Dealing with a home or other residential property after a death can feel like one more difficult responsibility. Families, personal representatives, trustees, and attorneys often know that an appraisal is needed, but they are not always sure what information to gather or where to begin.
A date-of-death appraisal provides an opinion of value as of a specific date in the past (a retrospective date). That date (not the day the property is inspected) guides the research and analysis.
Step 1: Start With the Purpose and the Date
Begin with the property address, the date of death or other requested effective date, the purpose of the appraisal report, who is engaging the appraiser, and who needs to use the report (intended use or users). It also helps to know whether an attorney, accountant, trustee, or other fiduciary has provided appraisal instructions or a deadline.
If the effective date is uncertain, the estate's attorney, accountant, or tax professional should confirm it.
Why The Appraiser Needs to Know the Client
In appraisal practice, the client is the party who engages/hires the appraiser for an appraisal assignment. In a date of death appraisal, the exact wording of the client is vital (for example, the Estate of John Smith co Betty Smith, Executrix). This involves knowing how the property is titled. Ask your estate/trust professional for this information. Also, the intended use is very important. For example, "For Estate Purposes", or "For Estate Tax Purposes", etc.
The client may not be the only intended user of the report. For example, an executor may engage the appraiser, while an attorney or tax professional may also need to be identified as intended users. The client is the only person who can set specific instructions to the appraiser.
Since estate appraisals are in the past, having photos of the property on or before the effective date is vital. For example, subsequently to the effect date a kitchen may have been renovated, or storm damage may have been repaired.
Local Records Are A Starting Point
Useful records can include dated photographs, renovation or repair records, permits, surveys, floor plans, inspection reports, association information, or a prior appraisal. The person who knows the property's history can also help explain its condition and any changes made to the property before or after the effective date.
County property appraiser records and local permit histories indicate recorded sales, parcel characteristics, additions, roof work, or other improvements. They are useful, but they do not provide the property's overall condition as of the effective date. A prior appraisal can also provide helpful background, photographs, and descriptions of the property prior to the effective date of the appraisal.
For a condominium appraisals, any association information, special assessment amounts and reason for the assessment as of or prior to the effective date may matter. Any active construction on the property or on the building itself at or around the effective date are also important to provide to the appraiser.
The goal is to give the appraiser enough reliable information to understand the property and determine which records belong in the assignment as of the effective date of the appraisal.
Be Clear About Changes and Missing Information
Changes after the effective date should be clearly identified. For example, a renovated kitchen completed subsequently will not be treated as though it already existed prior to the effective date.
Experience Matters When the Evidence Is Incomplete
A current appraisal addresses value as of a current effective date. A date-of-death assignment looks back to the relevant historical date. The appraiser researches the market data to reconstruct market conditions and subject property conditions that existed on or before that effective date.
The appraiser must determine which comparable sales competed with the property in its market segment at the effective date, then considers differences that buyers recognized at that time.
This is also where dated photographs, conversations with someone familiar with the home, archived listings, permits, and other records can work together. The appraiser weighs the reliability of each source and develops an opinion from market evidence that fits the property and the assignment.
A current online estimate or market analysis is not a substitute for a properly developed date-of-death appraisal. The report should identify the intended use, intended users, effective date, property interest, and scope of work, then support the opinion of value with market evidence relevant to that assignment.
For a broader discussion of appraisals used in probate, inherited-property, trust, and related matters, see estate appraisal services.
A Simple First Step
Start with what you already know: the property, the requested date, why the appraisal is needed, who is engaging the appraiser, and who needs to use the report. Be ready to explain whether an individual, attorney, estate, executor, trust, trustee, accountant, or another professional needs to be identified. Have the records that are easy to locate and make a note of anything you are unsure about. The first conversation can narrow the assignment and prevent unnecessary work.
Spiel Appraisal Services is led by a Florida State Certified General Real Estate Appraiser, license RZ2435, with 40 years of residential appraisal experience. The firm prepares clear, well-supported residential appraisal reports for estate, trust, date-of-death, and other private matters in Palm Beach, Martin, St. Lucie, and Broward Counties.
To discuss a property and the requirements of the assignment, contact Spiel Appraisal Services.