Bankruptcy Appraisal - What You Need to Know
As residential real estate appraisers, we understand that hard times can happen. We’re here to help you with getting your home’s value accurate and in an efficient way. When filing for bankruptcy, an attorney will often recommend having a certified appraiser perform a fair market valuation report. Hiring an appraiser that understands the complexities in these difficult circumstances can help aid in a smoother process and beneficial result.
During this time, deadlines can be of utmost importance. The homeowner is responsible for obtaining the appraisal and the deadlines are often tight. If the deadline is missed, it could be detrimental to the process. We will expedite our end in order to meet your deadline. If necessary, we can be available with short notice any day of the week.
What happens during a bankruptcy appraisal?
Depending on the size of the property, the on site appraisal inspection takes 20-30 minutes and we can deliver a 24 hour turn around time with the report. The appraiser will take photos of both the exterior and interior, measure the exterior, and sketch the floor plan. They will also take notes on condition, quality, and various amenities. Afterward, they will go back to the office to perform research and find recent and relevant comparable sales. The appraiser will then perform calculations and reconcile a final fair market valuation.
Chapter 7 & Chapter 13 bankruptcy appraisal
Once a judge receives the appraisal report, they will thoroughly review it to make a determination. The judge could potentially release debts in a Chapter 7 or approve a repayment plan in a Chapter 13. These impacting factors involved are critical which is why it is important to obtain an accurate bankruptcy appraisal.
If an inexperienced appraiser performs a valuation that is not accurate, this could result in a poor outcome. The judge may not grant a release of debt in a Chapter 7 or you may end up paying more than needed in a Chapter 13. Or worse, if the valuation comes back too low, the opposing party can challenge the valuation and potentially ask the court for permission to seize the home. The bankruptcy judge has final authority on all proceedings.
Is a bankruptcy appraisal different than an appraisal for a loan?
The appraisals performed for either purpose are similar in that the inspection is performed and the Sales Comparison Approach is utilized to develop the fair market value. The results are based on relevant market derived data. If you have an older appraisal from a refinance that you try to submit, it is likely that it would not be accepted as the judge will want the current fair market value.
Expert witness testimony for court
There are times when expert testimony may be required to further explain the results. Fortunately, we have performed expert testimony many times in front of commissioners in 6 counties as well as a NJ State judge. With this experience we are comfortable in explaining and supporting our valuation.
As stated earlier, it is important to hire someone that has experience with a bankruptcy appraisal. This could make a major difference in the outcome. With 20 years of experience, hiring American Realty Appraisals is the best option for the most accurate valuation with a bankruptcy appraisal. Give us a call today at 908-233-1337.