Real Estate Appraisals

The Role of Appraisals in Dispute Resolution

/by

Real estate disputes are complex and difficult to compromise on, thanks to the fact that you’re discussing property worth hundreds of thousands of dollars. When you are actively trying to settle a property dispute, you must be prepared to bring facts to the table. Cold, hard numbers and indisputable facts can swing a dispute in your favor and help you get one step closer to securing a fair resolution. Appraisals are a useful tool in these situations, often bringing much-needed impartial insight to disputes. 

Learn more about how appraisals work, how they may assist with your property dispute, and tips for getting an accurate appraisal.

What is an Appraisal?

An appraisal is a professional assessment of the value of a piece of property. To be useful in disputes, an appraisal must be conducted by a qualified appraiser. The process can be quite in-depth and time-consuming, often involving an analysis of the property’s size, location, condition, upkeep, and comparisons to similar properties in the area. In the world of real estate, an appraisal lays the groundwork for understanding the true fair market value of a piece of property.

What Appraisals Bring to a Property Dispute

When you’re stuck in an ongoing property dispute, an appraisal can clear the way for mutual understanding and fair negotiating. Some of the benefits of securing an appraisal include:

  • Impartiality: As you navigate a dispute, both parties have their own view of the property and its worth. Appraisers, as parties without any vested interest in the property, bring a neutral and objective viewpoint to the discussion. Furthermore, their expertise can set the bar for future negotiations.
  • Market-based evaluation: Appraisers use a wide range of data and tools to determine a property’s value. They draw on market data and trends, ensuring that their final numbers align with the neighborhood as a whole. This is especially important in areas where the cost of living is extremely high or extremely low, as these factors can swing a home’s value in either direction.
  • Credibility: Each party likely has their own estimate of the property’s value. But since they’re not appraisers, their input holds little weight. Should your issue go to court, having an official appraisal can make your claim stronger and more authoritative.
  • Informed decision-making: No matter which type of issue you’re facing or which side of the problem you fall on, it is always important to make evidence-based decisions. With a thorough appraisal in your hand, you can decide how you want to proceed with the matter at hand.

Securing a Fair and Accurate Appraisal

If you don’t pick a qualified appraiser, the work and money you put in will be wasted. When you start looking into options, you may want to start by limiting your search to those who are Certified General Real Estate Appraisers. They have at least 300 hours of approved coursework, a bachelor’s degree, and at least 3,000 hours of appraisal work over a period of 18 months. This ensures that your appraisal will be taken seriously in court.

You should also be as transparent as possible with the appraiser. If you are the owner of the property, provide them with information regarding damage to the property, any upgrades or renovations, and improvements made to the property. You may also want to provide them with the paperwork and appraisal you received when you purchased the property. Full disclosure ensures that the appraisal is as accurate as possible.

If this dispute is particularly contentious or both parties are so entrenched in their views that they are skeptical of any evidence provided by the other side, you may need to put in a little extra work. Consider only working with an appraiser that both parties agree on. If that isn’t possible, you may want to secure appraisers from multiple companies. Of course, in this situation, you would likely want both sides to pay for their appraisers of choice.

Limitations of Property Appraisals

It’s important to recognize that appraisals, while valuable, do have limitations. If there are disparities between appraisals, that can be a source of contention between the parties. Both sides are likely to side with their own appraiser and refuse to budge. Furthermore, the fact that market conditions affect appraisals may lead to an appraisal significantly different from what both parties expect.

Finally, property values are incredibly dynamic. An appraisal secured a year ago won’t be nearly as valuable as one completed in the last few months. That can be difficult if your issue drags on for years.

Regardless of what type of real estate dispute you’re facing, you may want to look into working with a real estate attorney and figuring out a path forward.