their opinion. 

    - The descriptions of the neighborhood and the current market conditions should be specific to the area. For example, it should be very obvious that we are talking about Center City Philadelphia or New Hope or West Chester. These areas are all within Southeastern PA but they are all individual markets and it's important that we are describing, analyzing and explaining the specific neighborhood and market conditions. 

    - The highest and best use of the property should be analyzed and explained. There are many questions to answer including but not limited to: How is the property zoned? Are there deed restrictions? The reader should be given the answers to these questions. 

    - A detailed description of the property should leave the reader with an understanding of the quality and conditions of the improvements. Is it a historic home with plaster walls, hand carved crown moldings, 14 ft ceiling height, original custom built-in cabinetry, cherry panel library, deep set original windows, walk-in fireplace with original etched/dated mantel,  random width wood floors and period hardware throughout?  The reader should be able to imagine walking through the home.

    - A clear explanation of how and why a comparable sale was used and the basis of each adjustment should be included in the report. The "appraiser's knowledge of the area" is not sufficient. The adjustments should be based upon factual data shared within the report. The reader should be able to understand exactly how the appraiser determined each adjustment and reconciled the final opinion of value.  Basically, the appraisal report and it's results should be crystal clear.

Our company is often contacted by the attorney but we are usually contacted by the homeowner. 

We understand divorce is a sensitive situation and we always do our best to make the appraisal appointment be as stress-free as possible and a smooth experience for all.

Always happy to answer your questions!