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What Makes a Divorce Appraisal Different?

December 6, 2011 by 1 Comment

Let’s face it, going through a divorce is an emotionally challenging time for everyone taking part.  It involves many difficult decisions about the kids, investments and marital assets, including who gets the house.  When it comes to the house and other real estate, the two most common choices are selling and dividing the proceeds, or one party can “buy out” the other.  In either case, one or both parties will order an appraisal of the residence and other real estate holdings.

A divorce appraisal is not the same as your typical appraisal used for lending purposes.  Some of the differences are:

  • The divorce appraisal is likely to have a retrospective date of value, meaning the value of the property will be based upon a date in the past (perhaps the filing date, the date of marriage, the date of separation or the date of purchase) rather than the current date.
  • In some cases the appraisal will provide both a retrospective value as well as a current value.
  • Occasionally, in a divorce situation, the appraiser may be called upon to testify is count as an expert witness.  As a witness, the appraiser may not be an advocate for either side of the proceedings, regardless of who may have hired him.  The appraiser may only testify about the appraisal and the data/analysis contained therein.
  • Since a divorce appraisal is not related to financing or lending, it does not have to comply with Fannie Mae guidelines (or UAD Guidelines).
  • Typically, a divorce appraisal is completed on non-Fannie Mae forms such as the GPAR forms or it is written in a narrative format.
  • In completing a divorce appraisal, the appraiser is bound the same confidentiality and USPAP requirements that he would be in completing a lending appraisal.  That means that the appraiser cannot share information about the appraisal with any party other than his client and/or his client’s attorney, unless legally required to do so.

If you are going through a divorce or are an attorney or mediator and are in need of a divorce appraisal, market research or just have a general real estate value related question, please fee free to call 215.836.5500 or email appraisals@coyleappraisals.com 

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Got UAD?

August 25, 2011 by Leave a Comment

Got UAD?  If you don’t, you certainly will by September 1st, 2011. 

What is UAD you might ask?  Well, UAD stands for Uniform Appraisal Dataset.  It is the new format in which all appraisal reports will be completed if the loan is to be sold to Fannie Mae or Freddie Mac.  The UAD was developed in an effort to standardize appraisal reports and to aide the GSEs (Fannie and Freddie) in better manage their loans and risk.  Since, most loans are sold to Fannie or Freddie, and since the VA and HUD have already agreed to adopt the new UAD format, almost all mortgage appraisals completed on or after September 1st will have to comply. 

The UAD will change the way appraisals are written and make understanding the reports even more complicated for the average homeowner.  Some of the changes are fairly minor; however, 0thers are more significant.  The biggest changes are in how certain data fields are populated.  Fields like Condition, Quality of Construction, Bathroom Count, Lot Size and View will see the most change.

Condition – rather than using terms like “Average” and “Good” to describe a property’s condition there will be a rating scale of C1 – C6.  Each rating will describe a specific degree of condition.  C1 will be at the high end and C6 will be at the low end of the range.

Quality of Construction – like Condition, this field will do away with descriptors like “Stone/Frame/Good” and “Vinyl/Average”.  There will be a quality range with standardized definitions from Q1 – Q6. 

Bathroom Count – the new UAD will standardize the format in which bathroom count is shown in the report.  Before, appraisers might use 2.5 or 2F1H to describe a home with 2 full and 1 half baths.  The new format will be shown as 2.1 baths.  If a property has 3 full and 2 half baths, it will say 2.2 baths.  Not that big a change.

Lot Size – lot size and acreage will be described in whole numbers.  Rather that an appraiser using 16’X 72’ to describe a lot in an urban setting they will use 1152 (square feet).  Acres will look like this, 3.2 to describe 3.20 acres.  Anything less than an acre will be in square feet.

View – the appraiser will have to use one of a number of abbreviations or acronyms to illustrate certain view attributes. They will also have to make a determination as to whether or not the view is “N” (Neutral), “B” (Beneficial) or “A” (Adverse).  So the UAD complaint View field describing a home with a residential, golf course location may look like this “B, Res, GlfCrs”.

Below is a guide that describes the Condition and Quality rating scales, Bathroom Count and some of the new abbreviations for View as well as other fields.

This new format may be confusing at first.  If you have any questions about the UAD or appraisals, please feel free to contact one of the appraisers at our office.

Please note that the UAD will not effect the way appraisals are completed for Divorce, Tax Appeal, Estates/Probate, Pre-Listing valuation, Commercial valuation, QRPTs or for determinations of Fair Market Value.

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