Q: I recently sold a property in Texas to my aunt. This was a one-sixth undivided interest in a family farm. My brother owns another one-sixth. We received these pieces of property when my mother passed away a year ago.
My tax lady needs an appraisal of my one-sixth property, but the appraisers want to charge around $1,000, which seems high to me. Is there a less expensive way to get an appraisal to my tax lady?
A: Your mother’s estate should have done an appraisal of her property as soon as she died to establish a baseline price for the property. You’ve sold within a year of her passing away, and so typically that price is assumed to be the actual value for estate purposes.
As far as an appraisal goes, you shouldn’t have to pay anywhere near $1,000. Since you only need this for tax purposes, and not to get a loan on the property, you should be able to shop around and find an appraisal for less.
If that’s not possible, talk to your tax preparer about having a local real estate agent prepare a comparative market analysis (CMA) of the property. A CMA will evaluate similar properties that have sold recently, and you should be able to get an agent to do this for a couple of hundred bucks, or less.
One thing you don’t note in your question is what you think the property is worth. If the property is worth a million dollars, it might be well worth the money to get the property appraised. If the property is worth $50,000, then it may not be worth it to you to have a proper appraisal.
However, the other members of the family may have a similar situation as you are having and, perhaps, all of you can split the cost of having someone give you a value for the property.
If your tax preparer says you need a formal appraisal, then shop around to get one for a better price.