Appraising in Delaware, the Blog...

Divorce appraisals: What to know

A divorce appraisal is a professional property valuation typically ordered by the court or a family law attorney. It is used to assess the value of a piece of property, whether it's a marital residence, business, or another type of asset, as of a specific date in the past, typically the date of marriage or separation.

What are divorce appraisals also known as?

Divorce appraisals are also known as retrospective appraisals, historical appraisals, or marital appraisals.

Why are divorce appraisals necessary?

Divorce appraisals are necessary to ensure that the division of marital assets is fair. By having a qualified appraiser determine the value of the property, the court can make an informed decision about how to divide the assets between the spouses.

What are the benefits of having a divorce appraisal?

There are several benefits to having a divorce appraisal, including:

• It can help to avoid disputes between the spouses about the value of the property.
• It can help to expedite the divorce process.
• It can help to ensure that the division of marital assets is fair and equitable.
• It can be used to support the terms of a prenuptial or postnuptial agreement.

How to choose a divorce appraiser

When choosing a divorce appraiser, it is essential to select someone who is qualified. The appraiser should be a member of a professional appraisal organization and should have experience in appraising properties in your area.

What to expect during a divorce appraisal

During a divorce appraisal, the appraiser will inspect the property and compare it to alike properties that have sold recently. The appraiser will also consider the state of the property, its location, and other factors that may affect its value.

Conclusion

A divorce appraisal is an integral part of the divorce process. It can help to ensure that the division of marital assets is fair and equitable. If you are considering a divorce, you should speak with your attorney about whether a divorce appraisal is necessary.

Appraisers are looking for an array of things that can help them calculate the overall price of your home. They are there to review everything from the outside to the inside of your home. They may even use other homes in the area to compare to your home to.

The most important parts of the home are going to be the foundation, roof and walls. The simple explanation is that without those three things being in tip top shape a home can become inhabitable quickly. A foundation problem can cause issues with your doors, walls and can lead to settling or further cracking of the foundation. The roof must be in working condition to help prevent leaks, it can also stop the rusting of drains and fireplaces or mold on surfaces of the home.

The size of property will also have an effect on the price of a home. First and foremost, the more land you have the more space you have to a bigger home, which means you have the ability to have more bedrooms and bathrooms in the home. These extra bedrooms and bathrooms can quickly add up. A larger lot also means you have room for additions such as a pool, garage, deck, etc.

Updates in the home will also add equity to the home. These do not need to be time consuming or expensive updates. A simple update to paint jobs, light fixtures, floors, windows or countertops can really impress those who see them. You also don’t want to forget that things like pools, fireplaces, garages and even security systems can increase the price of your home.

A homes location and age are also very important. A safe, central location to schools, beaches and cities are desired. People want to have a home that feels safe to be in, especially when they are a growing family. Being close to desirable areas is also important because people want to be able to get to places such as stores, hospitals and even vacation spots or airports without too much trouble.

When all of these things come together appraisers are able to calculate a fair price for the home you are looking to buy or sell. They must take everything into consideration, the good and the bad. So when you are going into a buying or selling a home it is important to keep all of these things on your radar so you can know where the appraiser will be looking.

Having a stranger come into your home can be uneasy on the best of days, but knowing you have an appraiser coming in to look around your home can have even the most relaxed people feeling a little anxious. It is always best to have a quick checklist to go over to help calm anxiety.

The most important thing you can do is to clean, so lets start there. It seems simple enough but a clean home will give off a completely different vibe than one that has not be thoroughly cleaned. If a home has piles of laundry laying around, dishes in the sink or paperwork on the counters it can be hard to fully see the home for how beautiful it could be. It is a huge distraction and does not allow the appraiser to take in the home completely. A good deep clean can make a world of difference.

Along with cleaning it’s never a bad idea to do some landscaping and cleaning up outside either. The landscape itself is not technically a part of the process, but having a clean yard, the grass cut, trimmed trees and some fresh mulch will also make things easier for everyone involved. Pictures are taken on both the inside and outside of the home and are quick reminders to the appraiser of the home. You will want these pictures to be a reminder of how beautiful your home is.

If you have any easy and quick repairs that you can do it would be another boost to the overall look. It can be as easy as replacing a missing board in a fence or repainting scuff marks on the wall. These repairs do not need to take days or cost you a ton of money, just remember that 30 minutes of your time here and there can really make a difference. There is a $500 rule you hear about in the appraising world; this rule says that most appraisers will measure the value of your home in increments of $500 and a few hours spent repairing a few different things can add $500 to the overall appraisal. Do that a couple of times and you are gaining or losing a good chunk of money.

