SHow Do Appraisers Gather Information for a Date of Death Ap

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A Date of Death appraisal is different from a typical current appraisal because the appraiser is developing an opinion of the property's Fair Market Value as of a specific date in the past—the date the property owner passed away.

Sometimes that date was only a few months ago. In other cases, an estate, beneficiary, CPA, or attorney may need a retrospective appraisal several years after the date of death.

One of the questions I frequently hear is:

“How can you determine what the property was like and what it was worth several years ago?”

The answer is that a retrospective appraisal involves reconstructing both the property and the real estate market as they existed on the effective date. We gather information from a variety of sources and evaluate the available evidence to develop a well-supported opinion of Fair Market Value.

Public records are often an important starting point.

Depending on the property and location, available records may provide information regarding the home's size, age, lot, improvements, prior transfers, permits, ownership history, and other property characteristics.

Historical records can also help determine whether improvements or renovations occurred before or after the Date of Death—an important distinction when valuing a property retrospectively. 

Multiple Listing Service (MLS) records can be particularly valuable.

If the subject property was previously listed for sale, historical listings may contain photographs and descriptions showing the property's condition, finishes, improvements, amenities, and other characteristics at a particular point in time.

The MLS is also an important source for researching the market that existed as of the Date of Death. Comparable sales, listings, market trends, exposure periods, and other information from the relevant period can help the appraiser understand what buyers and sellers were experiencing at that time.

A retrospective appraisal should reflect the market as it existed on the effective date—not today's market.

You might be surprised at how useful ordinary family photographs can be.

Family photos taken inside or around the property may provide valuable evidence of its condition and features near the Date of Death. A holiday photograph taken in the kitchen, for example, might help document the cabinetry, countertops, appliances, flooring, and overall condition of the room.

Photographs may also show bathrooms, flooring, exterior improvements, pools, landscaping, docks, garages, or other features that have since been renovated, replaced, or removed.

These photographs do not have to have been taken for appraisal purposes to potentially be useful.

Family members, beneficiaries, executors, trustees, and others familiar with the property can also provide important historical information.

They may remember when a kitchen or bathroom was remodeled, when a roof was replaced, whether the property had deferred maintenance, or what improvements existed on the Date of Death.

Client interviews can also help identify other records or photographs that may be available.

The appraiser considers this information together with other available evidence when developing the retrospective appraisal.

Depending upon the assignment, other historical documentation may also be useful, including prior appraisals, inspection reports, building permits, renovation records, receipts, insurance documents, surveys, photographs, property disclosures, and other records.

Not every assignment will have all—or even most—of these items. The objective is to gather the information that is reasonably available and relevant to the valuation.

Every retrospective appraisal is different, and complete historical information is not always available.

We work with the best information and documentation that can reasonably be obtained. Historical MLS records, public records, family photographs, interviews, prior documents, and other available sources may all help establish the property's characteristics and condition as of the Date of Death.

When certain information cannot be independently verified, the appraisal can identify the assumptions or limitations that were necessary.

You do not need to assemble a perfect historical file before contacting an appraiser. Part of our job is to investigate the property, identify appropriate sources of information, and determine what evidence is available.

A well-supported Date of Death appraisal involves much more than simply finding several old comparable sales.

The appraiser must consider two historical questions:

What was the property like on the Date of Death?

and

What was the real estate market like on the Date of Death?

By researching historical market data and assembling the best available information about the property, an appraiser can develop a retrospective opinion of Fair Market Value even when the effective date occurred years earlier.

Jack Lavoie, SRA, AI-RRS is a Florida Certified General Real Estate Appraiser providing Estate and Date of Death appraisal services throughout Southwest Florida.

MyFloridaAppraiser.com provides retrospective appraisal services for estate administration, inheritance, probate, tax reporting, stepped-up basis, and other estate-related purposes.

Serving Fort Myers, Cape Coral, Sanibel & Captiva, Estero, Bonita Springs, Naples, Punta Gorda, Port Charlotte, Babcock Ranch, and surrounding Southwest Florida communities.