Inheriting a house and its contents can feel overwhelming. First, the situation is often emotionally devastating, because you’ve likely lost a parent, sibling, or someone else close to you. Unfortunately, despite how you’re feeling, you’ll likely have to make major financial decisions in a short period of time.
How do you know the value of the items in an estate? Should you sell them? What if you also want to sell the house? The list of questions can feel never-ending. Fortunately, the process can be broken down into several straightforward steps.
If you’re recently inherited an estate, here’s what to do next.
When inheriting an unoccupied house, you’ll first want to take care of a few basic maintenance and bureaucratic issues, such as:
- Updating the homeowner’s policy, which might lapse upon the death of the occupant. Notify the former owner’s insurance company about the death, and then transfer the policy into your name or buy a new policy from a different company.
- Updating utilities. Even if you plan to let the house sit empty for a while, you’ll want to keep the water and lights on. Other services, such as a home phone, might be fine to disconnect.
- Paying any relevant bills or taxes such as property tax, estate tax, or mortgage payments. Federal (and potentially state) inheritance taxes can become complicated, so you might want to contact an estate attorney.
- Hiring maintenance services. If you plan to leave the house empty, you’ll likely need to hire landscapers to keep the yard from falling into disrepair.
Taking care of these fundamental concerns gives you more time to figure out your long-term goals.
Assess the Contents of the Estate
Unless you plan to keep everything inside the house, you’ll likely want a professional appraisal, which determines the real-world value of each item. A professional appraisal is helpful in several situations:
- If you’re unfamiliar with the estate’s contents – A professional appraisal helps you understand what you’ve inherited and it’s worth.
- If you know you want to sell everything– A professional appraisal helps you set fair prices.
- If you want to sell the house and its contents together (known as a turnkey sale) – The estate’s appraised value is combined with the value of the home to determine the total sale price.
- If you want to sell some items but keep others – A professional estate appraisal will identify any potential hidden treasures and other valuables.
- If you want to donate the items to charity – The IRS requires a professional appraisal for all noncash donations over $5,000.
Essentially, a professional appraisal gives you a comprehensive overview of what you’ve inherited. Understanding what you own, and what it’s potentially worth, helps you decide what you want to do next.
What to Look for When Hiring an Estate Appraisal Service
If you’re like most people, you’ve probably never hired an estate appraisal service before, so you’re not sure what qualities separate a top-of-the-line company from the rest. Look for the following:
The company should have both broad and deep expertise. They’ll need to be familiar with a wide range of household items, including antiques, clothing, kitchenware, electronics, artwork, appliances, vehicles, and more.
They should offer transparent and upfront pricing. Typically, if you want appraisal services only, you’ll be charged a flat rate based on the number of items. However, if you want the items appraised and sold, the company might charge you a percentage of the total sales, in which case you’ll pay nothing upfront.
The Uniform Standards of Professional Appraisal Practice guidelines were established by Congress. They detail standards for appraisals used in various legal and financial settings, such as when claiming the value of an item on your taxes or during divorce proceedings. Only work with a company that can provide you with USPAP-compliant appraisals.
How Estate Appraisals Work
The appraisers, either an individual or a group, will arrive at your location. They’ll examine the items and take photographs. Depending on the size of the estate, the process could take a few hours or even a full day or two.
Next, they’ll prepare the appraisal report, conducting additional research as necessary. It’s often helpful to use a local appraiser with ties to a national network of appraisers, so they can contact experts in antiques, collectibles, and other niche items.
When the appraisal is completed, the company will send you a digitally bound appraisal document. Arranged by categories, it details each type of item, its value, and other relevant information such as its dimensions, history, and more. The value is based on real prices that similar items have sold for recently.
Another option is an online appraisal. Some companies allow you to email digital images of items for an evaluation. While it’s a quick and easy way to understand the basic value of any specialized items, such as antiques or collectibles, a virtual appraisal isn’t USPAP-complaint.
After the Appraisal
Once you’ve received the appraisal document and understand what the items in question are worth, what should you do next? Assuming you don’t want to keep everything, you have a few options:
Many appraisal services offer estate sale services, where they’ll run the entire event for a percentage of the profits. An established, local company will know how to reach people throughout your city, so you’ll likely sell a bulk of the items. It’s an excellent option if you want to get rid of a large number of household items.
You can also hold an estate sale yourself. With a self-run sale, you get to keep 100% of the profits, although it also involves far more work. Plus, you likely won’t have the capability of reaching a large network of buyers in the way an estate sale company can.
With a USPAP-compliant appraisal, you can donate the items to charity and maximize your donation. Plus, you’re protected against any potential financial penalties.
A whole-house appraisal is a key component in a turnkey sale, which is when you sell both the house and its contents together. If you’re planning on a turnkey sale, hire an estate company with experience working with realtors and other relevant parties.
Inheriting an estate can feel more like a confusing obligation than a financial windfall. Before making any major decisions about what to do with the estate, first have it appraised by professionals. Information about the total value of the items can help you decide whether you want to keep them, sell them, donate them, or take some other action.
When choosing an appraisal or estate sale company, look for experience, transparency, and a commitment to customer care. For more information about USPAP-certified appraisals, online appraisals, and estate sales, contact Prestige Estate Services today.