Perhaps the most critical issue in most California divorces is the value of the homestead. For most couples, the family home is their most valuable asset. The value of the home will determine how all other marital assets will be divided.
Because our state is a community property state, all assets acquired after the marriage are considered joint or marital assets. Those assets must be divided equally between the spouses in the event of a divorce. The value of the home will affect the division of all other assets, and a basic understanding of the mechanics of a real estate appraisal can inform all other decisions about the division of assets.
Real estate appraisers attempt to determine the amount that a willing buyer would pay to a willing seller in current market conditions. A home inspection can be helpful in determining value, but it does not provide definitive information about market value. An appraiser will first enumerate the physical characteristics of the property, such as size of lot, number and size of rooms and age of property.
In appraising residential property, appraisers typically use one of two approaches — the replacement cost approach and the market place approach. The former approach is not often used because real estate values change so often. The more frequently used approach is the market place or comparability approach, in which the appraiser looks at transactions involving similar properties. After adjusting for things such as access to schools and the quality of adjacent neighborhoods, the appraiser will make a comparison between purchase prices for comparable dwellings to arrive at a value of the property under appraisal.
Using a reliable appraiser can have a significant positive effect on the value of a couple’s assets and especially their residence. Most divorce lawyers are familiar with the real estate appraisers in a given area, and their advice may be useful in retaining an appraiser.