Riverside Bankruptcy Trustee Howard Grobstein, as noted in the post of September 9, 2013 uses a Broker’s Opinion of Value to determine if real property should be administered for the benefit of the bankruptcy estate. A Broker’s Opinion of Value though is not usually an inspection of the real property.
The broker looks at comparable sales in the area and looks for properties that have recently sold with the same or similar square footage. The theory is that one property in the neighborhood should be a similar price to another property in the neighborhood. Thus the opinion is based on recent sales and statistics.
The next step is to have an “Interior Inspection” of the property. This is where a realtor goes to the real property, with the home owner, and walks through the house. This gives the realtor a chance to see the house “warts and all”. Does the house need a new roof? Is there damage on the inside? Are there other problems that could affect the value of the property?
After the Interior Inspection, the realtor will report back to the trustee and then the Trustee will have a good idea how much the house is worth.
If there is a question of the value of the house, an interior inspection of the property may tip the balance in the favor of the debtor. The debtor should cooperate with the trustee and the realtor sent to the house. However, the debtor should also show the realtor all the things that need to be fixed and the damage in the house, if any. This information will help the realtor make a more informed decision. This is the same information that a prospective buyer will want to know when he makes an offer. So tell your client to be honest with the realtor as the information given will then be factored into opinion of the value of the house.