By Frederick Blum, Broker/Owner of Blum Realty Group
When a family inherits a San Diego home, several different numbers can quickly become “what the house is worth.” There may be a date-of-death appraisal, a tax assessment, an online estimate, a relative’s expectation and a real estate agent’s proposed asking price. They answer different questions. The first step toward a sound sale is to separate them.
For an executor, administrator or trustee preparing to sell, I would build the pricing decision around the home’s current condition, relevant closed sales, competing properties and the estate’s actual sale requirements. Then I would document why the selected price and preparation plan make sense. That gives the person responsible for the sale a clearer decision and gives the family something more useful than competing opinions.
An appraisal, an asking price and net proceeds are different numbers
Date-of-death value looks backward to a particular valuation date. It can be important to estate administration and tax basis. The California State Controller describes the role of probate referees in appraising estate property; the court’s Inventory and Appraisal form is part of that administration process. The fact that an appraisal was completed recently does not necessarily mean its valuation date is today.
Current market value and a broker’s comparative market analysis address what buyers are likely to pay now, using relevant sales and the property’s present characteristics. A CMA is not a substitute for an appraisal required by the estate, court or tax process. It serves the sale decision: where to position the home, which competing properties matter and what different preparation choices may accomplish.
The asking price is a marketing decision. It should be supported by the evidence, but it is not a promise that a buyer will pay it. A high starting price does not preserve value if the home then sits while the estate pays carrying costs.
The property-tax assessment answers another question. It is not automatically current market value or the family’s income-tax basis. And net proceeds are what remain after the sale’s expenses, payoffs and other applicable obligations. A home can sell for an impressive headline price while producing a disappointing net.
Inherited-property basis generally starts with fair market value at the date of death, or an alternate valuation date when properly elected, subject to the applicable rules and later adjustments. The IRS inherited-property guidance explains that framework. Retain the valuation and supporting records, and have the estate’s tax professional determine the actual basis and tax treatment. The mortgage payoff is a cash-flow item; it does not, by itself, determine the property’s tax basis.
One home, three valuations: put the date beside the number
Suppose an inherited home has the following records, all addressing the same ownership interest. Every date and amount in this example is hypothetical.
| Record | Effective date and value | Question it answers |
|---|---|---|
| Date-of-death appraisal | January 15: $900,000 | What was the appraised interest worth on the valuation date used for the estate’s records? The tax professional separately determines the applicable basis and tax treatment. |
| Broker’s current market analysis | September 1: a supported range of $850,000–$875,000 | Where does the home fit among relevant sales and current competition, given its present condition and the proposed sale plan? |
| Buyer’s lender appraisal | September 20: $860,000 | What opinion of value is the buyer’s lender using in its review of the proposed mortgage? |
Now suppose the representative receives an $865,000 offer. It falls within the current broker analysis but below the earlier $900,000 appraisal. Start with the evidence behind the difference: valuation dates, comparable sales, the interest appraised, the condition considered and any assumptions in the reports. A difference alone does not tell the family that either professional made an error or that the representative should reject the offer. An offer above the earlier appraisal needs the same current-market and transaction review.
For a sale requiring court confirmation, the legal team must also address the specific appraisal and price requirements discussed below. A current broker recommendation does not replace a required appraisal or establish that the court can confirm the offer.
The buyer’s $860,000 appraisal introduces a separate financing question. The CFPB explains that a lender may obtain an appraisal or use another method to evaluate the property. Ask the buyer’s lender and representatives how the result affects the proposed loan and contract. Do not assume the $5,000 difference requires a particular price reduction or that borrower preapproval has resolved it.
Likewise, subtracting the $865,000 offer from the earlier $900,000 value does not, by itself, establish a deductible $35,000 tax loss. The IRS inherited-property guidance starts with determining the applicable basis. Have the tax professional calculate the actual result using the ownership, use, transaction and basis records. Keep that work separate from the broker’s asking-price recommendation and escrow’s cash-proceeds estimate.
For the property file, put each valuation on a separate line with its purpose, effective date, preparer and supporting report. Record the proposed asking or contract price alongside them, together with the current market evidence and required approvals. That gives the family a clear explanation of how the sale recommendation was reached without forcing every number to match.
Match the home before you borrow another home’s price
A useful San Diego pricing analysis starts close to the subject property, then expands only for a reason. The nearest sale is not always the best comparable. Housing type, legal living area, lot utility, condition, parking, views, location and association obligations can make two nearby homes appeal to different buyers.
For example, a remodeled home with permitted additional space should not establish the value of a similar-looking property whose extra room has unresolved permit questions. A canyon-facing lot and a lot exposed to a busy road may need different treatment. A condo with an assessment or a project-financing problem cannot be compared only by square footage with a nearby building that lacks those issues.
I would sort the evidence into three groups:
- Closed sales: the best evidence of completed transactions, with attention to timing, condition and any available concession information.
- Pending properties: evidence of what has attracted agreement, while recognizing that the final price and terms may not yet be known.
- Active competition: the alternatives today’s buyers can choose. An asking price describes the seller’s position, not a completed sale.
Then I would explain the differences rather than apply a single neighborhood price per square foot. A larger home often has a different per-square-foot relationship from a smaller one. An online estimate also cannot reliably inspect deferred maintenance, verify an addition or read the estate’s sale conditions. Use it as a question to investigate, not the answer to defend.
