Settling an estate after the death of a loved one is a complicated process, especially if there is any real property involved. Hiring the services of a professional real estate appraiser is an important and highly useful procedure that helps everyone involved, from heirs to tax agencies, agree on a property’s value.
When assets include real property of any kind, fair market value must be assessed for a variety of reasons. A real estate valuation must be determined when there are multiple heirs in order to equally divide its worth. Market value must also be assessed for tax purposes, and to determine the total value of the estate in order to assess inheritance tax liability, if applicable.
Perhaps one of the most beneficial uses of a property appraisal in an estate settlement, however, is that it takes all the emotion out of the assessment process and removes the possibility of speculation on the part of each heir. With official ray white agent appraisal documents in hand, complete with detailed physical descriptions and comparable local values, there is little room for conjecture or differing opinion on how much the property is really worth. Everyone is able to move on knowing they have engaged the services of a certified expert who has fairly and thoroughly considered and set forth the most accurate fair market value possible.
Appraised values are not absolute. There can be unknown factors that can affect real estate values. The recent recession has certainly demonstrated how quickly an appraisal can become obsolete or inaccurate, based on circumstances outside of the appraiser’s control. Nevertheless, most estate settlements do rely heavily on valuations returned by property appraisals.
Upon completion of the appraisal, the appraiser provides itemized documentation revealing the process of the value determination of the subject property, showing how the market value was calculated. Depending on the type of property being appraised and the purpose of the appraisal, there are several standard forms used in the industry.
Property appraisals are not an exact science. For the most part, property values are based on a set of variables, such as square footage, number of rooms, lot size, amenities, age, etc. These variables are compared to other properties with similar statistics that have been appraised recently, and values are adjusted for differences between the properties.
Appraisals are an important aspect of amiable, effective estate settlements. Because a professional appraiser is an impartial expert trained extensively in the field of property value assessment and has nothing to gain or lose in the final determination of value, he or she is a valuable asset to the heirs. There is even greater benefit in employing a local appraiser who is familiar with the surrounding area, the environment, and any other factors that may affect the value.
Knowledge, experience and impartiality provide the best tools to effect a fair, just determination of property value and division of assets for the benefit of all parties involved. Hiring a real estate appraiser to make sure real property is as correctly valued as possible can help give everyone who is involved peace of mind.