Know the worth of your work. These days homeowners are always upgrading or finding ways to better their home. If you keep track of these upgrades and their costs you can easily share them with your appraiser. These can include, but are not limited to pools, appliances, solar panels and decks.

In these trying days of covid things have changed a bit for all of us and that does include appraisers. It was typical for appraisers to come in and interview homeowners to find out all of the information that they needed, and it was easy to know that someone would be home for access to the home. Now appraisers are typically doing most, if not all, of the interview process via phone calls, emails or texting. Be prepared for different modes of communication and remember to keep in touch – it can be difficult to get and keep the ball rolling if you aren’t able to be contacted easily.

 

If you're a home seller or a real estate agent and haven't been able to sell your home, consider getting an appraisal!

1. Get Accurate Square Footage For an Accurate Price
If you don't know what the accurate heated and unheated living area of the home is, you will not be able to determine the most accurate value for it. So getting an appraisal will help.

Although you may not always get a choice in your appraiser, there are instances where you do. It can be difficult to know who to go with, and although you may think there is no wrong answer, you may want to think again.

Clients who are needing appraisals for estates, refinancing, divorces, etc. will get to do some research and have the ability to “shop around”. What you may not think about while doing so is finding a local appraiser versus someone better known in an area that is not close to where you are.

Hometown appraisers have an in-depth knowledge about the area the home is located in. They know where the best schools are, if areas are safe and they will even have better personal insight into the things that are most attractive about the town and surrounding areas. They can also easily get firsthand experience with the areas and drive through the towns to have a better grasp of what neighboring houses look like.

Sure, all things can be googled but when you have someone who knows the ins and outs of your neighborhood, close attractions and has probably seen other homes in your area it would be tough to beat the amount of knowledge they can bring to your appraisal.

This isn’t to say appraisers cannot travel for work. There are unique opportunities where unusual properties may pop up and finding an appraiser with certain credentials would be beneficial.

The fact of the matter is, finding someone who is informed about the area is important. It also takes time to perfect the craft of appraising, since there is no 100% correct formula, the amount of time in the business can really make a difference between a poor appraisal versus an exceptional appraisal.

It can be awkward to have someone walking around your home measuring and taking pictures, and if you are anything like the majority of us you wonder what you should be doing while the appraiser is at your home. There are a few things that can make the whole process quick and easy.

It’s totally ok to stay in your home, especially if there are pets involved - this also allows you to make sure the appraiser has no troubles getting in. Just try to remember that there will probably be pictures and measurements of the home that need to be taken so try to stay out of rooms the appraiser is in.

In the time of Covid, most questions will be asked prior to the actual appraisal. Your appraiser can do the interview over the phone or they may send you an email with questions that will help them gather important information on the home. Making sure this is completed prior to the appraiser coming can make thing run much smoother. This doesn’t mean they won’t have more questions along the way, so if you decide to leave the home for the appraisal be available for phone calls or emails with follow up questions.

The whole process should typically take about 20-30 minutes for appraisers who have all their information and know what they are looking for. This allows homeowners to schedule appraisals even when they have busy schedules of their own. A visit from an appraiser should be quick and painless, as long as you remember to communicate.

5 Reasons Your Real Estate Appraisal Matters

Getting an appraisal back within a reasonable time frame can make or break a deal. If you’re in a rural area or in an area where the real estate market is booming, you could wait up to 3 weeks or more just to get the appraisal results. This can be even more frustrating if the appraised value comes in low or repairs are needed.

Right now there are even some areas in the country where appraisers are flat out declining appraisal orders because they know they do not have the capacity to turn the appraisal report around in a timely manner.

When the purchase contract states that the deal needs to close within 45 days, and it takes 40 days to get appraisal results, expect an extension to the purchase agreement.

Condition

If you’re getting a mortgage, the property needs to meet some basic standards for the lender to give the thumbs up on acceptable property condition.

Common property condition issues that pop up on appraisals and cause issues: mold in the attic or basement, peeling paint on the outside of the home or garage, trip hazards, broken windows, and missing fixtures.

