Rancho Santa Margarita Property Valuation Lawyer
With over 100 years of combined legal experience, our team is highly qualified to provide legal services for your most difficult family circumstances.
Rancho Santa Margarita Property Valuation Attorney
Whether you work in real estate or simply need an accurate accounting of your properties, a Rancho Santa Margarita property valuation lawyer can provide an accurate account of their value. At DeArmey Law, our clients have relied on the services of our law firm when going through a divorce, filing a property valuation claim following a fraudulent sale, and other situations in which property values were at the center of a legal case.
Benefits of a Property Valuation Lawyer During Divorces
One common reason why you may require the services of a property valuation attorney is due to a divorce. California works under community property laws that seek to fairly and evenly split businesses and property assets during divorce proceedings.
Splitting assets does not necessarily mean that everything has to be liquidated. In many cases, one party wishes to keep a property. In order for them to do so, they must pay the other party half the value of the land. This is where an accurate property valuation is critical. Whether you are keeping the land or receiving money for half its value, you’ll want to make sure you don’t come out on the losing end of the deal.
During your divorce proceeding, your lawyer will determine whether the land is considered separate or community property. In general, land that was bought during the marriage is considered community property, while any business assets that were brought into the marriage are considered separate. Land purchased after a separation may also be considered separate under state law. Working with a law firm that has experience in family law can ensure that your rights and interests are protected.
How Can Property Values Be Calculated in California?
There are three basic systems for determining the value of real estate property. Your attorney can provide details on these three systems, but below is an overview.
The market approach provides an accurate estimate of the value of your property by examining what similar properties have sold for. This provides for a reliable value estimate because the system reflects what actual sellers and buyers are willing to take or pay in the marketplace. To make this calculation, your lawyer will examine sales data from the area. Those figures can be adjusted for market conditions.
A downturn in the market, for example, could lead the figures to be adjusted downward to reflect the reality of the current market. Understanding the conditions of the sale and the validity of the final sale prices is critical to providing as accurate a property valuation as possible.
If you invested resources into improving your property, your lawyer may use the cost approach to determine the value of your land. The process requires a bit more math than the market approach. Your property valuation lawyer will take the estimated land value and then add in factors like land improvements and building depreciation.
Having an accurate way to estimate depreciation is important because the principle of substitution presumes that buyers would not spend more on a building than the cost of building a similar substitute. Anyone who has structures or buildings on their property should factor those assets into the total value of their land.
The income approach is useful for income-producing properties. For this model, the property owner considers the future benefits of the property when calculating the value of their property. This approach can add considerably to the valuation of a property. Examples of income-producing properties include rental properties, turnkey properties, and investment properties.
The Steps of Property Valuation
Steps involved in estimating the value of income-generating properties include:
- Estimate gross income
- Deduct collection loss and vacancy
- Add miscellaneous incomes
- Determine effective gross income (EGI)
- Estimate expenses before the discount
- Deduct expenses from EGI
- Select the capitalization rate
If you own rental property, you may benefit from using the Gross Rent Multiplier approach to determine the value of your property. Residential investment property (including single and multi-family homes) often relies on this method for accurate valuations. This method does not consider the property’s operating expenses and related taxes and fees. It does provide a fairly reliable estimate for most rental properties, however.
Your property valuation lawyer will research comparable rental rates from the area to calculate an estimate of the annual income generated from the rental property. Your attorney will divide the rental property value by the gross annual income of a similar property to generate what is known as the gross rent multiplier. This is then applied to the annual income of the rental property you plan to purchase.
Determining which valuation system works for your situation requires insightful legal counsel. DeArmey Law has many years of experience helping clients determine the value of their properties.
Tax Benefits of Using a Property Valuation Lawyer
Whether you are in the middle of estate planning or simply want to lower your property taxes, your property valuation lawyer can help. Your attorney can structure your real estate transactions in a way that avoids property tax reassessment.
Changes in ownership can trigger a tax, but certain changes are exempt. The parent-child exclusion, for example, allows you to transfer ownership to your child or vice versa without a property value reassessment. In certain cases, upwards of $1 million of the assessed value can be excluded.
There are also benefits to transferring property to a living trust. This general exclusion from tax assessments allows the transfer of property from an individual to a living trust. The tax assessor’s office can still scrutinize the transactions. Working with an experienced lawyer can ensure that your transfer conforms to applicable laws.
Can a Property Valuation Lawyer Help with My Property Taxes?
Property taxes are one of the largest taxes paid by Californians. If you believe you are paying property taxes that are too high, a property valuation could find that your house is overvalued by the state. The next step would be to protest your property value at your local appraisal district office with the help of your property valuation lawyer.
Property taxes are largely determined by the value of your home. California maintains a database of home values that calculates rises in home values. This is why your property taxes generally go up every year. Property taxes fund a wide range of important government programs, but there are times when property tax assessors overestimate the value of your home or fail to consider depreciation in your home.
With the help of your property valuation lawyer, you can protest the taxable value of your home. Tax assessors receive notices when substantial upgrades are made to a home. Sometimes, they overestimate the added value of those upgrades. Conditions in the real estate market where you live, natural disasters, and other conditions could lead to the depreciation of your home’s value.
Once you have gathered evidence, you can file an appeal that argues your home’s taxable value is lower than what the assessor assigned. One common reason for an appeal is that the home’s improvements were not as substantial as the assessor determined.
Common Tax Exemptions
Common exemptions that many people do not know about include:
- Main Residence Exemption: You can deduct the first $7,000 of your home’s value from property tax.
- Exemptions for Veterans: If you are a combat veteran, you may qualify for an additional $4,000 exemption.
- Disabled Veterans: Disabled vets are entitled to exemptions above $4,000.
