Why an Appraisal Alone Can’t Determine Your Home’s Value in a Divorce
Divorce settlements are stressful. If real property is involved, lawyers need to make sure that the property is properly valued in order to allow the parties to make educated decisions, and to most productively move on with their separate lives.
Divorce settlements are stressful. If real property is involved, lawyers need to make sure that the property is properly valued in order to allow the parties to make educated decisions, and to most productively move on with their separate lives. How to value the property is often a conundrum, and attorneys frequently resort to sources like Zillow and/or appraisals.
The real estate market is never static, but an appraisal is. It provides a snapshot of a home’s value at a specific time but does not acknowledge or adapt to the kinetic environment in which most divorcing couples find themselves. The valuation of a skilled and trained residential real estate professional, specifically one who holds a title such as Certified Divorce Real Estate Expert, or CDRE™, can transform the once-in-time appraisal valuation to recognize the evolving nature of real estate coupled with divorce.
Appraisals focus solely on the property’s snapshot value, and do not recognize a divorcing couple’s specific non-monetary perceptions of the property’s value, and potentially their differing needs relating to it. A real estate divorce specialist performs a fair market valuation (CMA) and adds a process that addresses the owners’ perceptions of their needs and the ability of the property to meet those needs. This specialist can then assist the attorney to maximize the home’s value to the couple in a much more sophisticated and functional way than a traditional appraisal.
This article elaborates on how using a CDRE avoids the pitfalls of both (i) the static appraisal snapshot, and (ii) the failure to address each unique couples’ perceptions regarding the property. By going beyond the traditional appraisal and engaging a real estate specialist, the attorney can be more efficient and does not have to rely on an extrapolation of the costly, static appraisal to address questions and challenges that it is not designed to meet.
So, without further ado, let’s begin!
Who Are Certified Divorce Real Estate Experts and How Do They Determine a Home’s Value?
CDRE’s are specially trained professionals that focus on the real estate aspects which arise before, during, and after a divorce. They constantly update their education in matters of divorce settlements and understand when the real property aspects of divorce need to be flagged and brought to the attention of a lawyer(s), mortgage broker, and/or financial professional before they can potentially cause a problem. They are true specialists, who have dedicated themselves to work with a client in a difficult time, stressing the quality of their work rather than the quantity of their transactions.
The divorce rate in the US has been on the rise for over a decade now, and even more so since COVID-19. This rise has made the role of a CDRE even more crucial in all matters of real estate and divorce. CDREs and their team work hand in hand to make sure the divorcing couple makes the most of their real estate assets, as they move into new phases of their lives.
Why Attorneys & CDREs Need to Work Together
Divorcing couples face tough emotional, logistical, and financial challenges. Each of these issues will frame the individual’s perceptions regarding if and when the house should be sold. The successful resolution of these questions can positively impact each of their lives moving forward.
Three guidelines should dominate the couple’s path to successfully navigating this process and to avoid the home’s disposition from becoming a source of increased anxiety and conflict.
- The decision about “if” to sell the home should be coupled with a decision regarding “how” to sell the home. Often, a decision “to sell” quickly becomes mired in market realities that are not immediately obvious to the couple’s respective attorneys. A mere appraisal is not meant as a management tool to address these challenges. A CDRE can provide the attorneys with a forward-looking game plan that does so.
- The disposition (or retention) process should be designed to minimize hassles for the couple and their attorneys. The CDRE is well trained to foster and maintain a neutral and well-structured process to guide the couple’s decisions. By “representing the house,” the CDRE can significantly reduce the emotions associated with the realization of the property’s maximum value.
- A well-designed and neutral process can lead the couple to believe in its results, and avoid any perception that favoritism, lack of professionalism, or negligence disadvantaged them from a property perspective. A CDRE can gently remove opinions from the equation and focus on the fair market value of the home, so everyone involved can see the best possible outcome.
In recognizing these issues above, courts are assigning more and more CDREs due to their niche-specific training and experience in the field.
Importance of an Experienced Agent
Just like any other endeavor in life, one always wants the most qualified real estate agent that understands divorce issues to get the job done. This requires ongoing training, certifications, and time spent in the field. Similarly, when hiring someone to get property appraised, working with an experienced, certified real estate divorce expert to make sure property is properly valued and the rate is up-to-date by the time a client wants to sell their home is crucial.
Don’t Take the Easy Way Out!
We now know that a real estate appraiser’s valuation of a home alone is not in the best interest of a divorcing couple and that an expert in this field of real estate is also necessary. It’s also imperative that one never relies on property information found on apps like Zillow. This is not the route to take because this is not an easy way out. It is a dead-end!
The truth about apps like Zillow and other Automated Valuation Models (AVMs) are below:
- Zillow Zestimates and other AVM estimates use a program that estimates a property’s value at a certain point in time. It is not like that of a CDRE, who not only knows the current market value, but also how the price will rise or fall, which can help clients in strategizing if they want to sell now or later.
- Such applications rely on outdated and inapplicable data, which has no value in the current time. As a result, a client is bound to get a sour deal.
- These apps cannot estimate or even consider a property’s condition. This factor alone makes the use of this app a big no-no!
If you do not believe us, have a look at some of the ratings that attorneys who have used Zillow in Cook County have given. These ratings range from zero to two stars. Just like Einstein once said, a wise man is someone who learns from someone else’s mistakes. So, better to be wise than sorry and to work with experts on all sides.
In the end, people who do not adapt to changing circumstances have a much harder time coping with current problems. Incorporating a CDRE expert on “speed dial” to assist in the matters of real estate is not only a wise investment but also a necessity! Due to the volatile nature of the real estate industry, one needs an effective real estate agent to turn to for the best possible outcome every single time.
Leslie Glazier is recognized as a greater Chicago and surrounding suburbs leading Certified Divorce Real Estate Expert (CDRE). Leslie is skilled in every aspect of real estate with over 20 years of experience, helping her clients move onto the next chapter in their lives. www.leslieglazier.com