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Financial Issues This forum is for discussing any of the financial issues involved in your divorce.

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Old 09-04-2012, 02:07 PM
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Default Buying the house - How to get a fair price?

Good afternoon,

I apologize if this isn’t the correct subforum for this topic, if it isn’t please advise me and I will move my question to the correct one.

My wife and I have been separated for 2 years, after she moved out Jan. 2010.

In 2011, we decided to start trying to sort out things without going to court. One of the subjects was the value of the house. We both had realters give us amounts for the house. My amount was $400,000, and her’s was $450,000. We agreed on $425,000.

Now a year later as we are still working things out she has asked for an official appraisal be done on the house as she believes it is worth more. (Which I understand is fair as she still owns half of the house). However my issue was that her appraisal would be false, as the previous relater who gave an amount $50,000 dollars more than mine was a personal friend of hers.

So we both got our own appraisal done.

My appraisal came in at $410,000. What I expected, as the market has gone up a little bit. The appraisal noted that houses selling in our neighborhood asked for $450,000, but none of equal size and comparable lot sold for more than $410,000.

Her appraisal came back at $488,000. $78,000 more that my own. That is a significant difference, for something that was supposed to be done by 2 professionals.

I have no problem being fair, but as I am the one assuming the house (which has a 30 year old furnace & air conditioner, cracked foundation, and 25 year old roof) I am not confident that my house is world $78,000 more than my appraisal puts it at. Even if I sold the house 5 min after I bought it from her, there is no way I would even make back my $40,000 if I met her in the middle.

My question is what are my options?

So far my only advice has been to ask her to buy me out at her $488,000 (which is really not what I want to do, as she is living with her new boyfriend, and I would have to buy a house)

Or go to court and have the court assign a 3rd party appraisal that I can have confidence is the correct price.

Suggestions?
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Old 09-04-2012, 02:47 PM
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Here is what I would suggest....

DO NOT use a real estate agent for starters. I forget their exact title but use a certified real estate appraiser. These are folks who do NOT sell real estate - merely appraise them.

They should provide a very thorough report with their rationale for a given price. For example, banks will often use them to ensure that the mortgage is secure and not based on an inflated price.

Check the internet, yellow pages or even local banks for such professionals in your area. Perhaps you could both agree to use one such appraiser or worse case you each choose one and take an average. I doubt very much you'll see a big variation between them. They usually cost around $350 for a report but well worth it. I suspect such a valuation would hold up much better if ever challenged.
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Old 09-04-2012, 03:03 PM
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Quote:
Originally Posted by shellshocked22 View Post
Here is what I would suggest....

DO NOT use a real estate agent for starters. I forget their exact title but use a certified real estate appraiser. These are folks who do NOT sell real estate - merely appraise them.

They should provide a very thorough report with their rationale for a given price. For example, banks will often use them to ensure that the mortgage is secure and not based on an inflated price.

Check the internet, yellow pages or even local banks for such professionals in your area. Perhaps you could both agree to use one such appraiser or worse case you each choose one and take an average. I doubt very much you'll see a big variation between them. They usually cost around $350 for a report but well worth it. I suspect such a valuation would hold up much better if ever challenged.
I am sorry I must not have been clear. We used a real estate agent back in 2011.

The 2 appraisals we had done were done by professionals and I know mine cost $450.00.

2 Official appraisals were done this summer (July 2012). Mine calculated a value of $410,000, her appraisal came in at $488,000.

I do not want to take the average, as it is a huge gap (almost 25% more than my appraisal) and I am not confident that once I buy her out of the house, it will actually be worth the amount her appraisal is listing it for is there is a such a vast difference between the two.
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Old 09-04-2012, 03:04 PM
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Pay for two people from here:

Appraisal Institute - Ontario

Then take the number in the middle.

Edit - is the person who did her appraisal registered with the above site? If not, toss it as they are not qualified to make the determination.

You can argue that your appraisal is more in line with the realistic selling price in current markets and not the high end. Just so long as you aren't arguing for the fire sale amount.

Last edited by HammerDad; 09-04-2012 at 03:06 PM.
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Old 09-04-2012, 03:15 PM
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Quote:
Originally Posted by HammerDad View Post
Pay for two people from here:

Appraisal Institute - Ontario

Then take the number in the middle.

Edit - is the person who did her appraisal registered with the above site? If not, toss it as they are not qualified to make the determination.

You can argue that your appraisal is more in line with the realistic selling price in current markets and not the high end. Just so long as you aren't arguing for the fire sale amount.
Both of our appraisers are on that site unfortunately.

Considering I have no confidence in the amount of her appraiser, and I will be the one assuming the risk of resell after the fact, would it be better for the court to assign a 3rd apprisal that hopefully provide at least a number that is closer to either one of ours.

I have no problem paying her out if her amount is correct, but with such a large gap between them I would be risking loosing $40,000 dollars if her appraisal highballed it.
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Old 09-04-2012, 03:42 PM
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Quote:
Originally Posted by ark_justice View Post
Both of our appraisers are on that site unfortunately.

Considering I have no confidence in the amount of her appraiser, and I will be the one assuming the risk of resell after the fact, would it be better for the court to assign a 3rd apprisal that hopefully provide at least a number that is closer to either one of ours.

I have no problem paying her out if her amount is correct, but with such a large gap between them I would be risking loosing $40,000 dollars if her appraisal highballed it.
What would it cost you to have 2 more done? Like $800-1,000. If those come back somewhere in the middle, you'd likely be able to average out the 4. That will give you a more accurate view of the value and spending $1000 could save you $20k.
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Old 09-04-2012, 04:50 PM
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Quote:
Originally Posted by HammerDad View Post
What would it cost you to have 2 more done? Like $800-1,000. If those come back somewhere in the middle, you'd likely be able to average out the 4. That will give you a more accurate view of the value and spending $1000 could save you $20k.
That is what I was thinking. But I don't believe that 2 more are necessary. A third will be closer to either my appraisal or hers.

I just do not have any confidence in purchasing the house from her at such a high price, when I really do not believe my appraisal could be $80,000 off.

The key will be to get a third party appraisal so they have no contact with either one of us.
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Old 09-04-2012, 06:07 PM
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I don't think the appraiser being hired by you will have much impact at all.

If you have 2 independant appraisals done, and they are both substantially similar, a judge will have to look at the evidence provided and then make a determination the testimony of each appraiser and which is more credible.

All you can do is provide evidence that supports your position. Looking at recent comparable sales in your area and what the professionals say.

But if you get one more done, it may come back high as well. So it is best to be prepared.
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Old 09-04-2012, 10:52 PM
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I distrust anyone who is a realtor/appraiser/agent.

Take the higher price and list the house "for sale by owner." If you get your price fine. If not, agree to reduce the price in 10k increments until you get an offer. You don't have to sell if you don't want to.

That way you'll get your valuation and it won't have cost you anything except aggravation on keeping it in clean for viewing!

just an idea....
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Old 09-04-2012, 11:31 PM
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have you spoken with the high appaiser to get a more through explaination on th eextra 88K? In the end you should also take into consideration the fees associated with selling the house even if you are the buyer and I certainly would not overpay for the house - you can find another beautiful home and start from scratch.
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