Retrospective Appraisal Guide: Everything You Need to Know about Retrospective Property Valuation

This article will teach you about the Retrospective Appraisal.

  • What Is a Retrospective Appraisal?
  • How does a Retrospective Appraisal Work?
  • What are the Retrospective Appraisal Methods and Techniques?
  • Who Can Perform a Retrospective Appraisal?
  • How to find a retrospective appraiser near me?

And so much more let’s dive in.

What Is a Retrospective Appraisal?

A retrospective appraisal determines the past value of a property on a specific date. A typical real estate appraisal assesses a property’s current market value. In contrast, a retrospective appraisal looks back in time. It provides an estimate of the property’s value as of a historical date.

Retrospective appraisals are often required for various purposes, including:

  1. Estate Planning and Probate – When valuing assets for estate planning or probate, you may need to find the value of the property as of the date of the owner’s death or another past date.
  2. Divorce Proceedings – In divorce cases, especially those involving property division, one may need a retrospective appraisal. It would find the value of marital assets as of the date of separation or another relevant date.
  3. Tax Assessments – You can use retrospective appraisals to assess property values for taxes. This is especially true when there are disputes. This also happens during tax re-evaluations for past periods.
  4. Litigation and Dispute Resolution – Lawsuits may require retrospective appraisals. They determine the value of a property as of the date of the event that led to the dispute.
  5. Historical Analysis – You can also do retrospective appraisals for analysis or research. They provide insight into past property values and market trends.

When doing a retrospective appraisal, the appraiser considers historical data. This includes property sales records and comparable sales. Also, market trends and the economic conditions at the date in question. The goal is to estimate the property’s value at that time. It accounts for factors that may have changed its worth.

Looking back at values requires specialized knowledge and expertise. They are needed to assess old property values. These appraisals are usually done by experienced appraisers who know the process.

How does a Retrospective Appraisal Work?

A retrospective appraisal works by assessing the value of a property as of a specific date in the past. Here’s how the process works:

  1. Gather Historical Data – The appraiser starts by gathering old data about the property. This includes past appraisals and sales records. Also, property tax assessments, zoning records, and building permits. They also gather other documents. These can give insight into the property’s history.
  2. Analyze Market Conditions – The appraiser analyzes old market data to understand the economy. They look at property market trends. They also look at factors that may have affected property values on the date. This includes reviewing historical sales prices of similar properties. It also involves looking at supply and demand, interest rates, and economic indicators.
  3. Assess Property Characteristics – The appraiser evaluates the property’s physical features. These include its size, age, condition, location, amenities, and any changes over time. They may also consider factors. These include things like the environment, the neighborhood, and zoning changes.
  4. Apply Valuation Methods –  The appraiser uses the data and analysis. They use the right methods to estimate the property’s value. This is on the past date. Common valuation methods include the sales comparison, income, and cost approaches. The choice depends on the property type and available data.
  5. Adjust for Time –  The appraiser adjusts the property’s value. They do this based on market changes. These include inflation, depreciation, and other factors since the retrospective date. These adjustments help ensure that the appraisal reflects the property’s value accurately. It does so as of the specified past date.
  6. Prepare Appraisal Report – Finally, the appraiser prepares a full appraisal report. It documents their findings, methods, assumptions, and conclusions. The report includes the property’s value at the retrospective date. It also has data and analysis to support the valuation.

The appraiser must use professional judgment. They must also follow industry standards and guidelines. And they must consider all relevant factors in a retrospective appraisal. The goal is to give a reliable estimate of the property’s value. The estimate is for a specific date in the past. It accounts for historical market conditions and property traits.

What are the Retrospective Appraisal Methods and Techniques?

