A retrospective appraisal is a valuation of a property as of a specific date in the past, rather than the current date. This type of appraisal is often used for legal or tax purposes, such as:
- Estate and inheritance tax: To determine the value of a property for estate tax purposes, an appraiser may need to estimate its value as of the date of the owner’s death.
- Property tax appeals: If you believe your property is being unfairly taxed, you may be able to appeal your assessment by having a retrospective appraisal done to show that its value was lower on a specific date in the past.
- Divorce settlements: In some cases, a retrospective appraisal may be needed to determine the value of a marital home as of the date the divorce was filed.
- Damage claims: If your property is damaged by a fire, flood, or other disaster, you may need a retrospective appraisal to document its value before the damage occurred.
Here’s how a retrospective appraisal works:
- The appraiser is hired and given the effective date of the appraisal. This is the date as of which the property’s value needs to be determined.
- The appraiser researches the property and the surrounding market. This includes gathering information about the property itself, such as its size, condition, and location, as well as sales data for similar properties in the area.
- The appraiser adjusts the sales data for differences between the comparable properties and the subject property. This is done to account for factors such as size, condition, and location.
- The appraiser uses the adjusted sales data to estimate the market value of the property as of the effective date.
- The appraiser writes a report that summarizes their findings and includes their opinion of the property’s value.
Retrospective appraisals can be more complex than traditional appraisals, as the appraiser needs to consider the market conditions that existed at a specific point in time. However, they can be a valuable tool for resolving legal and tax disputes.