- Senior Citizens: Individuals 55 and older who buy a new home can transfer the house’s base-year value to the new home if certain guidelines are met.
- Disaster Relief: Some California counties qualify for a reduced assessment until the home is repaired or restored.
By working with a property valuation lawyer, you can potentially drop hundreds of dollars from your yearly property tax bills if the evidence shows that the county assessors overvalued your home.
Benefits of Property Valuation for Rental Owners
If you are planning on purchasing rental properties, you’ll want to make sure that you are not paying too much. Your property valuation lawyer can decide on the ideal method for calculating the value of a potential purchase. The mortgage company will also want this information to ensure that they are not overfinancing the purchase.
If you are planning to sell a rental property, you can maximize your profits by working with an experienced property valuation lawyer who can consider the future earning potential of your rental property when coming up with a final selling price.
Even in situations where you do not plan on selling your rental property, you can still benefit from an accurate property valuation. Having a high-value property allows you to increase cash flow by adjusting your rental rates accurately. If you haven’t raised rent in months or years, you may already be behind the market rate for your rentals.
You can proactively raise the value of your property by:
- Updating the home’s layout
- Upgrading kitchens and bathrooms
- Increasing land value via landscaping
- Building an addition, like an extra bedroom
- Including on-site parking
Why Hire a Property Valuation Attorney?
Anyone who works in real estate should be familiar with property valuations. In many cases, there are benefits to using multiple property valuation methods to gain a broader perspective on the potential value of a current asset or future purchase. Any inaccurate estimates could lead to breaches of contract and potential causes of legal disputes. Working with an attorney is one way you can avoid those situations.
Lastly, an accurate property valuation can help prevent you from being sued following the sale of land. Anyone can sue for fraud in civil court. For fraud to be proven, the plaintiff will have to show that the seller knowingly deceived the buyer by selling the property for more than it was worth.
Lawsuits can be quite costly to defend against, and there is always the potential for punitive damages to be levied, in addition to having to make up the difference between the property’s actual value and what it was sold at. One way to reduce the risk of being sued is to have the property valuation vetted by an experienced law firm.
Establish an Accurate Trust and Will
Estate planning is not simply for end-of-life decisions. We encourage our clients to begin the process of setting up trusts, drafting wills, and considering the possible need for guardianships early into life so those decisions and recommendations can be updated as your life evolves.
There are many estate-planning-related situations where you will need an accurate property valuation. For example, if you are seeking to transfer property to a relative, this will be necessary. If the property is inherited, the recipient of that land may need to pay an estate tax that requires knowing its actual value. At any point, if you need to summarize the value of your assets, the value of your properties will play an important role in that area as well.
Having a properly drafted and signed will can help prevent the need for your assets to go to probate court once you have passed. The will needs to have accurate summaries of asset values to ensure that it does not become the source of litigation for your heirs. DeArmey Law can include a comprehensive property valuation as part of your estate planning.Â
FAQs
Q: My Property Is Being Acquired Through Eminent Domain. How Can an Attorney Help?
A: If your property in Rancho Santa Margarita is being seized through eminent domain action, an attorney can help. While there are often few options for fighting a lawful eminent domain action, the government is obligated to provide fair compensation to the property owner. This assessment can be performed by your property valuation lawyer. Failure to take this straightforward step for yourself can lead to the undervaluing of an important asset. Let our law firm handle the valuation process for you. We can negotiate on your behalf.
Q: How Much Do I Pay in Property Taxes for My $1 Million Home in California?
A: The base tax rate for property taxes is one percent. If your home is valued at $1 million, then you will pay around $10,000 per year in property taxes. Your property valuation lawyer can look for ways to reduce your taxes, either by protesting the value of your home or exploring exemptions you may qualify for. Tax assessors often make mistakes when calculating rate increases or the value of home upgrades. Our law firm can examine your property taxes closely to find possible ways to lower those payments.
Q: How Much Does a Property Valuation Lawyer Cost?
A: A property valuation lawyer usually costs around $200 to $400 per hour. To do their work, lawyers also work with in-house legal aids who earn less. The cost of your property valuation will depend on how much time your lawyers spend on the project, plus the cost of any other law firm employees or contracted professionals. Hiring an attorney comes with potentially high cost-savings associated with property tax or family law court cases.
Q: Will My Property Valuation Lawyer Use More Than One Valuation Method?
A: Your property valuation lawyer may use more than one method to gain a fuller understanding of the market and value of your property. Each method has unique benefits, and no two property valuation cases are exactly the same. When calculating the value of your land, the legal team of DeArmey Law draws on many years of experience handling property cases.
Q: Does My Property Value Affect My Ability to Get a Loan?
A: The value of your property can affect your ability to get a loan, as it is one major consideration for lenders and creditors. The higher the value of your land, generally speaking, the greater access to the capital you have. Your ability to access lines of credit may depend on the determinations of your property valuation lawyer in California. If you are looking to refinance your property, having accurate property valuations can help the mortgage lender know that they are not overfinancing the property.
Q: Can I Sue for Property Valuation Fraud?
A: You can sue for property valuation fraud. Fraud is the legal term for when someone knowingly conceals the value of a property to a buyer. The courts will consider whether the dependent acted with the intent of depriving the victim of money or harming them. If the plaintiff can prove their case, the defendant will pay monetary compensation. This will include the amount of money the victim was defrauded of and possible punitive damages for emotional and material harm caused to the victim.
Schedule Your Property Tax Valuation Consultation Today
Having an accurate assessment of your property value can help with estate planning, division of assets during divorce, and other important aspects of life. Having an experienced property valuation lawyer on your side can help you determine the ideal method for valuing your land. Your lawyer can also provide legal counsel on a wide range of property-related issues that may arise. To schedule your consultation with DeArmey Law, contact our California office today.
