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Retrospective Appraisal

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mark peters

Freshman Member
Joined
Jul 22, 2002
Wondering if anybody would be willing to help on this issue?

I have been requested to do 2 appraisals. The first is for a value back in 01/31/2001. The second will be done after the first. It is for a divorce that occured back in 01/2001. This is my first retrospective and would like any insight as to how I would go about it if considerably different than the "normal" appraisal process. The client is the mortgage company and no lawyers are involved. Any help would be appreciated. Thanks

Mark
 

Farm Gal

Elite Member
Joined
Jan 14, 2002
Professional Status
Licensed Appraiser
State
Nebraska
Mark:

To my way of thinking, retrospectives are somewhat easier than standard appraisal: you have the benefit of perfect hindsight vision, that is IF your local MLS records keeps such things as "expired listings" and "list by dates" on sold properties which competed as of the efective date...

If you have that data and can take the time to take a close look ( you may have to cast a wider net for sales listed but not closed and then sort out those applicable to your problem), you have the advantage of being able to see what actually happened to those properties which were listed as of the effective date, therefore can 'see' why certain competing properties did/didnot actually close. Cool if you got it!

Many appraisers will use sales which were under contract at the time of the effective date, but not yet closed, as those sales do show the intentions of the buyers in the market at the time! Sometimes the "perfect sale" IS the one next door which was under contract but didn't close until a few weeks after the effective date.

The down-side is that with that much time passed, you are going to pretty limited in finding 'condition' information on the competing sales, and an exterior viewing is pretty suspect ~ a lot of remodleing can occurr over that ime frame... Many agents have horrible memories about homes that sold 3 months ago let alone umpteen years, and some of em have undoubtedly moved around or left the business entirely!

IF you are doing a 'form report' as opposed to a narrative make very sure you indicate what you are doing and why (scope) in several places, so that the report is not mis-leading. "as of the effective date of this report the subejct neighborhood...blah blah bla."

Remember that you are ultimately doing this for lawyers (even if the client is a mortgage company :rolleyes: ) I would bet that there will be some subtle or not so subtle pressure to make the first mortgage as high as possible so that the current value )second) will be lower proportionately. Stand your ground :usa: on any pressure of this sort, as the 'it ain't for the lawyers' <_< may come back to haunt you. The values are whatever they are. B)
 

Mike Garrett RAA

Elite Member
Gold Supporting Member
Joined
Jan 14, 2002
Professional Status
Certified Residential Appraiser
State
Colorado
They are alot easier as stated above. Just remember the effective date of the appraisal is different from the date signed. I always add disclaimers concerning the photographs...especially if the retrospective date is several years in the past. Our MLS keeps photos on file for 5 years..when possible I like to use those as they reflect what the comps looked like then.
 

Richard Carlsen

Elite Member
Joined
Jan 15, 2002
Professional Status
Licensed Appraiser
State
Michigan
First thing is to not make it hard on yourself. They are not that difficult to do.

If you have MLS data, go back to the effective date and run some numbers, i.e. solds vs expireds, days on the market for the prior 2 years, sale price vs listed price, overall market increase/decrease in values, etc. This will give you a an idea what the market was like at the effective date. Then, starting with the effective date, run searches for comps for the prior 6 months, then the prior 8 months, then prior 10 months etc. until you have enough good comp candidates. I always try to use at least 4 comps to support market levels on a retrospective appraisal. Then just do your normal report but remember to pretend that you are writing the report as of the effective date. Nothing that happened after that time is known or happened. Mike's point of disclaimer if you cannot use MLS photos is good because more than likely, the comps will have changed since they sold.
 
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