Retrospective appraisals are appraisal reports that are completed as of a prior date or a date in the past. Historical appraisals of this type are often ordered for litigation or for IRS tax reporting purposes.
Anyone who has completed a retrospective appraisal report quickly realizes that data from the past is often more difficult to acquire than current sales data. While some paid data services provide sales for several years in the past, others sources like home data available via some multiple listing services, only keep sales information for the current year. When sales data is not readily available the research involved to complete a retrospective report can add many hours to its completion.
The availability of data often makes a difference to appraisers when they bid on a retrospective assignment. Appraisers must also consider and describe market condtions as of the retrospective date of value. If you are requesting a retrospective report, ask the appraiser if they were active appraising property in the market as of the retrospective date. If they were active it is likely that they will remember the state of the market on the retrospective date. If they were not active its all hypothetical and they have no memory of it (nor appraisal files that they can reference to refresh their memory).
Appraisers are often asked it the can use sales that were transactive past the retrospective date of value.
If a sufficient quality and quantity of sales are available on or before the retrospective date appraisers would generally not use sales beyond it. The rule is not however hard and fast. If the sales are few the appraiser may select sales past the date of value and adjust them for changes in market conditions. So if properties were going up in value, an adjustment would attempt to bring the sales used back to the retrospective date.
Retrospective appraisals can become challenging when the date of value is over 5 years old. I have completed a few reports that required sales from 10 years ago, and even though I had appraised properties during that time it was still difficult to create a report as of that date. The data collection of today has improved considerably from the data collection that was happening that many years ago.
For more residential or commercial appraisal information contact Glenn Rigdon
, MA,MRICS, ASA a Las Vegas / Henderson Nevada appraiser via email or via his business website Horizon Village Appraisal
), or you can also click on “Contact Us” on the home page of this website.
Article source: http://www.appraisalarticles.com/General-Appraisal-Articles/2901-What-is-a-Retrospective-Appraisal.html