Do I Need An Appraiser?
Appraiser vs. Real Estate Agent for Valuation of Real Estate Property
For many years homeowners have utilized the services of real estate agents for establishing the value of their real property for an estate that has a transfer of ownership due to death or inheritance.
Important IRS requirements
Real estate agents have been willing and able to perform the task of what they refer to as a “BPO”, Broker Price Opinion. On many occasions agents may have charged a fee or performed this task as a “goodwill” gesture hoping to be given the opportunity to list the property should the heirs decide to sell. But the tides are changing based on the expectations of the IRS. As a result, more and more attorneys and accountants are recommending to their clients that they use the services of a licensed or certified appraiser for the valuation of real property in their estate.
Audit Considerations
If your estate may be subject to an audit, many attorneys and accountants will recommend the use of a licensed or certified appraiser, plus possibly a second opinion by another appraiser or a real estate agent. An appraiser with superior credentials and methodology and local experience is preferred as the tax court and circuit courts often look to the best appraisal done by the most competent appraiser.
Timing
Timing is also a very important factor to consider. When the decision has been made to obtain an appraisal for estate purposes it would be best to hire an appraiser in a timely manner. Often times an appraiser may charge more for their services if asked to perform a retrospective appraisal. Appraisals done as close to the required date as possible are more accurate and reliable than those done sometime later. If challenged by the IRS, a current appraisal is potentially more credible than one done at a later date due to the fact that the appraiser can be most accurate with current value than having to calculate historical value of real estate.
Consumer Choice
At the end of the day the decision to rely upon an appraiser versus a real estate agent is ultimately the decision of the consumer -- but quality of service should be the deciding factor.
Robin L. Brown
Real Estate Appraisal and Consultation
408-978-0408
