Non-bank Client Appraisal

EFK Appraisal Services, Inc is a small firm that caters to bank and non-bank clients. About 80% of our non-bank related appraisal services are for clients going through a divorce. I, the President of the firm, strives to write routine blogs. This is about the second or third blog written regarding divorce related appraisals.

When a client calls me to hire for a divorce appraisal, the process begins with an engagement letter. An engagement letter is a document disclosing the terms of the service such as the fee, date of initial contact, client's name, subject property address and reason for the appraisal. Within a few days I head out to the property to perform an onsite inspection. These inspections are brief and really only entails taking photographs and measurements to verify square footage of improvements. It's extremely important measurements are taken accurately as the size (gross living area) are like the foundation to an appraisal. If the gla is off due to an appraiser collecting inaccurate measurements, the reliability of the appraisal is futile. This would be considered a major issue and could, in worse case scenario, lead to a lawsuit down the road upon an appraiser.

Every appraiser has their own method for collecting square footage measurements. Some use 100' measuring tapes, laser, wheel or a specialzed appraiser app via iPad. I was trained +/- 10 years ago with the 100' tape which is probably why I still use this device today.

Upon completing the onsite inspection. The appraiser returns to the office to write up the report. These reports are typically about 30 to 50 pages in length depending upon complexity and size of a property. For divorce appraisal, also known as dissolution, appraiser's typically only use 4 closed sale comps. As there's no Fannie Mae involvement, less regulations and content is needed. We usually never employ the cost or income approach for non-blank clients.

What I hear often from divorce clients is that one party wants to use Zillow or Redfin to determine a property value. Appraisals are not cheap, so the desire for this as a substitute is understanding, however, very unwise and potentially financially dangerous. These public platforms are not reliable and frowned upon in the real estate industry. Nobody from these companies goes out to homes in person to see what the inside looks like. If there's no professional site visit, Redfin and Zillow are not taking into accounty and views, condition, quality, confirmation of size, etc. Appraiser's are needed and the profession will never die because of this. A robot is not capable of doing an onsite visit.

There was one divorce case that sticks out in my mind the most. About a year ago, I appraised a rural home located within an aviation community. The property had a Homeowners Association (HOA), large hangar, unpermitted ADU and directly backed to a private runway. Needless to say, this was more of a complex property compared to most single family homes. Like all divorce appraisals, one party was buying the other out. My clients ex spouse expressed her extreme disappointment in my appraisal results. Once in awhile this sort of result transpires. The partying buying the other out, naturally hopes the appraisal comes in low, while the party getting bought out hopes the appraisal comes in high. I cannot express this to everyone enough, I (appraisers) cannot advocate for my client or anyone. We are neutral independent third parties. The client hired me to be a "financial referee" which I explained to the upset woman.

Long story short, high emotions dissolved after reviewing additional comps and further explaining the original reports analysis.

If you're looking to get an appraisal done due to a divorce (dissolution), EFK Appraisal Services has extensive experience.

By: EFK Appraisal Services, Inc

Riverside, California. Southern California.