Date of Death Appraisal in California: What Heirs Need to Know
A date of death appraisal is a professional estimate of what a property was worth on the day its owner passed away. If you’ve inherited a house in California, this one number can affect your taxes, how the estate is divided, and what paperwork the court or trustee needs. It’s worth getting right.
We’ve been buying houses in California since 2003, and we’ve bought more than 100 inherited and probate homes. We’re not appraisers, attorneys, or tax advisors, so please confirm the details with your estate attorney, a tax professional, and a licensed appraiser. Here’s a plain-English overview.
What Is a Date of Death Appraisal?
It’s an appraisal with one twist: instead of valuing the home as of today, the appraiser estimates its fair market value as of the date of death. That’s why it’s sometimes called a retrospective appraisal. The appraiser looks at comparable sales from around that date and the home’s condition at that time.
It can be done right away or months (even years) later. The longer you wait, the harder it can be to document the home’s condition back then.
Why Heirs Need One
1. Capital gains taxes (the step-up in basis)
For federal tax purposes, an inherited home’s tax basis generally “steps up” to its fair market value on the date of death. If you sell soon after for about that value, there may be little or no taxable gain. The date of death appraisal is often the key piece of evidence for that number. Our article on the tax consequences of selling an inherited house explains the step-up in more detail.
2. Probate or trust paperwork
Executors and trustees need to know what the estate is worth to report it, pay debts, and account to the beneficiaries.
3. Dividing the estate fairly
When one sibling keeps the house and others receive cash, or the house is split among several heirs, a neutral value helps everyone agree on what’s fair.
4. Estate taxes and property taxes
Very large estates may need values for a federal estate tax return. California has no state inheritance or estate tax. For property taxes, whether the home gets reassessed after a parent-child transfer depends on Prop 19, where the home’s value can also matter. Our guide to Prop 19 for inherited homes covers that.
Who Does the Appraisal in California?
It depends on how the house is passing to the heirs.
If the estate is in probate
In a California probate, the personal representative (executor or administrator) files an Inventory and Appraisal with the court (Judicial Council form DE-160). Real estate is generally valued by a probate referee, an appraiser appointed by the court, rather than by an appraiser you pick. Your probate attorney will handle this step. Our guide on how long probate takes in California explains where it fits in the timeline.
If the house is in a living trust
There’s no court or probate referee. The trustee typically hires a licensed appraiser (California appraisers are licensed through the Bureau of Real Estate Appraisers) to prepare a date of death appraisal for the trust’s records and the beneficiaries’ tax basis.
If the house passed another way
For a transfer on death deed, joint tenancy, or other non-probate transfer, heirs often hire their own licensed appraiser for tax records. A tax professional can tell you whether you need one and how detailed it should be.
How to Get a Good Date of Death Appraisal
- Hire a licensed appraiser with experience in estate and retrospective work in your area.
- Document the condition early. Take photos and notes of the house before any cleanout, repairs, or improvements. Appraisers need to know what it looked like on the date of death.
- Share known problems like a leaking roof, foundation issues, or outdated systems. These affect value.
- Keep the report with your estate and tax records. You may need it years later.
What if you sell soon after?
If the home sells to an unrelated buyer fairly soon after the death, the sale price may also be strong evidence of value. Your tax professional can tell you how to use the appraisal and the sale price together.
An Offer Isn’t an Appraisal
Heirs sometimes ask us whether a cash offer can stand in for an appraisal. It can’t. An as-is cash offer reflects what a buyer will pay today, after repairs, holding costs, and resale costs are factored in. A date of death appraisal estimates fair market value on a past date, which is what the tax rules and the court generally look for. Many families get both: the appraisal for the records, and offers to compare their options for selling.
When a Cash Sale Isn’t the Best Option
If the inherited home is in good condition and the heirs have time, listing it with a good agent will often bring a higher price. If one heir wants to keep the house and can buy out the others, that may be the better path. A cash sale tends to make the most sense when the home needs a lot of work, the heirs live out of the area, or the family wants a simple, quick finish. Our complete guide to selling an inherited house in California walks through all the options.
Frequently Asked Questions
It’s a professional estimate of a property’s fair market value as of the day the owner died. It’s often used to set the heirs’ tax basis, value the estate for probate or trust purposes, and divide property fairly.
Not always to sell, but it’s often important for taxes and estate records. It helps document the stepped-up tax basis, which can reduce capital gains tax when you sell. Ask your tax professional.
In a California probate, real estate is generally appraised by a court-appointed probate referee as part of the Inventory and Appraisal. Your probate attorney typically coordinates this.
Yes. Appraisers can do retrospective appraisals for a past date. It’s easier and more accurate when you have photos and records of the home’s condition at the time of death.
It varies by appraiser, property type, and location. Ask a few licensed appraisers for quotes. In probate, the probate referee’s fee is set by California law and paid by the estate.
Talk to Someone Who’s Done This Before
If you’ve inherited a house and want to understand your options, we’re happy to talk it through and give you an honest, no-obligation cash offer you can compare with listing or keeping the home. Out-of-state heirs can usually sell without coming to California. Call Lawrence at (510) 824-8710 or fill out the form below.