Understanding Residential Estate Appraisals
An estate appraisal provides an independent opinion of a property’s market value as of a specified effective date—the date the opinion of value applies to. Depending on the estate’s needs, this may be a current date or a historical date, such as the owner’s date of death.
When an Estate Appraisal May Be Needed
Residential appraisals may be developed for estate settlement, date-of-death valuation, tax-related purposes, property distribution, or other estate matters involving real property.
The requirements of each assignment depend on its intended use—what the appraisal will be used for—and intended users—the client and any other people or organizations identified by the appraiser as users of the appraisal. Receiving a copy does not automatically make someone an intended user. The effective date, property characteristics, and other relevant circumstances help determine the scope of work: the type and extent of inspection, research, and analysis needed. These requirements should be established before the appraisal is developed.
Current and Retrospective Appraisals
A current appraisal develops an opinion of value as of a current effective date. In other circumstances, a retrospective appraisal may be required to develop an opinion of value as of a prior date.
For example, an estate assignment may require an opinion of the property's market value as of the owner's date of death. In a retrospective assignment, the appraiser analyzes market information and property conditions relevant to that historical effective date rather than relying solely on current market conditions.
What to Expect During an Estate Appraisal
Assignment Information
The appraiser identifies the property, intended use, intended user(s), applicable effective date, and other relevant assignment requirements.
For estate-related work, confirming the appropriate effective date at the beginning of the assignment is particularly important.
Property Inspection
When an interior and exterior inspection is part of the scope of work, the appraiser observes and documents relevant physical characteristics of the property, including its size, condition, quality, features, and improvements.
For a retrospective assignment, information concerning the property's condition and characteristics as of the historical effective date may also be relevant to the analysis.
Market Research and Analysis
The appraiser researches market data relevant to the property and effective date and analyzes comparable sales and other information applicable to the assignment.
The analysis considers relevant differences between the subject property and the market data used to develop the opinion of value.
Appraisal Report
The completed appraisal report communicates the appraiser's analysis and opinion of value, together with the information necessary to understand the assignment and conclusions.
Information That May Be Helpful to the Appraiser
The information needed will vary by assignment. Depending on the circumstances, useful information may include records concerning the property's ownership, improvements, prior condition, or other characteristics relevant to the appraisal.
For a retrospective appraisal, historical information about the property may be particularly useful when its characteristics or condition have changed since the effective date.
The appraiser determines what information is relevant and how it is considered within the appraisal analysis.
The Appraiser's Role
A residential appraiser develops an independent and impartial opinion of value based on the requirements of the assignment and relevant market evidence.
The appraiser does not determine tax liability, distribute estate assets, provide legal advice, or make decisions regarding estate administration. Attorneys, accountants, tax professionals, and other advisors may address those matters within their respective areas of expertise.
Residential Appraisals for Estate-Related Purposes
IRV Appraisers provides current and retrospective residential valuations for estate-related purposes throughout Philadelphia and the surrounding counties. Contact us with the property address, appraisal purpose, relevant valuation date, and any deadlines.