Foreclosures, preforeclosures and real-estate owned (REO) properties: REO homes have additional considerations because these properties are often sold at a discount so banks can liquidate them more quickly. Determining a value on an REO requires three lenses; As-is: a properties market value based on market value, time on market and value without investments in repairs or improvements. Properties on the market longer than 90 days will require an update to the valuation to account for changes in market conditions.
After the passing of a loved one, all or part of the value of a property is gifted or transferred to a new entity. An estate appraisal can be used to measure future capital gains/losses, or taxes due. This appraisal type can be used to determine the step-up or step-down basis depending on an increasing or decreasing market. A personal representative or attorney representing the estate would order this type of appraisal. The effect date of the appraisal would often be the date of death of the loved one.
Date of Death Appraisal
Following a death, an appraisal is often required to determine fair market value of a property. A valuation is often based on the value on the retrospective date of passing and can be used for income tax and estate purposes.
Estate planning is an important part of an individual financial health. This type of appraisal can give you a valuation benchmark to aid in the planning of what is often the most valuable asset in many estates. Setting up a trust and the allocation of real property can eliminate costly mistakes. Often finding the fair market value of your real estate owned can help plan for future taxation and estate distribution.
Appraisals for Divorce & Dispute Resolution
In the unfortunate event of a divorce an appraisal will be needed to determine a fair market value of a property to aid in the division of property. At times a retrospective appraisal will need to be performed meaning a skilled appraiser will use a previous date, such as date of marriage to determine the fair market value on a specified date.