Effective Date & Date Of Appraisal

[hastalavista]

Denis,
"state the effective date of the appraisal and the date of the report"

Are you making this up?


:icon_redface: Just kidding!
It's there, black & white, all three written reporting options.

 

[moh malekpour]

Effective date of appraisl is when I completed the collection and analysis of all neede information about the subject and comparables including physical, legal, environment, economic and decided to process the appraisal.
The date of report is when I completed the report, concluded the value and reviewed the report to make sure that is in compliance with USPAP and all items listed in the certification. I sign the certification after I completed the report to certify on that date that I completed appraisal in compliance with USPAP, the certification and limited condition.
If I can collect and analize my data about the subject and comps in the morning and complete my report in the afternoon, my effective date of appraisal and the date of report would be the same date. Otherwise, for the current value, the date of the report is going to be after the effective date of appraisal but shouldn't be too long.

 

[Steve Owen]

Three important dates to consider...

Michael, Dennis pretty much nailed this, but I think his language could have been a bit clearer. For that reason, I'll offer you something as explained by our Appraiser's Commission (as I remember it):

There are really three dates to consider in an appraisal. One of those is the date you see the property. It is usually not a USPAP requirement to report that date, but I find that it is often helpful to the reader in understanding things. Also, the new Fannie Mae 1004 form requires that the date of value (effective date) be the same day as the date the appraiser saw the property. Fannie wants to know what day you were there, but USPAP does not otherwise require you to report it unless it is necessary in order to not be misleading. For example, you might do your appraisal inspection on September 15th, but for a retrospective date of value on March 15th, and not finish the report until October 15th. In such a case, if you don't report the date you saw the property, the reader might think you saw it on the retrospective date, but such an appraisal should include an extraordinary assumption that the property was in the same condition on the date of value as on the date you saw it, unless it is otherwise described.

The second date to think about is the date of value, often called the effective date. This is important to report because the appraisal is valid as an opinion of value on a specific date. If you didn't report this date how would anyone know what your opinion of value was? The market is naturally a moving target and appraisals do not have a necessarily long shelf life.

The third date to think about is the date of the report. Most appraisers think of this as the date the report is signed. Steven Santora is correct in saying that you could sign the report early and then do the work later... but, is also correct is saying that it is not a very good work habit. Technically it may also be out of compliance because there is a reason the Appraisal Board wants to know the report date. They want to know what date you are considering the property from. (I know, you shouldn't end a sentence with a preposition.)

Anyway, the main reason the report date is important is because the USPAP and other rules that apply apply as of that date. If you are doing a retrospective value as of December 15, 2005 you would only consider data from the time period before that date. But, the USPAP that would apply to the report is the one in effect on the report date... today, in this example.

I usually think of the report date as being the day I came to my opinion of value. I may do additional clean-up work, and may actually physically affix the signature the next day, but I date it on the date I determined what my opinion was going to be. Knowing why the report date is important to the regulators makes this method seem most logical to me.

I believe your question, restated, was: Is it true that the date of value and the report date are usually two different dates?

I would say yes, that is usually the case. However, it is not mandatory.

 

[Steve Owen]

Correction...

I misread Dennis' first post and he missed one point... there is a requirement to date the appraisal. I read him as saying that there is no requirement to put the inspection date in the appraisal. (That's what I get for getting in a hurry.)

Effective date of appraisl is when I completed the collection and analysis of all neede information about the subject and comparables including physical, legal, environment, economic and decided to process the appraisal.

This would be correct, if I'm reading it right, if you are doing the appraisal on a Fannie Mae (new) form; but, that is only because Fannie wants it that way. Otherwise, it is not actually right. The effective date, date of value, or date of the appraisal... three different ways of saying the same thing, can be any date you need it to be. It can be different from the date you saw that property, collected the data, and made the analysis. Two frequent examples of this are appraisals done for estate purposes... the date of value is usually the date of death, usually some time in the past. Another example that comes up pretty often is when a property has been damaged or destroyed, but the client needs to know what the value was before the damage happened.

 

[Curtis West]

The effective date of the appraisal is whatever the client wants it to be. It is not the appraiser's job to decide what the effective date of the appraisal is. It is the clients's problem not the appraiser's.

 

[Steve Owen]

That is only correct up to a point, Curtis. I just finished a job for an estate; the client, surviving husband is still distraught over the loss of his wife a few months ago, so getting information was not too easy... it took me awhile to even figure out this was going to be an estate deal. Engagement letter said date of value was as of the date of appraisal inspection... at the client's request. During the process, I figured out it is an estate deal and changed the date of value to the client's wife's date of death; the client could not bring himself to ask for that even after I tried to explain things to him. (I got confirmation from the client's attorney before changing it.) It would not have been in this client's best interest to give him what he asked for.

 

[Fred]

Curtis,
You are right. The appraiser's determination of effective date is often forced by assignment conditions: date of take, date of death. Other times there is some discretion.

 

[joe huffman]

Denis, try SR2-2b(vi)

 

[hastalavista]

Denis, try SR2-2b(vi)

Thanks Joe,
I read it after Steven's admonishment;that's why I posted with the red-face above.

 

[stefan olafson]

Effective date is typically the date of inspection in most instances, except, of course if you're a retrospective or prospective appraisal. Then the effective date is the date you choose either retrospective or prospective.

Date of the report is typically the date of completion of the report, when you deliver the report to the client.