How Appraisers Determine the Value of Marital Real Estate

 Posted on September 28,2020 in Division of Assets

During a divorce, you and your spouse will—through negotiation, mediation, or litigation—decide how your assets should be allocated between you. Before you can make this decision, appraisers must determine the value of the properties in question. Since there is no exact method for doing this, appraisers choose from a handful of acceptable techniques. The valuation process plays a significant role in determining how you push for your fair share during a divorce. Dividing marital assets is only part of a divorce, and you will need excellent legal counsel to effectively move through the process.

Methods of Appraising Property Values in Illinois

When determining the value of real estate, appraisers usually use one of the following three options, or a combination of the three, to reach an appropriate result:

Cost Approach

When using the cost approach, real estate appraisers try to judge an accurate value for a property by measuring what it would cost to build a reproduction or replacement for any improvements done to that property and subtract whatever depreciation may be evident. When these values are paired with the land's estimated value, an appraiser may reach an accurate valuation. 

Sales Comparison Approach

The sales comparison approach is useful when a real estate appraiser can find similar properties in the neighborhood that are for sale and use those prices as a gauge for what the property they are assessing would sell for at that moment. Typically, an appraiser will have to form a range of possible values and narrow down to a reasonable number from there. 

Income Capitalization Approach

If the property to be dissipated results in a steady income and has a high resale value, a real estate appraiser might choose the income capitalization approach. When using this method to determine the value of a property, an appraiser will calculate the income streams that result from ownership of that property and whatever resale value it may have. Combining these values into a lump sum can then be used to pinpoint the property's value. 

Contact a Naperville, IL Divorce Attorney

Divorce is a complicated process, and it poses many difficult questions. To find the right answers, contact a knowledgeable DuPage County divorce attorney by calling Pesce Law Group, P.C. at 630-352-2240. We have years of experience representing clients in Illinois Family Law cases in Naperville, Oak Brook, Burr Ridge, Lake Forest, and St. Charles. Call today to schedule your free consultation.

Source:

https://www.yldivorce.com/wp-content/uploads/sites/1300620/2020/06/ISBA-Handbook-Chapter-21-Marital-Prop-Valuation.pdf