Home Selling in Delray Beach>Question Details

Trustee, Both Buyer and Seller in Delray Beach, FL

Will a CMA be sufficient to determine a fair price for the half share in condo inherited by family members? One sibling wants to buy out other.

Asked by Trustee, Delray Beach, FL Fri Nov 19, 2010

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Dear Trustee,

I agree that a full appraisal is the most accurate and as a Trustee you have a fiduciary duty to the beneficiaries of the trust.

Also beneficiaries may ultimately come back at you if you used a mere Realtor price opinion to determine value.

You may also want to deduct the normal selling costs associated with an arms length transaction. You may want to split the costs between the buyer and seller so that neither has an advantage. In other words, if it were just sold outright (the best course of action to avoid any future problems) the net amount would be about 10% less than the sale price. It would be unfair to allocate that entire 10% to the buyer or seller so why not split it in half and reduce the price by 5%. Both will gain equally.

Hope this helps.
Alma
1 vote Thank Flag Link Fri Nov 19, 2010
In response to the property being purchased with no mortgage, and some needed repairs and paint:

I would definitely go with an appraiser. The reason for this is that a CMA is very subjective to each individual Realtor and their opinion. Appraisers have more of a definitive line to follow, and there is much less personal opinion involved. Yes, an appraisal will cost money, and a CMA is generally free. In this world you do get what you pay for, and if there are 10's of thousands of dollars at stake, isn't a few hundred bucks a good investment to protect everyone involved?

This is also why 2-3 CMAs are being recommended... they are not as reliable. Would you average the 3, or go with the highest one? The messed up thing is that the correct answer will differ in EVERY situation. Be safe, and go with an appraisal.

Best wishes,
Kevin
1 vote Thank Flag Link Fri Nov 19, 2010
In your case I would do a full blown appraisal, and not just a CMA. There is a reason banks use appraisals and not CMAs when approving a loan. This is just my opinion.
1 vote Thank Flag Link Fri Nov 19, 2010
CMA does not provide value; it is an analysis that provides range of values. If you decide to use an appraiser make sure that he/she is local and knows the area very well. Appraiser who works multiple counties will not provide accurate value for you. You would be better off asking a Broker Price Opinion from an experienced Local broker with proven record of completing BPOs in your area.
0 votes Thank Flag Link Sun Sep 30, 2012
Look at Alma Rose's answer, she pretty much covers it... But definitely use a certified area appraiser, and may be more than one to satisfy everyone and your legal duties as the trustee.
Good Luck!
Sincerely yours,'
Edith Your Chicago Connection & Your Realtor 4Life!
Working always in the very BEST interest of her clients
0 votes Thank Flag Link Sat Nov 20, 2010
Trustee,

I have seen so many bad appraisals lately you need to ensure you are using one very familiar with the area. I utilize a unique property evaluation system and would be happy to put together a complimentary analysis for you. It will probably be sufficient for your needs. Please contact me at your convenience if you are interested.

Always at Your Service,

Tom Priester e-PRO
Web Reference: http://www.tompriester.com
0 votes Thank Flag Link Fri Nov 19, 2010
I would definitely use a certified appraiser. CMA's are great for pricing a home as it is an estimate of current market value. It should not be used for the purpose of a sale and cannot be used when a mortgage is involved. Both parties would be wise to have a certified appraisal to avoid any problems.
0 votes Thank Flag Link Fri Nov 19, 2010
I have to agree with the answer posted below. I would find an appraiser that is not someone any of the interested parties knows, and have a full appraisal done. A CMA, while accurate, does not carry the "weight" of an appraisal. Let the party being bought out choose the appraiser this way they can not claim later that the appraiser was unduely influenced. Once this is complete, the rest is simple. Just be sure everything is done by the book as this has a high likelihood of being contested, and possibly litigated, in the future.
0 votes Thank Flag Link Fri Nov 19, 2010
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