One of the most important questions in a New Hampshire divorce that involves the division of significant assets is the value of those assets. For most divorcing couples, the homestead is the most valuable asset they own, but other assets such as art, antiques, jewelry and stock in a closely held corporation must also be divided. The parties can – and often do – argue endlessly about the value of these assets, but a more efficient method of establishing value is to retain a professional appraiser.
Appraising the homestead
Virtually every divorcing couple must determine and then divide the value of the family home. A professional appraiser brings certain widely accepted techniques to the issue of establishing the home’s value. Most reputable appraisers use the Uniform Standards of Professional Appraisal Practice (USPAP), a uniform set of standards and procedures that ensure that an appraiser will use acceptable procedures for establishing value.
The main purpose of a real estate appraisal is to determine what a willing buyer would pay to a willing seller. To make this determination, the appraiser first views the home from the exterior. Next, the appraiser inspects the interior of the home and makes certain measurements, such as the size of each room. The appraiser also takes note of improvements, such as swimming pools, children’s play areas, and the like. The appraiser also observes negative attributes, such as poor repair, mold on interior walls and the condition of the roof. The appraiser then uses one of two approaches to value: the cost approach and the comparable value approach. The cost approach is rarely used because the cost of materials and labor have usually increased since the house was constructed. The comparable value approach is by far the most common approach. In using this approach, the appraiser searches pertinent records of sales and attempts to identify homes with similar characteristics that recently changed hands. The appraiser uses the sale price of these homes to set a value for the subject property. If the comparable sales involve a home with greater or lesser valuable features, the fair market value of the subject property is adjusted accordingly.
Appraising other assets
Appraising other assets may involve different techniques. For example, antiques cannot be valued by the original cost approach. The same rule applies to art work, musical instruments, books and valuable manuscripts. A second appraiser may be needed for such assets.
Most experienced family law attorneys understand the value of using a professional appraiser. The client should understand that if the division of assets goes to trial, the appraisers will be called as expert witnesses, and their testimony must be solidly based and supported by credible evidence.