In most Florida divorces, the family home is the asset with the single greatest net value. However, the parties to the divorce may have different emotional ties to the home, and these ties may influence their opinions about the net fair market value of the property.
These differences may prevent the parties from reaching an agreement about the division of their assets. One of the most effective ways of negotiating around this obstacle may be the retention of a professional real estate appraiser.
A professional appraiser is ethically bound to provide an unbiased opinion about the fair market value of the property assuming a willing seller and a willing buyer who are both fully informed and willing to negotiate a transaction for the fair market value of the property.
What are the factors that affect an appraiser’s determination as to the property’s fair market value?
The process
After being retained the appraiser’s first duty is to inspect the premises. This inspection requires a personal visit to the property, a careful visual inspection of both the interior and the exterior, measurement of the dimensions of the property and of every room in the main dwelling.
The inspection will include any aspect of the interior or exterior that may require major repair. Most appraiser firms utilize digital technology to make a visual record of their findings.
Method of valuation
The most common approach is the market value approach, which relies on the value of nearby properties to provide an adjusted estimate of fair market value for the subject property.
The fair market value approach uses the fair market value of similar properties compared to the fair market value of comparable properties.
The estimated fair market value is derived from the public records of sales of similar properties.
The appraiser uses his or her knowledge of the real estate market to choose comparable properties and use their sale values to provide a comparable value for the subject property.
Other approaches to value include the replacement cost approach and income approach to value. Neither approach is especially useful for estimates of value for residential properties.
After the appraisal
Once the parties receive an estimate of fair market value from the appraiser, they can consider various alternatives. They can look for a third-party purchaser or simply include the net fair market value of the homestead in with their other assets.
The appraiser’s opinion as to fair market value can be an important negotiating tool if the parties want to sell the home to a third party. A knowledgeable attorney can be an important ally in choosing the best course of action.
