Do we need an appraisal when we inherit a house?
Get a date-of-death appraisal. One number does two jobs: it's the basis for dividing the estate fairly, and it's the stepped-up basis the IRS uses when the house eventually sells.
Both jobs punish a sloppy number. Value the house too low and the heirs inherit phantom capital gains — tax on growth that happened before they ever owned it. Lean on a website's estimate and you've got nothing defensible for the siblings or the auditor. A licensed appraiser can value the home as of the date of death even if you order the work months later — that's routine. And if the house sells soon after, the sale price itself becomes strong evidence of value. Keep every page of this paper trail. Your CPA and attorney will both want it; I'm neither, and this isn't tax or legal advice.
I keep a short list of appraisers who do estate work well and gently. Ask, and I'll connect you this week.
I wrote this answer, and I stand behind it. I'm Chris Deutsch, a Minneapolis Realtor (MN #20382264). Twenty-five years of walking these neighborhoods, checking basements, and sitting across kitchen tables from people making exactly this call. I re-check every answer and date it — this one was last verified .
If your situation is more specific than the market, that's the one worth talking through. Email me at chris@lakesarearealty.com.