Do You Need an Appraisal When Inheriting a Property?

Inheriting a home or other real estate can bring a long list of decisions. Should you keep the property? Sell it? Transfer ownership? What happens if multiple family members inherit the same property?

Before making those decisions, it’s often important to understand what the property is actually worth.

A professional real estate appraisal provides an independent, well-supported opinion of value that can help families, attorneys, accountants, and other professionals make informed decisions regarding inherited real estate.

Why Might You Need an Appraisal for an Inherited Property?

There are several situations in which determining the value of inherited real estate may be important.

An appraisal may be needed for:

• Estate administration
• Tax or financial planning
• Selling an inherited property
• Dividing an estate among multiple heirs
• Determining a fair buyout between family members
• Establishing the property’s value as of a particular date

Every estate is different, so it’s important to work with the appropriate attorney, accountant, or tax professional to determine what documentation is required for your specific circumstances.

Establishing the Property’s Value

One important reason for obtaining an appraisal is to establish a credible opinion of the property’s value as of a specific effective date.

Depending on the purpose of the appraisal, the relevant date may be the current date or a previous date, such as the date of the former owner’s death.

This is one reason an online home value estimate may not be sufficient. A professional appraiser analyzes the property, comparable sales, market conditions, location, and other relevant factors to develop a supported opinion of value for the required date.

What if You Plan to Sell the Inherited Property?

If you’ve inherited a property that you don’t intend to keep, you may decide to sell it.

Understanding its market value before making that decision can provide useful information when evaluating your options.

A professional appraisal can help establish an independent opinion of value based on market evidence rather than relying solely on an automated estimate or personal expectations about what the property may be worth.

This can be particularly helpful when the home has been owned by the same family for many years or when there haven’t been many recent transactions involving the property.

What if Multiple People Inherit the Property?

Inherited real estate can become more complicated when multiple heirs share ownership.

One family member may want to keep the home while another would prefer to sell. In other situations, one heir may want to purchase the others’ interests in the property.

An independent appraisal can provide a common starting point for those discussions by establishing an objective opinion of the property’s value.

Rather than each person relying on a different estimate, everyone involved has access to the same professionally developed valuation.

Can an Appraisal Help With a Family Buyout?

Yes. An appraisal can be particularly helpful when one heir wants to retain an inherited property.

For example, if siblings inherit a home together and one sibling wants to keep it, determining the property’s value may help the family and its professional advisors evaluate a potential buyout.

Because family and financial matters can be sensitive, having an independent third party determine the property’s value can provide clarity and reduce some of the uncertainty surrounding the decision.

Can an Appraiser Determine What the Property Was Worth in the Past?

In some circumstances, an appraisal may need to determine a property’s value as of a previous date.

This is known as a retrospective appraisal.

Rather than estimating what the property is worth today, the appraiser researches the market conditions and relevant property information as of the required historical date.

Retrospective valuations may be useful in certain estate-related situations, particularly when an appraisal wasn’t completed at the time of the property owner’s death.

Why Not Just Use an Online Home Value Estimate?

Online valuation tools can be useful for getting a general idea of a home’s possible value, but inherited-property decisions can have important legal and financial implications.

Automated tools don’t physically inspect the property and may not accurately account for:

• The property’s current condition
• Renovations or deferred maintenance
• Unique features
• Location-specific influences
• The most appropriate comparable sales
• Historical market conditions when a retrospective value is required

A professional appraisal provides a documented opinion of value based on property-specific information and market research.

Why Local Appraisal Experience Matters

Real estate markets can vary considerably throughout Western New York.

Properties in Lewiston, Buffalo, Niagara Falls, Grand Island, and other surrounding communities may be influenced by different neighborhood characteristics, buyer demand, and market trends.

Working with an appraiser who understands the Western New York market can be particularly valuable when evaluating an inherited property, especially if the heirs themselves no longer live in the area.

Do You Need an Appraisal for an Inherited Property in Western New York?

Not every inheritance situation is the same, and whether an appraisal is required will depend on your individual circumstances and the advice of your legal and financial professionals.

When an accurate, independent property valuation is needed, Girasole Appraisal Company is here to help.

We provide professional real estate appraisal services throughout Lewiston, Buffalo, Niagara County, and Western New York for individuals, families, attorneys, accountants, and other professionals handling inherited and estate-related real estate.

Contact Girasole Appraisal Company today to discuss your appraisal needs.