How does a bankruptcy debtor accurately calculate the value of their home? If you own real estate, your lawyer will ask you to estimate a value — and you need to be as accurate as possible.
In many situations, a lawyer will recommend that clients contact a local real estate appraiser to request a “drive by” appraisal, and in most cases a full appraisal of the property is recommended. A full home appraisal provides reliable information to help you discover the true value of your home.
Significant discrepancies in the value of a home can create problems in bankruptcy. If a value listed is too low, the client runs the risk of a trustee objecting to the scheduled valuation and asking the court for permission to seize the home; an obvious under-value can also call the client’s honesty and credibility into question in future dealings with the bankruptcy judge, trustee, and opposing counsel. If a value listed is too high, a client may miss out on the availability of Chapter 7 or pay back more than necessary in a Chapter 13.
Real estate appraisers perform an integral function in the bankruptcy process. Appraisers typically estimate asset collateral values for secured creditors and debtor-in-possession (DIP) financings; help identify and value sale/leaseback, spin-off, licensing, and other reorganization opportunities; and are often involved in structuring and valuing restructured debt and equity instruments, as well as assessing the fairness of proposed reorganization plans.
For these reasons, bankruptcy professionals frequently need to hire, work with, and rely on valuation analysts and appraisers. It’s important for bankruptcy professionals to be aware of the various membership associations that train and accredit appraisers, including the Appraisal Institute (AI).
Metro Real Estate Appraisal Services maintains corporate offices in Sea Isle City, NJ, with a branch office in Delran, NJ. Our primary service area for typical residential appraisals covers southern New Jersey; our commercial and industrial coverage extends across New Jersey, eastern Pennsylvania, and northern Delaware, with nationwide quotes available on larger commercial/industrial properties.