As Of Effective Date: Meaning

[J Grant]

It's worth something for those 24 hours, lol. Actually most clients base decisions on a property based on appraisal several weeks out from effective date and sometimes months out. That's up to them how long to rely on it.

 

[Ken B]

If we are asked to do a retrospective valuation in NYC... say Sept. 10, 2001, now what do we do? Pretend we don't know what happened the following day? KNOWING the coming delay and turmoil in the market? How much property changed hands in NYC after 9 am?

I have to believe you know the answer to that question. Of course we ignore any unforeseen events that may have occurred subsequent to the date of value in a retrospective appraisal.

You might as well ask if we can provide a retrospective value dated one day before a fire destroys a home.

 

[Michigan CG]

Two things in life I've seriously regretted:

1. Voting for Jimmy Carter.

I've never met anyone who admitted to voting for Jimmy.

 

[J Grant]

Arguing with me is like a trip to the dentist...you feel so good when the drilling stops! lol but seriously it's a topic that needs to be looked at, we rarely examine such fascinating topics as this. (fascinating to appraisers only who else would even know what it all means especially on Monday)

 

[Mark K]

I've never met anyone who admitted to voting for Jimmy.

Yeah, I think my one vote must have sent him to DC because I've also never met anyone that will fess up to it.

At the time, I was in engineering school, he was a nuclear engineer, I thought that maybe he was smarter than he turned out to be.

"AS OF" that effective date in 1976, I was 21 and it was my first chance to vote (had to be 21 back then). Talk about buyer's remorse.

 

[Eli]

Many people just don't realize how much risk for all parties (including the public in general), is limited by a professional appraisal on the EFFECTIVE DATE....

I repeat.....On the effective date the risk is limited by the professional appraisal.

 

[Terrel L. Shields]

You seem aghast at this; as if an appraisal is supposed to provide an unending series of future values good for all the remaining future years of physical life of a property?

No. I think you and Ken B knows the answer to that. But my question is what good is a single snapshot of value (basically good for one day since we don't know what might happen tomorrow) in terms of the 10 to 30 year life of a loan? Its sole purpose is to pass underwriting but does it really reduce risk? Was the old system where the loan officer actually LOOKED at the property and set their own value any worse? So we argue over how many angels can fit on the head of a pin but the question was "We see your wings, but can you fly?" Why do we worry about the nuances of the MV definition, make adjustments of $1,000 on $300,000 homes, ignore the impact of concessions, machinations with lending, and RE commissions and "opine" some totally contrived number no one believes in, including ourselves if we have half a brain. It's just a number and the more obtuse the property, the less accurate the number, no matter how precisely we opine it.

 

[Eli]

Instead of saying the risk is limited by a professional appraisal on the effective date, I should say as of the effective date especially considering retrospective and prospective effective dates. Either way, the risk is limited when the report is complete and performed according to USPAP by a competent and qualified appraiser.

I

 

[Eli]

It is amazing how good a professional and competent appraiser is if you give them enough time and pay them enough.

 

[J Grant]

T, you keep posting about how appraisals are worthless about forecasting risk. Do you truly not understand what the purpose of an appraisal is? An appraisal is developed to disclose facts as well as provide opinions and analysis about a subject property and relevant market, in order to provide information for users to make an informed decision. The appraisal is made as of an effective date. Users can rely on that eff date appraisal as far out as they wish, typically in lending it's good for six months. Good luck getting back the old system of having a loan officer drive by a property. Perhaps one day a better value estimate or value opinion product than appraisal will emerge.

I can't foresee a value product that would forever limit risk except this; advise people not to buy property and not to lend on property. That way they will have zero risk associated with owning or lending on property since values can change over time and storms/disasters can occur.