How to Determine Fair Market Value for an Inherited Property
The best way to determine the fair market value for an inherited property is to evaluate the market. By working with a real estate expert, you’ll have the help you need to accurately assess the value of the house you inherited.
An inherited property may come as both a blessing and a curse. On one hand, you have another valuable asset that can improve your life. On the other, it may be accompanied by the pain of losing a loved one or some other hardship. It doesn’t have to be an added stress, though. Follow these tips to gain control of the process and get the knowledge you need to make smart decisions for yourself and your family.
Ways to estimate property value
When learning how to determine the fair market value of inherited property, there are a few important facets of the home to consider. These include age, condition, and comparable properties in the area. For instance, new and recently renovated homes often sell for more than older ones. The condition of key elements like the roof or foundation will play a major role in price. And finally, the location of a house. These factors are then compared to comps or what nearby, similar properties have sold for recently.
There are a variety of ways to gather insights to help you figure out the fair market value of your property. Keep in mind that this is more of an art than a science as each method has pros and cons.
You might start by looking at sites such as Zillow, Redfin and Realtor.com. These sites show what properties nearby are listed for. However, this does not necessarily determine what they will sell for. While this method is most accessible, it’s also challenging to get an accurate estimate without industry experience.
Get an appraisal
One way to determine the fair market value of a home is to engage a home appraiser. A home appraiser is looking to determine the fair market value of inherited property from the perspective of what a bank might lend to acquire the property. There’s typically an in-person walkthrough to evaluate everything from the roof and foundation to the state of the heating and cooling systems.
In addition to lot size and home size, the appraiser has a whole checklist they’ll consider, including the home’s condition, floor plan, and amenities. The appraiser will also look at nearby comps to see what other similar homes have sold for recently. However, hiring a home appraiser can be costly.
Recent sale prices
To find recent sale prices, you can look at homes previously sold on websites like Zillow. Another option is to get in touch with a real estate professional such as a traditional real estate agent or Sundae market expert . They will do a comparative market analysis using a culmination of different methods along with their knowledge of the space to determine the value of your property.
Options to sell
If you’re not a real estate professional, it may be challenging to determine the fair value of your inherited property by yourself. Although you could sell the house on your own, make sure you’ve considered all your options for selling your house. While some people may want to spend a lot of time on the home selling process, others may prefer a method that’s set up for convenience and ease.
Selling your property on the market can mean a few things. You might decide to work with a traditional real estate agent. It may also mean that you’ve opted to sell on your own. Here’s a quick summary of both options:
- The Multiple Listing Service (MLS) is a private real estate database of homes for sale. It’s how traditional real estate agents list properties and help potential buyers find homes. This is the most common way to sell a house on the market because it offers professional advice and help throughout the process. You’ll also need to be prepared to pay a sales commission to an agent, usually up to 6% of the sales price.
- For Sale by Owner (FSBO) is another route. If you go with this option, you’ll ultimately be responsible for all aspects of selling your home. You won’t be able to leverage the MLS and will have to manage everything from pricing it to handling the closing.
When choosing to sell on the market, you should ask yourself: “is this house in market ready condition?” In most instances, this means that the house is turnkey for future owners. Many traditional real estate agents will recommend you make updates to get into market ready condition. These houses often fetch a higher price on the MLS.
Don’t make the time or money to do the updates needed to sell on the market? Selling off market could be a better solution for you. When you sell off market, you’ll forgo the traditional real estate listing process in favor of a few different methods.
One of the more common types of off market sales include those to an iBuyer. Generally an iBuyer will evaluate your home in some way (in person or virtually). Based on what they see, the company will make an offer on your home.
The iBuyer experience is attractive to some because it’s low hassle. You can also close relatively fast. However, there are usually fees, so make sure you understand them. Additionally, there’s only one take-it-or-leave-it offer rather than a host of options to choose from.
Sundae’s Marketplace is an alternative off market option. Sundae blends attractive elements of working with a traditional real estate agent and selling to an iBuyer. You’ll work with a team of professionals dedicated to helping you explore your options with speed and ease.
Instead of making a single offer on the inherited home you need to sell, Sundae puts your home in front of a large group of qualified investors who place offers on the home. These investors know the market and understand the quirks of buying homes as is. You review all the options presented–then choose the one you like best, or decide not to sell at all.
Learn more: Here’s How Sundae Works in 5 Steps
Sell as is for a fair price
Selling as is on Sundae couldn’t be easier, especially if you’re faced with the question of how do you determine the fair market value of an inherited house. Sundae is convenient, especially appealing if you’re selling a home that’s not near you geographically or needs substantial updates. With Sundae, there’s no need to fix the roof, replace the carpet or update the appliances. And since Sundae solicits bids from multiple investors, you can feel confident that you’re getting a fair market price.