When producing their reports, appraisers must determine an appropriate date of valuation. While this may sound straightforward, in reality, the date of valuation can be a nuanced detail that shapes the entire appraisal. A property’s value can be appraised as of the date of inspection or the appraiser can establish either a retrospective or prospective date depending on their client’s needs.

Retrospective Date of Valuation

With a retrospective date of valuation, an appraiser seeks to estimate the value of a property for a past date. This is most commonly used in estate settlements, tax appeals, division of matrimonial assets or partner disputes.   In these situations, the clients may require to know the value of a property at a prior date for legal purposes.

Prospective Date of Valuation

A prospective date of valuation assesses the value of a property at a future date. This is predominantly used in cases where there are proposed construction or improvement projects involved. In these instances, borrowers may seek additional funding for property improvements, prompting lenders to request a prospective appraisal that will estimate the future value of the property. With prospective valuations, appraisers must assume that the work will be done in a professional manner; ensuring the value will indeed be added to the property.

Whether current, retrospective or prospective, the significance of the date of valuation can vary depending on how the appraisal will be used. Nevertheless, the date of valuation is an important and potentially consequential detail in every commercial real estate appraisal.