How Do You Determine Fair Market Value of Inherited Property?

Inheriting property can be a bittersweet experience. While it may carry sentimental value, it also comes with financial considerations, including determining its fair market value (FMV). Understanding FMV is crucial, whether you plan to sell, rent, or keep the property. Here’s how you can determine the fair market value of an inherited property.

1. Hire a Professional Appraiser

One of the most reliable ways to determine the FMV of an inherited property is by hiring a certified appraiser. An appraiser assesses the home’s condition, compares it to similar properties, and considers factors like location and market trends to provide an accurate valuation.

2. Check Comparable Sales (Comps)

Looking at recent sales of similar properties in the same area can give you a rough estimate of the property’s value. Real estate agents and online real estate platforms offer data on comparable sales, helping you gauge the local market.

3. Consider a Comparative Market Analysis (CMA)

A real estate agent can conduct a Comparative Market Analysis (CMA) to estimate the property’s worth. This report analyzes comparable properties that have recently sold, are currently on the market, or were listed but didn’t sell.

4. Review Property Tax Assessments

Local tax records can provide an assessed value for the property. While tax assessments don’t always match market value, they serve as a useful reference point when evaluating FMV.

5. Factor in Home Improvements and Repairs

The condition of the inherited property significantly impacts its value. If it needs major repairs, its market value may be lower. On the other hand, updated kitchens, bathrooms, or energy-efficient upgrades can increase its worth.

6. Analyze the Current Market Conditions

The state of the real estate market plays a key role in property valuation. In a seller’s market, where demand is high, property values tend to be higher. In a buyer’s market, where supply exceeds demand, property values may be lower.

Why Fair Market Value Matters

Determining FMV is essential for tax purposes, estate settlements, and selling the inherited property at the right price. If you plan to sell, knowing the FMV helps ensure a fair deal and avoids potential disputes with family members or buyers.

At Tropical Homebuyers, we specialize in helping homeowners navigate the complexities of inherited property. Whether you need a quick sale or guidance on valuation, we’re here to assist. Contact us today to explore your options!

This post was written by a professional at Tropical Homebuyers. Tropical Homebuyers is a Real Estate investment firm that purchases houses in any condition across the Southern California region. If you’re looking to sell your home for cash in Riverside, CA, we can help you make a quick and hassle-free sale.