Retrospective Appraisal Resources

 Scope of Work Examples

As part of the Scope of Work, the appraisal was developed by gathering information on the subject from the public records (indicate the specific name of the public records source), the (name of) software program and the Multiple Listing Service (MLS). This includes the legal description, owner of record and sales of the subject within the past three years and current or past listings within the past 12 months of the date of this appraisal. This Appraisal Report sets forth only a summary of the comparable sales and their comparability to the subject and the appraiser’s conclusion. Supporting documentation is retained in the appraiser’s workfile or located in the appraiser’s office.

The subject was physically identified by an interior and exterior visit of the subject property. The only approach to value considered applicable to this assignment is the Sales Comparison Approach. The Cost Approach would only be applicable if the structure was proposed, under construction or relatively new. As the house was originally constructed in (year built), the estimated depreciation of the improvements would be too subjective and therefore not considered a reliable approach to value. The Income Approach typically utilizes sales that were also rented to establish a gross rent multiplier, which would be utilized with the estimated market rent of the subject. Due to no comparable sales that were also rented, the Income Approach to value was not applicable since a Gross Rent Multiplier cannot be established.

In the Sales Comparison Approach, closed sales were utilized in comparison to the subject property. This would include sales outside of the subject neighborhood if deemed necessary. Adjustments were made for any significant differences between the comparables and subject. Information on the comparable sales was based on a cross section of the public records, (name of) software program, Multiple Listing Service (MLS), an exterior observation from the street and if possible, verification with the listing agent or other parties to the sale. The gross living area for the subject was based on measurements by the appraiser and the gross living area for the comparables was obtained from (state source here).

To determine the appropriate scope of work for this assignment, consideration is given to the intended use of the appraisal, the needs of the user, the complexity of the property, and other pertinent factors.

The effective date for the appraisal is XXXXXXXXXX.  The building size, quality of construction, interior finishes and general physical condition of the home and site were used as the basis of the appraisal analysis.  This includes property records obtained or reviewed from the local city and/or county building and planning departments, the county assessor, and the property owner. Google images were also reviewed. This data is assumed to accurately reflect the conditions present at the property on the effective date. For this analysis, the following tasks were completed, but are not limited to:
• Conducted site visit on XXXXXXXXXXXXXX  and collected any data and photographed the property and any major improvements.
• Verified the rental rates (if any) and occupancy in place on the effective date.
• Reviewed the legal description contained in the Grant Deed.
• Reviewed the prior Multiple Listing Service (MLS) sale listings (if any).
• Verified zoning, flood panel, and utility regulations with the local building and planning departments.  These documents are assumed to be accurate and complete. Copies of these documents have been retained in the appraiser’s files.
• Completed a market investigation of the subject neighborhood to identify neighborhood boundaries and competitive properties.
• Identified comparable sales and rental data (if applicable); confirmed and analyzed of same; reviewed comparable properties for expense data and typical ranges.
• Data obtained or reviewed from public agencies including the assessor, tax collector, county or city planning and building departments, FEMA, local MLS, and other proprietary sources for information.
• Although every effort is made to confirm the arm’s-length nature of each sale with a party to the transaction, it is sometimes necessary to rely on secondary verification from sources deemed reliable including grant deeds, Assessor records, real estate agents, and brokers.
• Highest and Best Use Analysis.
• Determination of valuation methodology and valuation analysis of each approach developed. 
•Completion of the appraisal process including the production of the final report.

Intended Use Examples

Trust Asset Valuation - The Intended Use of this appraisal is to provide the client with an opinion of the fair market value of a trust asset, the subject property, to assist the client in tax reporting.  The opinion of value is subject to the Scope of Work and definition of market value.  The opinion of value is subject to the Scope of Work and definition of market value.  The appraiser does not intend, know of or authorize any other use of this appraisal or content in this report.  The appraisal and content of this report should not be used for any other purpose.

Diminution in Value - The Intended Use of this appraisal is to provide the client in this report with an opinion of the potential diminution in fair market value of the subject property from the construction neighboring home for the client’s sole use in a potential mediation and/or litigation, subject to the Scope of Work and definition of market value.  The appraiser does not intend, know of or authorize any other use of this appraisal or content in this report.  The appraisal and content of this report should not be used for any other purpose.

