Should I get a full appraisal or just a CMA to price an inherited lakefront home?

For a property like this, I would start with a few strong local CMAs before paying for a formal appraisal. A lakefront property that's outdated or potentially a teardown can be difficult to value because the land, waterfront access, views, lot characteristics, and redevelopment potential may be more important than the existing house. A local agent who regularly sells lakefront properties can analyze recent sales and make adjustments for those unique features. I'd interview two or three agents who have actual experience with waterfront properties in that specific area and ask each one to explain how they arrived at their recommended price. Don't be surprised if their opinions differ—that can actually give you useful information about the range of possible values. A formal appraisal can still be worthwhile if the property is particularly unusual or if you need an independent valuation for estate, tax, or other purposes. But an appraisal and a CMA serve different purposes: an appraisal is an independent valuation, while a CMA is primarily a pricing and marketing tool based on current market activity. For listing purposes, I'd want to understand **what buyers are actually willing to pay for the land and waterfront characteristics**, rather than simply anchoring to the $900,000 homes nearby. Juan Picos Real Estate Agent JohnHart Real Estate

Wendell, this is personal preference depending on your situation. If you are the only heir then you have the sole decision, but if there are others an appraisal is wise just in case of court requirements or challenges to the value. Keith Jean-Pierre Managing Principal The Dapper Agents Real Estate Operations in ALL 50 States

Wendell, you need two different valuations here, and one report will not do both jobs. Hannah and Alla have the core of it right, so I will build on theirs rather than repeat it. What I want to add is that the date of death appraisal and the pricing appraisal are two separate assignments with two different effective dates, and appraisers do not hand you both unless you ask. The basis appraisal is a retrospective appraisal. Its effective date is the day the owner died, not today, and a competent appraiser reconstructs that market from sales around that date. You can still order it now even if time has passed. What you cannot do is hand the IRS a current-value report and call it a date of death value. When you order it, use the words retrospective appraisal, effective date of death, for estate basis purposes, so the assignment is written correctly from the start. On pricing, Alla is right that you are selling the dirt. The practical follow-on is that you should ask for a land value conclusion in writing. If there are vacant lot sales on your lake, that is straightforward. If there are not, the method is extraction: take improved sales, subtract the depreciated value of the structures, and what is left is what the dirt sold for. Ask any appraiser or agent directly whether they will give you a land value conclusion. Many will not unless you ask, because it is more work. Two practical things. Frontage is your unit of comparison, and the part people miss is that it does not scale in a straight line. Twice the feet is not twice the value, and price per front foot has to be adjusted for shoreline condition, water depth at the dock, bottom type, exposure and view. Get a demolition bid before you list. A builder is going to subtract that number whether or not you know what it is, and it is much better to hold a real bid than to let a buyer invent one for you. If the house still has any use as a rental or a cabin during a build, quantify that too, because it changes who your buyer is. On picking the local agent, I would add one filter to what Hannah and Alla said. Ask each of them to show you the last three lot or teardown sales they personally closed on that water. Anyone who has really done it will have those numbers ready. I work in California, so I am not the person to price a southeast Michigan lake and I would rather say that than guess. What I can do is find you the right one. Tell me which lake and I will connect you with an agent who actually sells that shoreline and will give you a land value conclusion rather than an improved comp grid with a discount on the end. My name is Zoltan Peresztegi, and I am a real estate professional and not a CPA, so confirm the basis and reporting side with whoever is preparing the estate's returns before you rely on it. Zoltan

Wendell, you need two different valuations here, and one report will not do both jobs. Hannah and Alla have the core of it right, so I will build on theirs rather than repeat it. What I want to add is that the date of death appraisal and the pricing appraisal are two separate assignments with two different effective dates, and appraisers do not hand you both unless you ask. The basis appraisal is a retrospective appraisal. Its effective date is the day the owner died, not today, and a competent appraiser reconstructs that market from sales around that date. You can still order it now even if time has passed. What you cannot do is hand the IRS a current-value report and call it a date of death value. When you order it, use the words retrospective appraisal, effective date of death, for estate basis purposes, so the assignment is written correctly from the start. On pricing, Alla is right that you are selling the dirt. The practical follow-on is that you should ask for a land value conclusion in writing. If there are vacant lot sales on your lake, that is straightforward. If there are not, the method is extraction: take improved sales, subtract the depreciated value of the structures, and what is left is what the dirt sold for. Ask any appraiser or agent directly whether they will give you a land value conclusion. Many will not unless you ask, because it is more work. Two practical things. Frontage is your unit of comparison, and the part people miss is that it does not scale in a straight line. Twice the feet is not twice the value, and price per front foot has to be adjusted for shoreline condition, water depth at the dock, bottom type, exposure and view. Get a demolition bid before you list. A builder is going to subtract that number whether or not you know what it is, and it is much better to hold a real bid than to let a buyer invent one for you. If the house still has any use as a rental or a cabin during a build, quantify that too, because it changes who your buyer is. On picking the local agent, I would add one filter to what Hannah and Alla said. Ask each of them to show you the last three lot or teardown sales they personally closed on that water. Anyone who has really done it will have those numbers ready. I work in California, so I am not the person to price a southeast Michigan lake and I would rather say that than guess. My name is Zoltan Peresztegi, and I am a real estate professional and not a CPA, so confirm the basis and reporting side with whoever is preparing the estate's returns before you rely on it. Zoltan

