Clients often ask, “How long is an appraisal good for?” The short answer is that every real estate appraisal value opinion has an effective date. The appraisal’s value estimate
is only good for as long as the effective date. The effective date might just be a defined full day (past, present, or future) or just the moment that the appraiser was viewing the property. If a natural disaster hit the property immediately after the appraiser
left, the actual value would instantly change, so an appraiser’s opinion must be specific.
Markets fluctuate with time (think of the stock market). If the real estate market is stable, then an appraisal might be useful (depending on the intended purpose or user) for
a longer period. For instance, if a weatherman says it is going to be sunny and warm in Portland, Oregon on Friday, you would not use that estimate to plan for an outing on Monday. The weather in Portland, Oregon is usually unstable and can vary by the day.
Appraisers are like weathermen for the real estate market. Under normal market conditions, real estate values in Portland commonly fluctuate from one month to the next.
From the context of an appraisal used to obtain a loan, the time an appraisal is valid depends on the lender’s underwriting guidelines. For most lenders, an appraisal is no
longer useful after ninety days, but some are accepted up to six months after the effective date. You will need to ask your lender to answer this question because they might be subject to federal or internal requirements regarding your loan and your appraisal.
One client asked me last week, “I’m selling my home in a few months, should I get an appraisal done now to estimate my listing price.” My answer to him was to wait until a couple
of weeks prior to listing. When an appraisal is used to
set a list price, appraisers look closely at the direct competition from other active listings. Changes in the list price of one or two close competitors can make a
big difference in how a particular property is seen in the market and may alter its value or an appraiser’s recommended list price. It is important to have the most recent data possible when setting a list price.
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