Family memories belong in the conversation, but they need to be separated from market evidence. If someone believes the home should bring substantially more, identify the comparable sales and assumptions behind that view. The useful response is to test those assumptions together.
Compare the as-is result with a specific preparation plan
“Sell as-is” and “renovate everything” are usually too broad to be useful choices. Price at least two defined versions of the sale: the home in its current condition with ordinary access and presentation work, and the home after a limited, costed preparation plan. If a larger renovation is proposed, give it its own budget, timeline and resale assumptions.
Start with information buyers will need: condition, available permit records, known defects, major systems, occupancy and any association documents. Secure appropriate property insurance and a plan for utilities, access and basic maintenance while the home is held. A vacant property still creates expenses and practical responsibilities.
Cleaning, removing personal property, improving access and addressing a small number of obvious issues may make a home easier to evaluate. More extensive work should earn its place in the plan. Obtain a written scope and credible cost estimate, allow for carrying time and ask whether the expected sale-price improvement leaves the estate better off after those costs.
If the evidence supports an $850,000 sale as-is and a $890,000 sale after $30,000 of work, the apparent $40,000 improvement is not a $40,000 gain. Before considering extra sale expenses, financing or risk, the work has used $30,000 of it. Additional carrying costs and a lower-than-expected resale result can absorb the rest. These figures are illustrative; the decision needs property-specific bids and comparable sales.
Our probate-home repair guide explores how to make that preparation choice without turning the estate into an open-ended renovation project.
The 90% appraisal rule is a specific court-confirmation rule
For private sales requiring court confirmation, California Probate Code section 10309 generally requires both an appraisal and its valuation date to fall within the year before the confirmation hearing, and the offer to be at least 90% of that appraised value. The statute includes an exception and provisions for a new appraisal.
That is not a universal rule that every inherited property must be listed at 90% of an old appraisal. It is also not a recommendation to accept the minimum qualifying price. A trust sale, a sale under independent-administration authority and a court-confirmed probate sale can follow different procedures. Have the estate’s attorney identify the applicable authority and requirements before setting contract terms or promising a closing date.
If current market evidence is materially below a relevant appraisal, address the mismatch with the estate’s legal and valuation team. Section 10309 expressly contemplates a new appraisal in specified circumstances, including when the court is satisfied the latest appraisal is too high or too low. Quietly using an outdated value, or assuming an appraisal can never be revisited, does not solve the sale problem.
Our guide to when an executor can list and sell covers the authority questions. Keep that decision connected to pricing, because a buyer’s required timeline and the estate’s actual process need to fit.
Compare offers by their likely net result and ability to close
Request a written estimated net sheet for each serious proposal. It should use the actual proposed price, negotiated compensation, escrow and title estimates, transfer charges, credits, payoffs, prorations and other applicable expenses. Separate estimates from confirmed amounts, and update them as information changes. Our seller closing-cost guide explains the main categories.
As a simple cash example, a $900,000 sale less $55,000 in estimated sale expenses and credits and a $250,000 mortgage payoff leaves $595,000 before other estate obligations and applicable taxes. A $920,000 offer with $80,000 of sale expenses and credits leaves $590,000 after the same payoff. The larger headline offer produces $5,000 less in that example.
Timing and execution also have value. Compare financing, proof of funds, contingencies, inspection requests, required approvals, possession and the proposed closing schedule. A cash offer may reduce one financing issue while still leaving inspection, title or authority conditions. Read the actual terms rather than assuming a label guarantees certainty.
For an estate supporting a vacant home, add a carrying-cost estimate for delay: interest, insurance, taxes, dues, utilities and required upkeep. Do not confuse the entire mortgage payment with an expense if part reduces principal. The point is to understand the cost of waiting and weigh it against the realistic prospect of a better result.
Write down the pricing decision and when you will revisit it
- Confirm the decision-maker and sale authority. Identify who may authorize the listing, preparation spending, price changes and acceptance of an offer.
- Document the property’s starting condition. Preserve photographs, relevant disclosures, available records and the reasons for the preparation choice.
- Prepare a supported price range. Keep the comparable sales, differences, current competition and assumptions behind the recommendation.
- Choose a launch strategy. Agree on the asking price, presentation, access plan and how offers will be compared.
- Set a review point. Review buyer activity, showing feedback, new competition and new closings together. Decide whether the issue is exposure, access, condition, price or terms before changing the plan.
- Keep a clear decision record. Save estimates, offers, material feedback and authorized changes so the family and estate team can follow what happened.
With Blum Realty Group, my role is to make the property analysis and sale execution understandable: realistic pricing, useful preparation choices, careful offer comparison and coordination with the people handling the estate. If you are managing the property from elsewhere, the out-of-state executor guide also covers access and local coordination. The goal is a sale supported by evidence and a process the responsible person can explain.
Common inherited-home pricing questions
Do we have to list the home at its date-of-death appraised value?
Not automatically. That appraisal addresses a particular valuation date and purpose. The asking price should reflect current market evidence, while the estate’s attorney identifies any sale-authority or court-confirmation requirements that apply.
Does every probate or trust sale require 90% of appraised value?
No. Probate Code section 10309 sets requirements for specified private sales requiring court confirmation. The applicable process must be identified for the particular estate or trust before applying that rule.
What should an executor request from a real estate broker before pricing?
Request relevant comparable sales, an explanation of property differences, current competing listings, a condition and preparation comparison, estimated net proceeds and a written plan for reviewing market response. Keep the recommendation connected to the estate’s actual sale authority and timeline.