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How can I figure out the fair market value for an inherited property?

There are many sources you can use to figure out the fair market value for an inherited property including tax records, publications (RE ads), real estate agents, and appraisers. Obtaining an appraisal report from a licensed appraiser is the most formal way for an inherited property to be valued.

Executors and beneficiaries will want to know the value of real estate if it is part of the inventory of an estate. The value of the property “as of the date of death” is used as the home value basis and is often required for probate, for distribution of the asset among multiple beneficiaries such as siblings, and/or for tax purposes (to determine gain or loss liabilities when the home eventually sells).

An appraisal is usually done while performing due diligence in the estate distribution process. Appraisers are also familiar with performing retrospective value analysis to determine the value during the time period of the date of death if that is required. Although it will cost several hundred dollars (or more), the most reliable estimate of value will come from a licensed real estate appraiser that has been formerly trained and will spend the time to determine an accurate fair market value.

If you just need a rough idea of property value and you are comfortable doing some research on your own, you should start by reviewing the tax records. In Palm Beach County and Martin County, you will be able to find the “Assessed Value” and “Market Value” for the property online. The Market Value will be the most accurate representation since the Assessed Value is impacted by tax exemptions. The tax record values are typically a bit lower than the true market value (they usually aim a little low on purpose, so that they don't over-tax residents).

There are online estimators which are software based (like Zillow), but these are model based algorithms and are often significantly off on their estimates.

Realtors will usually provide an estimate of the value of the property without charging you because they are motivated by anticipation of a potential future sale. Real estate agents are used to having competition for your business, and it is very common for executors to obtain estimates from 3 different realtors. By using several different realtors you can gain a better understanding of the local market drivers (the typical value range for views as an example), and you can see how close they are to each other in their estimates.

If you need an accurate, documented & defendable value then you will probably want to go with an appraisal. However, if you can get away with using one of the other methods we have listed, you can save yourself some money as long as you are willing to put in some time and effort.

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