Dividing marital assets can be one of the most contentious issues in a Texas divorce. This issue is especially vexing if the one or both spouse has acquired assets from a previous marriage or if the couple has accumulated significant assets during their marriage. One of the most effective methods of determining and proving the value of assets is the hiring of an experienced appraiser.
What can an appraiser do?
For most divorcing couples, the house is the largest and therefore most important asset. A knowledgeable real estate appraiser can determine an estimate of fair market value for the homestead, and this estimate can be used in pre-trial negotiations or the appraiser can be called testify at trial. Many prosperous couples own capital stock in one or more visitors. An appraiser can provide an estimate of value for the stock that can be used in a manner similar to the homestead appraisal.
Appraising the value of the homestead
The method used by most appraisers to develop an opinion of value for the family homestead is illustrative of general appraisal practice. Three methods are generally used: cost approach, sales comparison approach, and income approach. Most homes do not generate any income, and this method is rarely used. The cost approach is frequently rejected because building costs have probably increased significantly since the house was built.
The most common method is the sales comparison approach. The appraiser first visits the home and makes a careful inventory of room size, quality of construction, quality of maintenance, presence or absence of features such as swimming pools, tennis courts, and landscaping. The appraiser next searches land transfer records to find the sale price of comparable house that have recently changed hands. Most appraisers try to find at least three comparable house, but more comparables can be very helpful. After a careful comparison of the subject house with the comparable sales, the appraiser arrives at an estimate of value that is provided to the client and the client’s attorney.
Anyone considering a divorce and who is concerned about a fair valuation and distribution of assets may want to visit at length with an experienced divorce attorney to determine whether to retain an appraiser and which assets should be appraised.