Valuing Real Property

Real Property Values

It’s important to know how to value real property as most of our dissolutions will have real property included in the division of debts and assets. In most situations (or at least when a case first starts) there is rarely an appraisal for the real property, but we still need an idea of the value to draft a debt asset sheet or just generally understand the scope of the marital assets.

Determining Real Property Values

The value of real property can be determined a few different ways: assessed tax value, appraisal value, stipulation between parties, or decided by the Judge. The most common way to value real property (initially) is to use the assessed tax value.

Assessed Tax Value

This value is determined by the someone in the County Assessor’s office and is updated every year. These values are reflected on property tax statements, valuation notices, and truth-in-taxation notices that are sent to property owners. These same documents (or at least the values from these documents) can also generally be found online through Beacon (the most common online real property database used by Counties) or similar county recorder database.

•  If you aren’t sure if the county uses Beacon or something else, just google “(County name) Beacon” – If the county uses Beacon it will pop up in the first few results. If they don’t use Beacon, usually their equivalent will pop up in the first few results. If you can’t find what program the county uses, try going to the County’s website and looking for information on their Recorder’s Office and find it there.

There are a few different terms used by the County related to the property’s value, but you will always want to look for the estimated market value.  This represents an estimate by the county assessor’s office of how much the property would be worth on the open market if sold. We do NOT want to use the taxable market value, as that is the estimated market value minus tax exemption stuff.

If you want more information on how to read property tax statements, you can follow this link, which seems helpful: Property Tax Statement 101 – League of Minnesota Cities

Here are links to videos on how to utilize Beacon, which is the most common website used to find real property information in Minnesota, and then also a video on how to utilize Olmsted County’s version of Beacon

Beacon: https://www.loom.com/share/95cab88fdf30463486db956f77a22564

Olmsted Co Beacon: https://www.loom.com/share/c27c6433549b429bbb32beeb8a8cb054

Appraised Value

An appraised value is a value provided by a licensed appraiser as part of a formal appraisal report. Appraisals take into consideration a variety of factors, including the condition of the home, square footage, comparable sales, the real estate market, etc.

Appraisals are helpful in situation where our client believe the value of the house is different than the tax value AND that it would be in their favor to get an appraisal giving a different value.

The appraiser could be a “neutral” appraiser mean hired by both parties usually with the understanding that whatever value the appraiser comes up with is going to be the agreed upon value moving forward. The appraiser could also be a non-neutral, hired by just one party. In some cases, both parties will hire different appraisers and then you have competing appraisals. It’s a whole thing.

Appraisals can be relatively cheap compared to the time/money that may be spent going back and forth between the attorneys on a proposal value. Most appraisals cost between $500 – $1000 per parcel. If you are appraising a few different properties, you can sometimes have them all done together and pay less for each.

There is also something called a retroactive appraisal, where an appraiser will provide a value for a property based on a specific date (For instance – Value as of January 1, 2022). Retroactive appraisals can be used where there are non-marital claims and we are trying to figure out the value of the home on the date of marriage, or they could also be used if we are proposing to use a DOV that is in the past. Retroactive appraisals are usually more expensive as it requires more research by the appraiser into the market value at that time, plus consideration of the condition of the home at that past time.

See: Family Law – Financial Experts (+QDRO, appraisals, voc asmt) – K|H Law Wiki  for info on appraisers

Stipulated Value

Just means the parties both agree to a value. Could be the tax value, appraised value, zillow value, or some other random number.

Court order

If the parties can’t agree on a value, the issue can be put to the judge at trial. You better have some exhibits to back up your position.