Retrospective Appraisals - Appraisals as of a specific time in the past

QUESTION: My mother or father died 15 years ago but we never got an appraisal to establish the value of their property at the time, we have just sold the property and need to establish the basis in the property for tax purposes.  Is there some way to "go back" and appraise it for what it was worth then? 

ANSWER:  While it is not always easy, it can be done, it is called a Retrospective Appraisal. At Scott Appraisal Company, our appraisers have years of experience.  We can help you.



Retrospective Value is generally defined as:

“A value opinion effective as of a specified historical date. The term does not define a type of value. Instead, it identifies a value opinion as being effective at some specific prior date. Value as of a historical date is frequently sought in connection with property tax appeals, damage models, lease renegotiation, deficiency judgments, estate tax, and condemnation. Inclusion of the type of value with this term is appropriate, e.g., “retrospective market value opinion.”

Source: Appraisal Institute, The Dictionary of Real Estate Appraisal, 5th ed. (Chicago: Appraisal Institute, 2010). 


A Retrospective Value may also be referred to as Historical Value.   

What it Means:  

Retrospective Value is used when the client needs to know what the value of a property was at a date in the past, be that 5 months, 5 years or 50 or more years ago.  


The typical need for a retrospective appraisal arises when someone dies and a valuation as of the date of death is required, or when someone receives a gift of property. 

Historical appraisals can also be useful for estate planning.

Other situations may require a historical appraisal:

• To determine a decline in value of a property that you sold at a loss (like an investment property) in order to claim a loss for tax purposes.  
  
  
• To determine the market value of property as of the date that a taxing district assessed the value for property taxation.  
  
  
• As part of the property valuation for a divorce (aka, a Divorce Appraisal) or to assess the value of a property when the marriage occurred, and the present value to determine the difference.  Sometimes the value has gone up, sometimes it has gone down.  This may occur when a major local employer has moved out of town or laid people off to the point that it depresses the market. 
  

In order to facilitate the appraisal of property as of a date in the past, you may need to provide as much information as is available, records such as deeds, inspection records, information about improvements or repairs that have been made, new roof, carpet or flooring, built-in appliances or photographs that can substantiate the condition of the property at the time the records were created.  While all this information will be helpful, it is not absolutely necessary, so if you have no information at all, do not give up hope. The appraiser will use whatever information is available as well as historical market data (such as sales in the Multiple Listing Service (MLS)) and construction data (cost to build), less estimated depreciation, to determine the market value of the real estate as of the date required.