Does a Home Appraisal Value Change Frequently?
Got an email this past week with the following question:
"The appraisal on our home - does the value change weekly or monthly?"
When an appraisal is completed it is for a specific date known as the effective date of the appraisal. This is typically the date of the inspection of the home or property.
However, in certain circumstances it can be for a date in the past (retrospective appraisal) or in the future (prospective appraisal).
In the case of a retrospective appraisal it can be for an estate settlement in which an owner has passed away and for tax purposes they need an appraisal with an opinion of value as of the date of death. Another circumstance where we have conducted retrospective appraisals in the case of a divorce where the court wants to know what a property was worth as of the date of marriage when one of the parties owned said property prior to getting married.
Prospective appraisals are most often completed for commercial properties. For instance, if a developer is proposing a new apartment complex or office building, the bank and or investors would likely want to know what the value would be when it is completed which would be a future date.
This is different from a new construction home which employs a hypothetical condition (The Uniform Standards of Professional Appraisal Practice (USPAP) defines a hypothetical condition as: “A condition, directly related to a specific assignment, which is contrary to what is known by the appraiser to exist on the effective date of the assignment results, but is used for the purpose of analysis.”.) to provide a value as of the effective date of the appraisal as if the home was built at that time.
An appraisal is required by USPAP (Uniform Standards of Professional Appraisal Practice) to state several dates. These include the date of inspection (if conducted), the effective date of the opinion of value and the date of report (date signed).
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