6 Times When You May Need a Real Estate Appraisal

Admin • April 12, 2021

Real estate is one of the biggest investments made by either a business owner or a homeowner. This means that appraisals are a vital part of the puzzle. But when should you seek out an appraisal and why? Here are six of the most important times to do so.

1. Buying a House or Building

Certainly, the most common time to get an appraisal is when you buy property. The appraiser provides an independent analysis of the property's strengths and weaknesses - especially complex commercial properties - and how these will relate to its value. It allows you to negotiate with more confidence. And a lender may or may not require it in order to protect their own interests.

2. Doing Estate Planning

To properly plan the division of your estate, no matter what your goals for the assets, you need to know how much your assets are worth. For instance, if you plan to divide up your assets among multiple children or grandchildren, an even split may not be the best approach. Instead, understanding the value of each asset allows you to divide individual items in the most equitable or fair manner overall.

3. Refinancing Your Property

Refinancing your mortgage can be a great way to save a lot of money, both in your monthly payments and in interest over the life of the loan. However, tapping the value of that property requires knowing what the value is at the time of refinancing without actually selling it. You may have trouble qualifying if the property is undervalued, and the lender may not approve things if it seems overvalued.

4. Appealing Tax Assessments

Property tax assessments are based on the value of the home or commercial building. While you can't do anything about the actual tax rate assessed on your real estate, you can take steps to make sure that it's based on an accurate assessment of value. To appeal to the local assessor's office, though, you'll need to have the strongest possible case for revaluation.

5. Inheriting Property

You generally aren't required to get an appraisal when you receive an inherited property, but it's a good idea for two reasons. First, future taxation on the property if you sell or divide it is generally based on its value on the date of the owner's death (or an alternate valuation date). And the best way to prove that value and have it in writing for future use is to have a formal appraisal. Second, understanding the true value of an inherited asset is important for each new owner. You need this in order to buy appropriate insurance, to share it with joint heirs, and to do your own estate planning.

6. Claiming Bankruptcy

Complex bankruptcy cases may call for a real estate appraisal to get an accurate idea of the value of a home that's an asset in the claim. Probably the most common situation is when a claimant wants to strip a second mortgage and turn it into an unsecured loan. To do this, the value of the attached property must be less than the amount of the first mortgage. A current appraisal can prove this to the court.

Where to Start

Clearly, real estate appraisals come in handy at many points of a person's life. Whether you want to buy, sell, insure, or borrow, you need to know the true worth of this large-scale investment.

New York property owners and buyers can rely on the quality services of East Coast Appraisal Service . With 30 years of experience, we will provide you with the confidence and information you need to make the best decisions. Call today to make an appointment.

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What Is an IRS Step-Up Appraisal? A Plain-English Guide

May 28, 2026

When someone inherits property—whether it’s real estate, stocks, or other assets—one of the most important (and often overlooked) tax concepts is the “step-up in basis.” An IRS step-up appraisal is the process used to determine the fair market value of an asset at the time of the original owner’s death. That value becomes the new tax basis for the heir. Understanding how this works can save—or cost—significant money when the asset is eventually sold. What Does “Step-Up in Basis” Mean? “Basis” is essentially what an asset is worth for tax purposes. Normally, if you buy something, your basis is what you paid for it. But when you inherit property, the IRS allows that basis to be “stepped up” to the asset’s fair market value as of the date of death. Example: A parent buys a home for $100,000 decades ago At the time of their passing, the home is worth $700,000 The heir’s new basis becomes $700,000—not $100,000 If the heir sells the home for $710,000, they only pay capital gains tax on $10,000—not $610,000. That’s the power of the step-up. What Is an IRS Step-Up Appraisal? An IRS step-up appraisal is a formal valuation that establishes the fair market value of an inherited asset as of a specific date—usually the date of death. For real estate, this means a licensed appraiser evaluates: Comparable sales (comps) Property condition Market trends at that time Location and unique characteristics The result is a retrospective appraisal , meaning it determines value as of a past date, not the current market. Why Is It Important? A step-up appraisal is critical for several reasons: 1. Reduces Capital Gains Taxes Without a proper appraisal, the IRS may assume a lower basis, increasing taxable gains when the asset is sold. 2. Provides Documentation If the IRS ever questions the reported value, a professional appraisal serves as defensible evidence. 3. Helps with Estate Planning and Reporting Executors and heirs need accurate values for estate filings and distribution decisions. When Do You Need One? You typically need a step-up appraisal when: You inherit real estate and plan to sell it The estate did not already establish a value for tax purposes Significant time has passed since the date of death There’s potential for IRS scrutiny (high-value assets) Even if you don’t plan to sell immediately, getting the appraisal early can prevent headaches later. Date of Death vs. Alternate Valuation Date Most step-up appraisals use the date of death as the valuation date. However, in some cases, the estate may elect an alternate valuation date (six months later), if it reduces estate taxes. This decision is usually made by the estate’s executor in consultation with tax professionals. What Makes a Good Step-Up Appraisal? Not all appraisals are equal—especially when dealing with the IRS. A reliable step-up appraisal should: Be completed by a state-licensed or certified appraiser Follow Uniform Standards of Professional Appraisal Practice (USPAP) Clearly state it is a retrospective appraisal Include strong comparable sales data from the relevant time period Be well-documented and defensible Common Mistakes to Avoid Using current market value instead of date-of-death value Relying on informal estimates (like Zillow) Waiting too long to gather historical data Failing to get an appraisal at all These missteps can lead to disputes or higher taxes. Final Thoughts An IRS step-up appraisal might not be the first thing on your mind after inheriting property, but it plays a major role in determining future tax liability. Getting it right can mean the difference between a manageable tax bill and a costly surprise. If you’ve inherited property—or expect to—it’s worth consulting with a qualified appraiser and tax advisor early in the process. A little diligence upfront can protect you financially down the road.