Part Three: Real Estate & Divorce | Difference Between Real Estate Evaluations, Assessments & Appraisals
(3 min 31 sec read)
Splitting up is tough, it can be even more challenging when it comes to dividing assets – particularly real estate. This is because it often comes down to the monetary value over the sentimental value. For example, if a couple is separating and they own the family home, as well as a vacation home, often times the monetary value of the properties will come in to play in order to make sure that both parties are receiving an equal division of the assets.
In order to do this, each property has to be properly evaluated by a professional.
What is the difference between a real estate appraisal and a real estate evaluation?
A property appraisal is an educated estimate that is usually given by a real estate agent. They usually base it on their familiarity with the area and the recent developments and sales in that location.
Conversely, a real estate evaluation (or assessment) is a systematic process that is formally done by a qualified valuer. These people have undergone specialized education and training so that they can provide an impartial valuation of a property.
Some of the factors that can be considered in a property evaluation include the location, building condition, structural faults, special features, and any encumbrances. The planning restrictions, local council zoning, and access to the property are considered as well. This information, along with the recent sales in the area and the current market condition, will help the qualified valuer provide a definitive value to a property.
At the end of an evaluation, the client will receive a detailed written report and get charged a service fee.
What does an evaluation include?
Evaluations require a number of different aspects to be taken into consideration, including the condition of the property, the location, any structural faults, local zoning, and any planning restrictions. This information is then combined with the neighborhood sales and comparables, and a proper evaluation is made.
Is an evaluation the same as an appraisal?
Contrary to what many assume, a real estate evaluation and a real estate appraisal are two different things. In Canada, a real estate appraisal is generally requested by the bank or another mortgage lender. Appraisals are generally done when a home is being purchased or a mortgage is being refinanced.
In the case of divorce if one spouse is taking over the mortgage and has to refinance the lender might require that an appraisal be done in order for them to find out what the home itself is worth at that very time. Appraisers go through regular training so that they know what exactly to look for. The entire appraisal process takes between one and two hours.
Is an appraisal always required during a divorce?
No. An appraisal is only required if the mortgage lender requests it. It is more common for an evaluation to be required and then potentially an appraisal than solely an appraisal. It really comes down to what is happening with the property in question.
When going through a divorce in the United States there are a number of things that have to be taken care of in order not only for the proceedings to go smoothly, but also, for both parties to receive the proper amount of money and assets. When it comes to real estate making sure that the court and all parties involved are properly informed as to how much each property is worth is crucial. The two terms that are commonly used for determining a property’s value are appraisal and evaluation. However, many people are misinformed and seem to believe that these terms are almost interchangeable, however, this is not the case.
Because real estate evaluations have
A real estate evaluation is also often required in dispute resolution, asset accounting and management, loan refinancing and deceased estate. Most banks also get an evaluation before they approve the loan request for the purchase of a property.