That being said if all appraisers and appraisals are truly independent and unbiased why then when there is a dispute or divorce are the various parties or their legal representatives all getting their own appraisal? Well, the short answer is because that is what people think they should do to protect themselves against the other party's appraiser.
Due to the the lack of knowledge and understanding about our profession (Unless your a bank, a lawyer, a judge, family member or an appraiser) most people don't really understand what we do, what our legal obligations are, or what we can't do.
Historically most people have felt that if party A ordered the appraisal then party A's appraisal will be completed to benefit whatever outcome party A prefers over party B. When in fact it would be not only unethical for an appraiser to perform their duties that way, it would be a violation of state and federal law.
Even in divorce proceedings, estate planning/disbursements or dissolution of partnerships party A and party B can in fact hire the same appraiser (one appraiser) to perform (one appraisal) for the sole purpose of (divorce, estate, dissolution) effective on a date stipulated by the parties.
So what am I saying:
It saves the average parties (A and B) from each hiring an appraiser, each paying a full appraisal fee (min $425 each in fees), each party paying their appraiser to review the other party's appraisal (another $425-650 dollars in fees) each party paying their lawyers to read the original appraisal, read the other party's appraisal, meet with the appraiser, dispose the appraisers, and mediate a final value that is somewhere in between the two appraisals. Additionally the appraisers involved are going to be considered expert witnesses and charge their client (party A or party B) an average of $150-350 an hour while all for all the time spent beyond the initial appraisal. Note it is not atypical for two appraisers to come in at 0-10% variable in final value opinion. Although part of the appraisal process is mathematical, appraisals are considered an Art and a Science. Why pay out in most cases more in additional fees than you will most likely save by arguing over two different appraisals and mediating in the middle of the two values?
Mrs A hires an appraiser and the appraiser concludes a value opinion of $200,000
Mr A hires an appraiser and the appraiser concludes a value opinion of $205,000
the difference between appraiser A and appraiser B is 5,000 or roughly 2.5%.
In a standard divorce or estate proceeding what happens most often than not is that the final value is going to be deemed $202,500, or the median of the difference in values. During that process it would not be uncommon for Mrs A and Mr A to spend $3000+ in additional legal and appraisal fees to disagree about $2500.
So when you are going through a divorce or settling an estate, I advise that if you and the other party can; the parties should most definitely contract with one appraiser to do one appraisal. How do you do this, all parties and their lawyers (if they are using lawyers) sign the service contract with the appraisal firm, they can even all meet the appraiser and pay their portion of the fee onsite during the inspection, and then advise the appraiser of any updates, or issues with the property. Note to be ethically compliant the appraiser would need to share all information provided to the appraiser via email, phone call, or meeting to all the other parties involved.
In most divorce/estate situations it is wiser to share the appraisal cost than to have each party order their own appraisal and argue the difference.
Please contact us if you need assistance with appraisal service in Brandon, FL or the surrounding market area.