Litigation Case - The Intended Use of this appraisal is to provide the client in this report with an opinion of the fair market value of the subject property for the client’s sole use in the resolution of litigation in the Superior Court of California.  The appraiser does not intend, know of or authorize any other use of this appraisal or content in this report.  The appraisal and content of this report should not be used for any other purpose.

Divorce - The Intended Use of this appraisal is to provide the client in this report with an opinion of the fair market value of the subject property for the client’s sole use in the division of assets in the client’s marital dissolution.  The opinion of value is subject to the Scope of Work and definition of market value.  The appraiser does not intend, know of or authorize any other use of this appraisal or content in this report.  The appraisal and content of this report should not be used for any other purpose.

Fair Market Value Definitions

General Definition - Fair market value is defined as the most probable price which a property should bring in a competitive and open market under all conditions requisite to a fair sale, the buyer and seller each acting prudently and knowledgeably, and assuming the price is not affected by undue stimulus.  Implicit in this definition is the consummation of a sale as of a specific date and the passing of title from seller to buyer under conditions whereby:
1. buyer and seller are typically motivated;
2. both parties are well informed or well advised and acting in what they consider to be their own interests;
3. a reasonable time is allowed for exposure in the open market;
4. Payment is made in terms of cash in U.S. dollars or in terms of financial arrangements comparable thereto; and
5. The price represents the normal consideration for the property sold unaffected by special or creative financing or sales concession granted by anyone associated with the sale.  
•  The Dictionary of Real Estate Appraisal, 6th ed

Divorce - The fair market value of a marketable asset in marital dissolution cases is the highest price on the date of valuation that would be agreed to by a seller, being willing to sell but under no obligation or urgent necessity to do so, and a buyer, being ready, willing, and able to buy but under no particular necessity for so doing.
California Marital Dissolution In re Marriage of Cream 13 Cal.App.4th 81 (1993)

Federal Estate Tax - The fair market value is the price at which the property would change hands between a willing buyer and a willing seller, neither being under any compulsion to buy or to sell and both having reasonable knowledge of relevant facts. 
26 C.F.R. § 20.2031-1(b)

California Property Taxation - “Full cash value” or “fair market value” means the amount of cash or its equivalent that property would bring if exposed for sale in the open market under conditions in which neither buyer nor seller could take advantage of the exigencies of the other, and both the buyer and the seller have knowledge of all of the uses and purposes to which the property is adapted and for which it is capable of being used, and of the enforceable restrictions upon those uses and purposes. 
R.T.C. § 110(a)

Damage to Real Property (CA) - California Real Property Damage Civil Jury Instructions § 3903F  “Fair market value” is the highest price for the property that a willing buyer would have paid to a willing seller, assuming: 
1. that there is no pressure on either one to buy or sell, and 
2. that the buyer and seller know all the uses and purposes for which the property is reasonably capable of being used. 
Value assumes payment is made in terms of cash in United States dollars or in terms of financial arrangements comparable there to.

Extraordinary Assumptions Examples

General Retrospective - The effective date is retrospective to XXXXX. The appraiser has inspected the subject property. An extraordinary assumption has been made that all information regarding the subject property and its improvements, provided by the property contact and additional sources indicated within the report, is complete and accurate.  The use of an Extraordinary Assumption may have an impact on value. The appraiser reserves the right to review and possibly revise the appraisal and value conclusions if other information that significantly changes from the data reviewed becomes available.

Retrospective NO INSPECTION - The effective date is retrospective to XXXXX. The appraiser has not inspected the subject property. EXPLAIN WHY AN INSPECTION WAS NOT COMPLETED.  An extraordinary assumption has been made that all information regarding the subject property and its improvements, provided by the property contact and additional sources indicated within the report, is complete and accurate. The use of an Extraordinary Assumption may have an impact on value. The appraiser reserves the right to review and possibly revise the appraisal and value conclusions if other information that significantly changes from the data reviewed becomes available.

Sample General Purpose Forms

There are several options available in appraisal forms software. Below are blank .pdf examples of forms that can be used for retrospective (and current) non-lending appraisals. Contact your forms software provider to determine how to create a report with one of the below forms.