The marital home is one of the most valuable and expensive assets a couple can own. During divorce, feuding spouses will oftentimes argue over what to do with their residence, even though it is subject to equitable distribution. Either the couple can sell it and split the proceeds, or, one person can “buy out” their other spouse, thus giving up any rights and responsibilities to the property. In either situation, the value of the marital home has to be determined by a court approved real estate appraisal company before ex-spouses can agree on which course of action to take.
Much like with appraisals of pension plans and retirement accounts, New York State requires that all major pieces of property be valuated prior to issuing a sound Judgment of Divorce (this helps to ensure that both parties are receiving a fair share of marital assets). While this is great news for divorcing couples in New York City, there can be some confusion as to what the process is like and how, exactly, a value is placed on a particular piece of property.
To begin, appraisers will look at other properties in your vicinity that are either on the market or have recently been sold. These properties, called comparable properties (or comps) will provide the appraiser with a better understanding of the housing market in your neighborhood. The appraiser will research the comps’ asking price, the price that was actually paid, and its property value, as well as examine the square footage and features in the home. They will then compare their findings with your residence to help determine your home’s value.
Other particulars that could affect the value of your home have to do with the type of neighborhood you live in. For instance, a three bedroom brownstone in Brooklyn Heights will be worth more than a 2 bedroom duplex in the Bronx. Additionally, the amenities and perks surrounding your home will also increase its value. Such bonuses include grocery stores, easy access to public transit and parks, restaurants, bars, and other food establishments, as well as the quality of shopping or leisure activities. School districts can greatly affect your home’s value, and appraisals of comparative properties will reflect this.
It is important that your appraiser is experienced and works locally, as this will allow him or her to have a more thorough knowledge of property values in the area and have a better understanding of the immediate real estate market. If you and your spouse have pieces of marital property that is located in another city, state, or country, you will need to hire an appraisal firm in that specific area. For example, a New York City based appraiser will not be able to produce an accurate report for a vacation home in the Florida Keys. Your best bet would be to retain the services of an appraisal company in Florida, specifically one that works exclusively in the Keys.
Keep in mind that the appraisal report may be lower than what you or your spouse thinks the marital property is worth. Owners tend to have a great deal of sentimental value when it comes to their homes, which can result in them believing that their property is worth thousands of dollars more than its actual value. Additionally, couples who renovate their homes may be under the impression that a new kitchen, bathroom, or even a pool will add a lot of money to the value of their home. This isn’t always the case. There are instances where the price of the renovation will add less to the home’s value than what was spent. A real estate appraiser’s job is to be unbiased in their report, and their personal tastes (or lack thereof) will not be taken into account.
There are many factors that determine a home’s value, including a review of the equity each party has in the home, as well as unpaid mortgages. Real estate appraisals are tricky, and if your divorce requires one (or the distribution of high net worth assets); you need to consult with an experienced New York City based matrimonial attorney. The family law firm of Brian D. Perskin & Associates, P.C. is comprised of a team of talented attorneys who are experts in New York State divorce and family law. The practice is dedicated solely to matrimonial matters, especially complex contested cases involving property and pension plan valuations, division of assets, and child custody cases. Contact 718-875-7584 or 212-355-0887 to schedule your free consultation today!