For many people, one of the largest components of an estate is their Real Estate properties. Unfortunately for many of these same individuals, ascertaining the “true value” of Real Estate properties is a task that is often over looked during the initial estate process. If you have an estate, and you haven’t had your Real Estate investments appraised within the last few years, then you need to read on to discover three important reasons that your estate should be appraised before it is too late!
Benefits to Conducting an Estate Appraisal
Reason 1 — Determining the type of appraisal can provide a more accurate value to your home for the future recipients.
Did you know that there are a couple of different types of appraisals?
- Cost approach appraisal — This type of appraisal establishes the value of the home by ascertaining what the value of the home is if you were to completely rebuild the structure.
- Value approach appraisal — As the name suggests, this type of appraisal is used to determine the value of the home by conducting a thorough property inspection that takes into consideration the homes in the immediately surrounding area. It is important to note that this type of appraisal will also take into account homes that were recently sold in the immediate area or neighborhood.
- Refinancing appraisal — While a refinancing appraisal doesn’t typically occur during an estate proposal, it could be necessary if the home’s future recipients ever need to refinance the home. During this type of appraisal the following components will be considered:
- Interior and exterior condition of the home, including the condition of the heating, plumbing, and electrical components.
- Number of rooms, including the square footage and functionality of each room.
- Amenities and home improvements that have been conducted within the last 10 – 15 years.
- Location of the home, as well as any neighborhood amenities that could negatively or positively influence the value of the home.
Reason Two — More accurately prepare your estate documents for your intended recipients.
A professional appraisal is necessary to accurately prepare your estate documents. To best understand why this is important, let’s use the following scenario as an example. Let’s say that you are planning on leaving your home to your children. Let’s also say that your home doesn’t have a mortgage. In your mind, this might be a very valuable inheritance to leave your children. However, what happens if your home is in need of a new roof; its plumbing system is outdated; or the neighborhood home-resale value has taken a dive? These unforeseen circumstances could unfortunately turn your home from a valuable inheritance into a costly expense for your children. When you conduct an appraisal on your Real Estate property you are helping to mitigate this risk factor.
Reason Three — Easily spot rising market trends.
One of the benefits of an appraisal is that it can help you to more accurately spot rising market trends. While you might be planning on leaving your estate to a benefactor, if the market is right, it might be more lucrative to sell your Real Estate investment. A residential appraiser who is familiar with the local area will be able to not only spot rising trends, but they will also be able to accurately assign a value to your estate so that you can determine if you would like to capitalize on the rising market trends.
With these three reasons in mind, we hope that you will consider having your estate appraised. Remember that an appraisal is a great way to truly understand the value of your home within the current Real Estate market, while simultaneously helping your future benefactors to understand the potential value of the home.
Cadieux Consulting – Campbell, CA | firstname.lastname@example.org | 408-423-9300