Both, Wendell, but they do different jobs and I'd lean on the CMAs for your list price. On a place that's realistically a teardown, what you're actually selling is the frontage and the lot, so the number that matters is what a builder or a cash buyer pays for the dirt. Agents who work that lake carry those figures in their heads. An appraiser pulling closed sales can end up crediting the old house with value it doesn't have, or reaching for comps that aren't even on water. Where the formal appraisal earns its fee is the estate side, setting a defensible value as of the date you inherited it. That one is worth a call to a CPA or an estate attorney rather than a guess from me. Being ringed by $900k homes is context, not your price. I'm licensed in California, so let a Howell area agent who actually sells that shoreline confirm the local details. Alla Novytska, Realtor®, JohnHart Real Estate, DRE #02254775

I’d do both, but I’d use the CMA as the primary tool for determining the listing price and the formal appraisal as a supporting benchmark. Because this is a lakefront property that may be more valuable as a teardown/lot than as an existing home, I’d get 2–3 CMAs from agents who specifically sell on that lake or comparable nearby lakes and ask them to determine the as-is value and land/teardown value, not the value of a renovated home. A formal appraisal can be especially useful if you need a defensible value for the estate or tax purposes, but make sure the appraiser understands that the existing structure may have little value and analyzes the property’s highest and best use. I wouldn’t simply base the price on the $900K neighboring homes because those properties may be significantly different in condition, improvements, lot size, or waterfront characteristics. If the CMA and appraisal come in close, you’ll have a strong pricing range; if they’re far apart, that’s when I’d dig deeper into the comps.

As an agent specializing in Texas lakefront properties, here is how things look from my neck of the woods. If the estate has not yet settled or you recently inherited the home, paying for a formal, licensed appraisal is almost essential for tax purposes. An appraisal establishes a defensible "date-of-death" fair market value for your stepped-up basis, which protects you from massive federal capital gains taxes when you sell. However, when it strictly comes to setting an asking price for the MLS, a formal appraisal is often far less helpful than you might think. Appraisers are legally constrained by rigid lending guidelines; they look backward at closed sales with square-footage formulas and grid adjustments that frequently fail to capture the nuances of high-end lakefront land, shoreline frontage, and builder demand. Because the home is likely a teardown surrounded by $900k properties, your true value is in the dirt, not the structure. You are primarily selling a building site, lake frontage, and a footprint that allows a buyer or luxury spec builder to bypass newer zoning or setback restrictions. A general appraiser might overvalue the dilapidated structure while undervaluing the raw dirt, or pull non-lake comps simply to find similar square footage, giving you a distorted number. The smarter listing move is to interview two or three top-producing, hyper-local real estate agents who specialize exclusively in that specific lake. Have them prepare comprehensive Comparative Market Analyses (CMAs) focused on lot value and recent tear-down sales. Ask them specifically: “What is the dirt worth to a custom builder, what are teardowns on this shoreline selling for, and what are the holding costs versus marketing it as a fixer-upper?” A true local lakefront specialist has their ear to the ground with the builders and cash investors actively shopping that lake. They will price it to spark a bidding war among buyers who want the lot, rather than tying your hands to a rigid bank-style appraisal that buyers and builders won't care about anyway. Use the formal appraisal to protect yourself from the IRS but trust local lakefront brokers to price it for the open market.

As an agent specializing in Texas lakefront properties, here is how things look from my neck of the woods. If the estate has not yet settled or you recently inherited the home, paying for a formal, licensed appraisal is almost essential for tax purposes. An appraisal establishes a defensible "date-of-death" fair market value for your stepped-up basis, which protects you from massive federal capital gains taxes when you sell. However, when it strictly comes to setting an asking price for the MLS, a formal appraisal is often far less helpful than you might think. Appraisers are legally constrained by rigid lending guidelines; they look backward at closed sales with square-footage formulas and grid adjustments that frequently fail to capture the nuances of high-end lakefront land, shoreline frontage, and builder demand. Because the home is likely a teardown surrounded by $900k properties, your true value is in the dirt, not the structure. You are primarily selling a building site, lake frontage, and a footprint that allows a buyer or luxury spec builder to bypass newer zoning or setback restrictions. A general appraiser might overvalue the dilapidated structure while undervaluing the raw dirt, or pull non-lake comps simply to find similar square footage, giving you a distorted number. The smarter listing move is to interview two or three top-producing, hyper-local real estate agents who specialize exclusively in that specific lake. Have them prepare comprehensive Comparative Market Analyses (CMAs) focused on lot value and recent tear-down sales. Ask them specifically: “What is the dirt worth to a custom builder, what are teardowns on this shoreline selling for, and what are the holding costs versus marketing it as a fixer-upper?” A true local lakefront specialist has their ear to the ground with the builders and cash investors actively shopping that lake. They will price it to spark a bidding war among buyers who want the lot, rather than tying your hands to a rigid bank-style appraisal that buyers and builders won't care about anyway. Use the formal appraisal to protect yourself from the IRS but trust local lakefront brokers to price it for the open market.