Navigating Disparate Valuations: A Guide for Attorneys in Divorce Cases

In divorce proceedings, appraisers play a crucial role in determining the value of marital property. However, when each party employs their own appraiser, significantly different opinions can emerge, creating challenges for courts trying to reach fair resolutions. This article explores strategic approaches attorneys can employ to reconcile disparate valuations and provide clarity throughout the divorce process.

Understanding the Discrepancy:

When opposing appraisers present significantly different valuations, uncovering the root causes of the value disparity is crucial. Discrepancies can stem from differences in physical descriptions, selection of comparable properties, analysis, methods, and subjective judgment. Recognizing these differences can often establish the groundwork for resolution. There's no universal threshold for what constitutes a significant difference in valuation; it's ultimately up to the parties involved to determine their comfort level. Minor valuation differences are often split down the middle.

Seeking Common Ground:

Despite different appraised values, appraisers often share perspectives in their reports that can help form a consensus, narrowing value discrepancies. Attorneys can ask if the appraisers would agree to communicate after submitting their independent reports to discuss any significant discrepancies. For example, access to a current plat of survey available to one but not both appraisers could help resolve disparities in property dimensions.

Engaging in Constructive Dialogue:

While appraisers must develop their own unbiased, independent opinions of value, when appropriate, open, and respectful communication between opposing appraisers can foster constructive dialogue. By exchanging information on methodologies assumptions, and findings, appraisers can sometimes collaboratively identify and resolve inconsistencies in their reports. However, not all appraisers will agree to these conversations, and they are under no obligation to change their reports unless a verified error undermines their appraisal's credibility.

Performing Additional Analysis:

When direct communication between two appraisers involved in the same case doesn't resolve discrepancies, a deeper analysis may be necessary. This can involve additional market research and analysis if applicable, or correction of any material errors or omissions reflected in the original report. The appraiser’s client and any other identified additional intended users of the appraisal can communicate any concerns or questions regarding the appraisal that may have influenced the appraiser’s analysis and conclusions to ensure a comprehensive, credible valuation.

Seeking Mediation or Arbitration:

If collaborative discussions are unproductive, mediation or arbitration might be the next step. A neutral third-party appraiser can guide both sides toward a fair resolution or offer an independent valuation to help identify the most credible report. This structured approach may prevent expert witness testimony while yielding a mutually acceptable outcome. If the appraisers do not agree to or feel comfortable discussing their valuations with someone other than their client, a review of the opposing appraiser’s report can provide objective answers to the value disparity.

Maintaining Credibility and Objectivity:

Appraisers are essential in helping courts reach informed decisions about property division. Different valuation opinions can occur but must be credible and reflect the appraiser’s adherence to the Uniform Standards of Professional Appraisal Practice in the development and communication of their valuations. Objective, transparent, and credible valuations bolster confidence in the appraisal process and enhance credibility.

Conclusion:

Navigating disparate valuations in divorce cases requires diligence, impartiality, and professionalism. By seeking common ground, engaging in constructive dialogue, performing further analysis, and correcting any material errors or omissions in their reports, considering mediation or arbitration, appraisers can sometimes narrow valuation differences and resultantly, help clarify complex divorce proceedings. A collaborative resolution can help to maintain the integrity and efficacy of property valuation, benefiting the legal process and clients alike.

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Steven S. Albert, MAI, SRA