To understand how houses are rated, you need to begin with a clear definition of "market value." In real estate terms, market value is the price at which something can be freely bought and sold within a reasonable period of time. The concept refers to the conditions necessary for a fair sale, meaning the buyer and seller are acting wisely and knowledgeably, and the price is not affected by any artificial stimulus. A reasonable time in real estate parlance generally means between one to three months.

Why is This Important?

Key Points in Determining Home Value

• Site characteristics -Is your home in a desirable neighborhood with good schools? Is public transportation available? How accessible is the nearest shopping by car as well as other means of transportation?
• Design and appeal characteristics -Is the layout designed for convenience? Does the house have curb appeal, meaning, is it attractive when viewed from the street?
• Construction quality -Was the original construction of high quality?
• Age and condition -If it is an old house, has it been properly maintained? Are there visible problems with the roof, siding, etc? Is the outside in need of a coat of paint?
• Improvements -Have you remodeled the kitchen or bathroom or added extra rooms?
• Amenities -Is there a deck, swimming pool or other special features? Is the backyard large enough to be used for parties and barbecues?

  Other Important Aspects

  Another yardstick for measuring market value many realtors recommend is calculating the price per square foot. The method most commonly used is to divide the amount of livable square feet into the house's latest appraised price. You can usually find the appraisal price from a property tax bill. Next, compare your result with the price per square foot of some of the homes that were recently sold in your area. You want to ensure that the price per square foot is in line with the neighborhood norm.

  Finally, current market conditions are an important consideration. Real estate prices rise and fall regardless of the quality of the individual properties. Interest rates, the state of the economy and the local job market are all factors that affect the market value of homes in a particular area. When the market is down because of negative influences, such as high unemployment, the market value of your house can be lower than you think. Conversely, when the economy is booming, home values can go through the roof.
  
  Bottom line: Whether your plans include selling your home, refinancing it, or just protecting your investment with adequate insurance, periodically reevaluate what your house is worth on the open market. Knowing what your home is really worth can be a valuable financial planning tool to help you deal with future events as life unfolds.

The distribution rules for inherited IRAs generally make it advantageous to have separate accounts, which can be done during your lifetime or by December 31 of the year following your death. If you plan to leave an individual retirement account (IRA) balance to several beneficiaries, consider splitting each beneficiary's share into a separate account during your life. Why is it so important to have separate accounts?

Your spouse has more alternatives available if he/she is the sole beneficiary. A surviving spouse can roll over the IRA to an IRA in his/her name or treat your IRA as his/her IRA. With the rollover IRA, the surviving spouse can name his/her own beneficiaries, thus extending the IRA's life, and can defer payouts until age 70 1/2. However, to roll over the IRA, the surviving spouse must be the sole beneficiary.

When there is more than one non-spouse beneficiary for an inherited IRA, distributions must be taken over the oldest beneficiary's life expectancy. By splitting the IRA into separate accounts, each beneficiary can take distributions based on his/her life expectancy.

Separating accounts is especially important when one of the beneficiaries is not an individual or qualifying trust, such as a charitable organization. If you die before required distributions must begin at age 70 1/2, then the entire balance must be paid out in five years. If you die after required distributions begin, then the balance can be paid out over your remaining life expectancy. When the account is split, the individual beneficiary can take distributions over his/her life expectancy.

An important estate planning strategy for inherited IRAs is the ability to disclaim all or a portion of the IRA. If a beneficiary disclaims an IRA within nine months of the decedent's death, the disclaimed IRA is not considered a gift and would then go to the contingent beneficiary. By splitting the IRA into separate accounts, you can better control what would happen if each beneficiary disclaims his/her share. For instance, your beneficiaries might be your two children, with your grandchildren named as contingent beneficiaries. With separate accounts, each child could decide whether to disclaim the IRA, knowing the proceeds would then go only to their children.

From an administrative standpoint, it is often easier to have only one IRA rather than several. But with separate accounts, you can ensure that your IRA is set up to work to the best advantage of your beneficiaries.