How does trustee value property

[Monroe0701]

Hello all

Spoke with an attorney last week about filing chapter 7. One thing that came up was the equity in the house I have. The county auditor has it valued at $198,000. I figured around &260,000, Zillow showed $300,000. He told me to get a realtor to do an Opinion of value on it and that came back at $214,000. The house needs repairs done to it. Will the trustee take the realtor’s opinion as the value or is there a chance that they would want a full appraisal done? Currently I owe $51,000 on it and Ohio allows a homestead of $161,000.

[justbroke]

Welcome to BKForum!

The Trustee will likely look at the assessed value which is typically listed as the FMV on the tax assessor's website. The Trustee may also quickly look at Zillow, Relator, Redfin, or others. If they do question what you put on your schedules then you would need to get something better than a broker's opinion (BPO). If it turns into a fight between your value and the Trustee's that means getting a full residential property appraisal. Probably nine times out of ten, the Trustee isn't going to want to fight too hard because they don't make any money if the value doesn't match their opinion or estimation of value.

I'm sure your attorney will be well-versed in providing evidence of value should it come down to a hearing. That is why our attorney had you get a free BPO and will send that to the Trustee should they question the value ($214K) that you listed (or will list) on your Schedule A. If the Trustee wants a full appraisal then the Trustee will need to pay for that full appraisal. I'm sure your attorney will say let the Trustee get a full appraisal and if it comes back really high, that you would then go get your own full appraisal.

I would not worry about it at this point. It sounds like you are up to speed on the process. No one can read into the mind of the Chapter 7 (Panel) Trustee.

[Monroe0701]

Justbroke, thanks for the reply. I just looked up my property on both Redfin and Realtor and it shows $250,000. It seems Zillow has some over inflated property values!

[justbroke]

These online sites use automated (electronic) valuation models (AVMs). They can be hit or miss. Sometimes they overvalue a property and sometimes they undervalue a property. There's one free AVM that I trust more and that's the one on Bank of America's site. Just search Google for "Bank of America home value estimator" and it should be the first link. Type in your address. The nice thing about their AVM is that it provides a date that the AVM determined the price that is displayed.

[Monroe0701]

I just looked it up and it says $333,000! That’s crazy!

[justbroke]

Now you see why only an appraisal performed by a licensed residential property appraiser can see the actual value. AVMs use recent sales and listing data to try to compare homes and come up with a price. It can't take into account maintenance or any other factors. Those AVMs could be comparing your home based on values in a nearby higher average property value and you'd get inflated numbers.

Bottom line, do what your attorney tells you to do. Use the BPO. If the Trustee questions it, your attorney will tell the Trustee to go get an appraisal. Then you'll know that you'll need to prove the value. Unless and until that happens, this is all speculation.