Part 3, Successor Trustee Process, selecting the appraiser

 

Here is Part 3 of the four part series on Estate Appraisals;

Getting prepared if you are a Successor Trustee, Executrix, Executor, or personal representative or administrator for a Will   

If you have any questions about the process, please feel free to contact me at bradbassi@yahoo.com  mobile # 909 262-3434. I will be happy to share information and I will try to guide you in the right direction.

Part 3

Selecting the Appraiser for the Real Estate.

  • For residential home, units 2-4, residential vacant land, manufactured home or condominium, I would recommend hiring a local appraiser. I would suggest a certified residential appraiser, which is the highest licensed level for residential properties. Some appraisers say they cover the area, but where are they located. There are appraisers claiming to cover an area, but they are coming from another County. They may be competent, but I would place more emphasis on a local appraiser if you can find one, if not expand your search is certainly acceptable.
  • Do some google searches for an appraiser in the area, ask some local Real Estate Agents for their suggestions, if the bank has a Trust department get in touch with that group and ask them for a few appraiser references.
  • During the interview, find out how many Estate appraisals they have completed.
  • How long have they been in business, where is their office located, what market area do they cover, and how many appraisals have they completed on the type of property you need appraised. If tract house or condominium I would not be too concerned if the appraiser has been in business for over 10 years. If it is a custom home, residential land, manufactured home or 2 to 4 units, I would ask to verify they have completed a significant number of these type of appraisals. These are what I classify as more complex and you should be careful in your selection of an appraiser for this type of work.
  • Ask them for some references if possible, to verify your thoughts, call those references.
  • Ask them the definition of Market Value they will use. If you don’t give a quick answer to this question, then I would suggest you keep searching. The reason being is the answer is the IRS/U.S. Treasury Regulations for Estate Tax, is the definition of market value. You don’t need the exact code reference, but I see many appraisers working on estate work not referencing the IRS definition of market value and using the Fannie Mae Form for Estate work. That is not a good thing and shows a lack of knowledge on the part of the appraiser.
  • Give them the date of death of the passing of the last spouse or trustee, this will be their effective date of the report. This is what we call a retrospective appraisal report. The effective date and date of the site visit will be different of course, but that is not a problem. The appraiser just needs to identify all of this in their scope of work.
  • Have them send you a written bid via email for your file. Don’t always go with the low bidder, make sure you are comfortable with the appraiser, they seem knowledgeable and that they will take the time to work with you and support your questions and concerns. Once you get the bids make the selection and email them back with your acceptance.
  • Once you have the appraiser set up, schedule the appointment for their site visit and confirm when to expect the appraisal emailed to you via PDF. Get this in writing.
  • Once the report is complete and you have reviewed it to see if it makes sense to you, if not call them and ask questions. Then you can get all the data to the accountant or attorney for their review.
  • If the property is commercial, medical, office, retail strip center and other type of properties, you will need to hire a Certified General Appraiser. Again, same process, go to the internet do some searching, find Commercial Brokers that deal with this type of property and ask them for referrals and go to the Trust department of the bank and ask for referrals. In the world of commercial you may find more niche appraisers, they may only do retail or office or industrial. This is not unusual. The process is the same, but the length of time needed for them to complete their work and the amount of data they will need from you could be lengthy and complex. Also, the commercial appraisals will be significantly more expensive than the residential appraisal. You may need help from others regarding the hiring of an appraiser and the data they will require, don’t be afraid to ask for help from your attorney, accountant or CPA, especially on the commercial properties.
  • Once this is all completed get the details and reports to the accountant and attorney.

Remember this isn’t everything that is needed as each situation is different, but hopefully this will answer some questions or may lead you to ask some more questions of the right people in order, to assist with the process.

If you have any questions about the process, please feel free to contact me at bradbassi@yahoo.com  mobile # 909 262-3434. I will be happy to share information and I will try to guide you in the right direction.

Part 4 of the sequence will be selling the Real Estate

Part 2, Successor Trustee Process, Going through the Items

Getting prepared if you are a Successor Trustee, Executrix, Executor, or personal representative or administrator for a Will   

This is being done in a 4 part series

Part 2  

Going through the belongings and keepsakes, (as a reminder I am not an Attorney, tax account, Tax Attorney or CPA, make sure you go through the process with them, they will give you guidance) can be a tough arduous task, but don’t try to get it done in one day or bounce around from room to room. Set up a game plan as to how to inventory the home and personal property.

Walk through the home (room by room) and take photos and prepare an inventory list of the larger more visible items in the room. Taking photos will be a great time saver, in the digital world of photos now, take multiple photos of each room. Once this first general inventory is complete, now comes the room by room search. Don’t through anything out unless it has been thoroughly searched (see below). Categorize the items but what can be thrown out, items that have a question, items needing an appraisal (antiques, art work, vases, china), and items needing to be designated for a specific beneficiary based on the wishes of the Estate.

If there is art work, vases, collectibles or antiques, you should consider getting appraisals from a personal property appraiser that deals in those types of items. You may need several niche appraisers who specialize in the type of items you must deal with. Don’t take anything for granted when dealing with an estate, sometimes even the simplest item can be something that no one expected may be of value.

After getting the list of the belongings, then refer to the Trust or Will to determine if there is something specific that goes to one of the beneficiaries. If not, then ask the beneficiaries who wants what. Let them negotiate through this process, unless it becomes unruly, then you may have to step in as the referee. If items have been valued, then you may be able to negotiate by value for different items in the home with the beneficiaries that cannot decide on their own. (Don’t give anything away at this point until all the assets have been identified, valued and the report given to either the accountant or attorney for their review.)

Next before you starting throwing things out, make sure to go through each file folder, magazine or book. You will be surprised what you might find. In dealing with my Mom’s estate, she grew up on a farm during the depression. We would find $1 here, $5, $20 in different places (including a coffee can in the trunk of her car), by the time we finished with the scavenger hunt we found enough cash and change to make the scavenger hunt worth the time. Just make sure you inspect each item before it’s in the trash bin. You might also find some important papers or old documents tied to the family that will be a great find for next generations. You just don’t know what people will put away for one reason or another.

Last item, categorize all that was inventoried, along with appraisals (and value) if any received and the items (money or documents) found. Once you get this all together if there is an attorney involved let him/her know. If not, make sure the beneficiaries know about the inventory and the wishes of the Trust or the Will.  Have the beneficiaries be patient, this is time consuming and important. Next step is valuing the Real Estate.

Part 3 will cover ordering an appraisal for the real estate,

Part 4 selling the real estate

 

Remember this isn’t everything that is needed as each situation is different, but hopefully this will answer some questions or may you ask some more questions of the right people to assist with the process.

If you have any questions about the process, please feel free to contact me at bradbassi@yahoo.com  mobile # 909 262-3434. I will be happy to share information and I will try to guide you in the right direction.