Official guidance
Why the date and the market go together
An appraisal gives a value as of an effective date. Between two dates a market can rise, fall or stay level, so the same house can have different values at different times. Fannie Mae's Selling Guide states that, for loans sold to Fannie Mae, the appraiser must analyze closed sales, contract sales and listings of the most comparable properties as of the effective date, and that this is particularly important in changing markets. That is a mortgage-program rule, and the underlying idea applies to any careful appraisal.
How a changing market shows up in a report
The appraiser compares your home with similar homes that sold recently. If prices have moved since a comparable sold, the report adjusts for the time between the sale and the effective date. Fannie Mae's guidance says such adjustments must be supported by market evidence, such as home price indices or statistical analysis, and not by a rule of thumb. A careful report explains how the adjustment was derived.
The appraiser also considers whether homes are selling more slowly or faster, and whether sellers are offering concessions. These conditions are about the market at the effective date, not about a forecast.
What the appraiser cannot do
The Interagency Appraisal and Evaluation Guidelines describe three categories of effective dates, retrospective, current and prospective, chosen according to the intended use of the assignment. A current or retrospective assignment states a value as of a date that has already arrived, based on what had happened by then. A prospective value, for example one tied to a proposed development or renovation project, is a different engagement with its own assumptions, and nothing here describes one. A market report is not a forecast of what your home will be worth later.
What a homeowner can do
Choose the date deliberately
If you are settling an estate or a divorce, the date is a decision to make with counsel. If you are selling, order the appraisal close to the date you need it.
Supply facts
A dated list of improvements and repairs helps the appraiser reflect them accurately.
Read the comparable sales
Check their dates, locations and differences from your home.
Ask about adjustments
A time adjustment should be explained.
Why no figures appear here
Market statistics change quickly, and a statistic without its source and date misleads, so none is quoted here. If you need current figures, look to the public data sources that publish them and read the date on each, and ask the appraiser how the recent sales for your property compare.
Frequently asked questions
Do market trends change an appraisal after it is written?
No. An appraisal is as of its effective date. A later market change does not alter it, though you can order a new one.
Which date should I choose in a moving market?
The date your purpose requires. For an estate it is often the date of death, and for a divorce the date agreed with counsel.
Should I wait for the market to turn before ordering?
A current or retrospective assignment states a value as of a date and is not a forecast, and a prospective assignment is a separate engagement, so waiting depends on your goal. Tell the appraiser the date your purpose needs.
Where do appraisers get recent sales?
From sources the report must name. For loans sold to Fannie Mae, the data source of each sale must be stated, such as tax or deed records.