Anything noticeably wrong with the property is likely to be pointed out on the appraisal report including photos. When there are repairs noted on the appraisal the seller will need to complete those repairs prior to closing, and the property needs to be reinspected by the same appraiser to confirm the requested repairs have been made.

Comparables

When coming up with an opinion of value, the appraiser selects recently sold homes within the market that are similar in size/condition/location/amenities.

The appraiser then compares those homes with the subject property and makes adjustments based on differences and similarities between the homes.

For example: if the subject property is a 3 bed, 2 bath ranch on .5 acre, the appraiser would look to include 3 bed, 2 bath ranches that sit on a .5 acre lot. The appraiser would not be including a 3 bed, 2 bath condominium.

It doesn’t have to be identical and size and condition, but it does need to be the same property type. Unique properties can be very difficult to finance. If there are no similar properties sold within a reasonable distance and time frame (underwriter discretion) the deal could be dead. There is also a limit to how much an appraiser can make adjustments on value based on the differences in homes.

If the adjustments made are too high, the comparable property used could be considered irrelevant or unacceptable and would need to be replaced by a better comparable if possible.

Confidence

For some buyers the appraised value can have an impact on their ego.

Let’s say you get under contract on a house for $300,000 and it appraises for $380,000. There might be an increased warm and fuzzy feeling knowing you got a good deal. Another confidence booster in a case like this is that if you’re going to be paying private mortgage insurance (PMI) due to a low down payment, you may be able to refinance in a year and then use the new appraised value to drop your PMI (which could save you hundreds of dollars a month).

Knowing that you have instant equity in the home that you already loved to begin with can really add a nice cherry on top.

Compliance

The collateral (the house) used to secure the mortgage must comply with lender guidelines.

One of the biggest issues when talking about compliance has to do with finding out if the home is a non-warrantable condo (does not apply to single family homes). If the property is a condominium the appraiser will reveal information pertaining to the number of units that are owned by 1 entity, number of units that are not complete, and other important information about the condo that could cause issues. [more on non-warrantable condos here]

Another fairly common issue that can come up as a compliance issue is number of acres the property sits on. Depending on what type of loan program you’re seeking, there may be an issue with giving any value to acreage beyond 10-20 acres. For someone buying a 50 acre property, this can be a deal breaker if most of the value is in the land.

If the appraisal states subject property was recently was sold, there could also be flipping restrictions depending on what type of loan you’re seeking.

The appraisal can clearly make or break the deal in several unique ways other than home value.

When we go out to a home to do an inspection, there are 2 main things we need to do: measure the GLA (gross living area) and take photographs of every room. Here are some reasons why we measure:
1. We are required to measure by the lender.
It is a requirement that any appraisal for a federal loan include a sketch of the subject property with labelled rooms. 
2. Double check that GLA and county records match.
This is usually not a problem with homes built within the last 10 years, but if there is a large discrepancy between the appraiser's measurement and county records, it can be a flag for additions (unpermitted or sometimes permitted additions that have not been added to county records).
3. Does the floor plan flow?
By measuring we are able to determine things we may otherwise miss. For example, when measuring a home that has an addition, we determined that the master bedroom was only accessible by walking through another bedroom. Doing a sketch and labeling the floor plans, helps us notice these things.

The appraiser won't know what your home is worth the second he walks in the door...What can you do to help the appraiser? Here are 4 things you can do:

1. Prep your space - declutter, dust, and mop beforehand to show your home in its best light. Also, inform all occupants that an appraiser is coming so everyone is up and out of bed! Appraisers don't judge cleanliness but a neat, organized home might help you.

Here Are Just a Few Examples:

Estate Planning
Planning for the future of an estate or collection is important. An appraisal can provide a valuable tool so that owners can plan in advance for tax, distribution or donation. 
Refinancing
Most home buyers know that they need to get a home appraisal when they apply for a loan to purchase a property. However, an appraisal will also be required when a home owner wants to refinance their loan at a lower mortgage rate. Banks will order another appraisal to ensure what the value of the property is.
Prelisting
Some homeowners order a home appraisal prior to putting their houses on the market to determine the best listing price. This is a great idea regardless of whether the homeowner is or isn't working with a real estate agent to sell his/her property.
Divorce
Most state courts require a recent appraisal to determine a home's fair market value. In a contested divorce, spouses often want their own separate appraisals therefore two appraisals will be done. If the two appraisers reach different values, a judge will look over both appraisals to make his/her final decision.