Retrospective appraisal methods adapt traditional approaches. They estimate the value of a property as of a specific date in the past. Here are the common methods and techniques used in retrospective appraisals:

  1. Sales Comparison Approach – This method involves comparing the subject property to similar properties that were sold around the retrospective date. Then adjustments are made to account for differences in size, condition, location, amenities, and more.
  2. The income approach – This method estimates the property’s value based on its potential to generate income. This income could come from rent or other sources. For retrospective appraisals, they use historical rental income data. They also use market rents from around the retrospective date. They use this data to find the property’s value. People commonly use this method for income-producing properties. These include rental apartments, commercial buildings, and investment properties.
  3. Cost Approach – The cost approach estimates the property’s value by finding the cost to replace it. It adjusts for depreciation. In retrospective appraisals, the appraiser considers costs from the past. These include construction costs, material prices, and labor rates from the retrospective date. Depreciation factors are physical deterioration, functional obsolescence, and economic obsolescence. They also must find the property’s lost value. They find it as of a past date.
  4. Market Analysis – Retrospective appraisals involve a detailed analysis. It looks at the market conditions at the specified retrospective date. This includes reviewing old sales data. It also includes looking at economic indicators. These include interest and inflation rates. It also includes supply and demand in the property’s market area. The appraiser evaluates how these factors influenced property values at the retrospective date.
  5. Trend Analysis – Trend analysis involves studying historical trends. These trends are in property values, market conditions, and economic indicators over time. This helps the appraiser understand the size and direction of changes in property values. The changes happened leading up to the retrospective date. Trend analysis can provide insights into long-term market trends. It shows the factors driving property value changes.
  6. Time Adjustments – Looking back, appraisals need adjustments. They must account for changes in market conditions. They must also account for inflation, depreciation, and other factors since the appraisal date. Appraisers use many techniques. These changes ensure the appraisal reflects the property’s value. It does so as of the specified past date.

Looking back at value requires considering history, market conditions, and methods. They are needed to estimate the value of a property at a past date. Appraisers must adapt old appraisal approaches and techniques. They must do this to account for the unique challenges in valuing things after the fact.

Who Can Perform a Retrospective Appraisal?

Looking back at a property’s value needs real estate appraisal expertise. It also needs understanding of old market conditions and valuation methods. Individuals who qualify to perform retrospective appraisals include:

Certified Licensed Real Estate Appraisers have met state-specific education and experience requirements. They obtained a license from the appropriate regulatory authority. Licensed appraisers may have limits on the properties they can appraise and the complexity of appraisal assignments they can take.

 How to find a retrospective appraiser near me?

 You find a retroactive appraiser near you using the same steps as for any other professional. Here’s how you can locate a retrospective appraiser in your area:

  1. Search Online Directories -Use online directories and search engines. Use them to find appraisers in your area. Websites like the American Society of Appraisers (ASA), the Appraisal Institute, or the National Association of Realtors (NAR) may have lists of certified appraisers. These appraisers specialize in looking back at values.
  2. Consult with Professional Associations – Contact local or state chapters of professional appraisal associations, like the Appraisal Institute or the American Society of Appraisers. Ask about certified appraisers in your area who have experience with retrospective appraisals.
  3. Ask for Recommendations – Ask for recommendations from trusted sources. These sources include friends, family members, real estate agents, and attorneys. They should have experience with retrospective appraisals. Personal referrals can provide valuable insights and help you find reputable professionals.
  4. Check with Real Estate Attorneys – Real estate attorneys often work closely with appraisers. This happens in legal matters like estate planning, divorce, or lawsuits. Consider contacting a real estate attorney in your area and ask for recommendations for experienced retrospective appraisers.
  5. Review Online Reviews and Ratings – Look for online reviews and ratings of appraisers in your area. You can find them on platforms like Google, Yelp, or Angie’s List. Reading reviews from past clients can show the quality of service by the appraiser. They can help you make an informed decision.
  6. Contact Multiple Appraisers – Once you have a list of potential retrospective appraisers, contact them. Discuss your needs. Ask about their experience with retrospective valuations. Also, ask about their fees and availability. Be sure to ask for references and examples of past retrospective appraisal work.
  7. Verify Credentials –  Before hiring a retrospective appraiser, verify their credentials, certifications, and licenses. Make sure they have certification and licensure in the state. Also, they should have experience doing retrospective appraisals.

Use these methods. They will help you find a skilled retrospective appraiser. They will be in your area. They can help you with your valuation needs. You must choose an appraiser. They need the expertise to assess past property values on specific dates.

About the Author

Matthew Reynolds, MAI is a commercial real estate appraiser with Vanguard Realty Advisors. He has been appraising commercial real estate for +20 years. He has done simple and complex appraisal assignments, including land appraisals. He can help you navigate and understand the commercial appraisal process. Please contact him for any appraisal services or to request a quote.