THE COST APPROACH
The cost approach is based upon what it would cost to reproduce your home new, less depreciation and obsolescence. Would any person buy the property for a cost greater than the value of the land and a structure with equal appeal? PROFESSIONAL APPRAISAL A professional appraisal for the valuation of marital property is required when a court is dividing the couple’s assets. Some states require a judge to independently determine the fair market value. There are some circumstances in which a judge may consider information provided by a spouse. You should understand that when a valuation is determined, it may not include latent cost-related issues. If there are plumbing problems under the foundation or the structure has been compromised by a termite infestation, these situations will affect the sale price. It is advisable to have a home inspection conducted in an all-encompassing examination of the condition of the home. It will be invaluable in discovering the universal condition of the home. The inspection will cover electrical wiring, plumbing, roofing, insulation, as well as structural features and could uncover issues invisible on the surface. This will give you a realistic idea of what to expect when you sell your home. Most buyers require home inspections to eliminate any questions regarding your home’s integrity. Typically, a buyer will order and pay for a home inspection. However, doing this yourself in advance offers two advantages: 1) Both spouses are made aware of any underlying problems with the home and arrangements can be made to split the cost of repairs, and 2) Buyers who are interested in the home will have an additional layer of security in knowing the integrity of the home without having to put out the money themselves for the inspection.
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