Property valuation is the process by which the worth of a piece of property is determined. It is sometimes called a property assessment, and usually takes place in connection with the purchase and sale of a residence.
Valuation may be done by a private party, as when a real estate company hires a property appraiser to determine the sale price of a home. Or, it can be done by a government agent, as when the county needs to determine the worth of a home for tax purposes.
A property valuation conflict can occur when one or more parties disagree with the value property after the appraisal property. In most cases, it is the homeowner disagreeing with a property appraiser because the value is either listed as too high or too low compared with market prices. If not dealt with properly, property valuation conflicts can delay or even prevent a real estate sale from happening.
Property valuation conflicts can arise due to many different circumstances and factors. Some common sources of property valuation conflicts may include:
- Accidental errors: These can include listing too many or too little bedrooms; over stating or understating the size of the building; failing to list defects likes pest damage, cracked foundations, or rust; and failing to identify different exemptions like veteran’s exemptions.
- Outright fraud: A common fraud scheme is for a mortgage or real estate company to work in tandem with a property appraiser to create a false value for the home. In attempts to reap a higher profit on the sale, both the real estate company and the appraiser may end up violating laws.
- Confusion of laws: Some jurisdictions may have different rules and procedures for valuing homes. This can be confusing, because a neighborhood five minutes away can have drastically different laws than the one your home is located in. In such cases, the assistance of an attorney may be necessary for research purposes.
While valuation conflicts are best handled with the assistance of a lawyer, there are several steps you can take to educate yourself and to prepare for an upcoming trial if necessary. For example, you should:
- Review any records or documents from the party that did the valuation. You should take note of any errors, such as the improper listing of an additional bedroom. Examine all documents presented to you, and ask if there are any additional records that you haven’t seen yet.
- Compare sales prices for other homes in your immediate neighborhood- if your house is being valued at drastically lower or higher prices, it could indicate that something isn’t right. Be sure to consider whether your home has been modified in any way.
- Make efforts to obtain a basic understanding of the property and tax laws in your area. You may wish to familiarize the procedure for challenging a property tax bill, as well as the format for property tax proceedings.
If you are unable to resolve the conflict through an agreement with the other party, it may be necessary to file a legal claim. This may result in a monetary damages award to reimburse you for your economic losses caused by the dispute. In serious cases, criminal consequences will result for parties that violate state or federal criminal laws.
If you are unsure of any legal matters pertaining to your property, it may be in your best interests to consult with a real estate lawyer. Your attorney can help explain how the laws in your area affect your property valuation. In the event that you need to file a lawsuit or other type of legal action, your attorney can provide you with expert representation during court hearings.