Acquiring a property through the probate process can be a real challenge at times, flooding your time with stacks of paperwork and finding individuals qualified to value a property. Valuing estates for probate sales can be an extremely time-consuming and nerve-wracking procedure; that’s why you should know what to do in such situations and how to approach the entire process beforehand.
We prepared a list containing everything you should know before starting the probate process, how you should go about it, and mainly, who should put a price tag on the property.
What Is a Probate?
People less familiar with the world of real estate might not be that well acquainted with the word ‘probate,’ so we decided we’d explain the whole context behind it. A probate valuation is the process of a court valuing the estate, its assets, and liabilities when a person dies in order to allocate them to the correct beneficiaries.
The probate process is conducted when the deceased person left a will, and its validity needs to be confirmed with the assets they have owned or if the departed person simply did not have a will in place. In addition to that, probate is conducted to collect any remaining liabilities from the deceased person and split the remaining estate between the beneficiaries.
Who Conducts It?
A probate is usually executed by a representative appointed by the deceased person in their will, under a probate court’s supervision. The allocated person is responsible for supervising the process of splitting the inheritance so that the will is respected and the correct assets are distributed to the designated beneficiaries.
A probate executioner is also responsible for valuing pieces of property and objects that may be of high worth to be split correctly. When things of high value come into play, there is a need for such items to be appraised for inheritance tax purposes.
Estate Agent and Probate
Estate agents and probates are a complicated topic; simply speaking, estate agents can give you a valuation for a probate amount; however, those numbers aren’t the ones that will be used to determine the taxes that have to be paid for the property.
If you have contact with an estate agent, you can ask them to give you a valuation of the property before you file for an official valuer. This will allow you to gain a ballpark figure of how much the estate is worth. However, probates are calculated for tax purposes, and therefore it will have to be valued by a suitably qualified valuer, who will give you an accurate valuation of the property.
On the other hand, a market appraisal is merely speaking the value for which properties nearby were sold for, of course weighing specific factors in determining the price. The factors to be considered under a market appraisal significantly vary depending on the place, but they’re usually condensed to the square footage of the home, the year built, how the house was finished, the lot size, and other factors that play a determinant on the price.
However, if you want to check for yourself before any official evaluations, make sure to visit popular real estate websites that sell homes nearby the one that is going through the probate process. This will allow you to roughly determine the value the home will be given if you’re wondering how much inheritance tax you’ll have to pay.
Therefore, simply speaking, an estate agent can give you a house valuation of the property that will be going through the probate process; however, it’s the probate property valuation stated by a qualified professional that will be the official probate value.
Estate Agent Vs. Probate Property Evaluator
Many people question whether there is a substantial difference between the value an estate agent will give versus the value of a probate property evaluator. Still, there is a clear distinction between the two.
At times, an estate agent may give an inflated value of the property in question, which would result in a higher tax amount to be paid. On the other hand, a probate property evaluation will much more likely give a much more realistic market price of the property.
If you’ve ever found yourself in a situation regarding the division of a will, you probably noticed that, at times, the process is much more complicated than it seems in the movies. The “reading of the will” may look much different than you anticipated; however, knowing how to face certain aspects of it, such as valuing the property correctly, can make the process go much smoother.
Suppose you ever find yourself in a situation where an estate has to be valued. In that case, we recommend using both a private real estate appraisal and one conducted by a probate valuation professional. Additionally, you might want to discuss any legal issues regarding the properties’ potential taxation with your lawyer.