The Legal- and Practical Difference- with How Long a Property Appraisal Lasts

by | Aug 26, 2016 | Appraisal

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A Property Appraisal is an often cited and often required document for receiving any loan attached to a property. It is often requested prior to a sale. Realtors need it to determine a value. It is an integral part of real estate transactions. So, how long does an official appraisal report last? How long does it take for the Property Appraisal to no longer is relevant for banks?

There is a difference between the legal limit and the “useful” limit. Specifically, a real estate appraisal is considered moot after about a year. A lender or buyer can use the information up to a year after the date of the appraisal. After that, it requires a re-evaluation (though a lender can use it if they so choose. That is a rarity in major banks but possible with independent local lenders).

This is the legal limit for use of a real estate property appraisal. But, it may not be the practical limit. Most institutions will not favor an appraisal that is over six months old. The market is too tumultuous for a period of over six-months to be particularly relevant. This is solved with an appraisal re-certification. It typically consists of an appraisal agent checking the basics and confirming if the property has held its value and not degraded substantially.

An appraisal is also a positive outlook. It looks at sales in an ideal scenario and usually reflects the top price that would be paid for the property. It may account for similar home sales in the last six months, but not longer (for reasons highlighted above). Visit for further details on what an appraisal constitutes.

An appraisal does not account for any potential additions or improvements. It is a current valuation only. An appraisal may have an “expected” section, which accounts for a predicted market jump (or drop) as well as other potential upgrades. This isn’t always available. The minimum an appraisal authenticates is the current value- that day- and not anything else. So, a garage full of construction equipment for the new second floor is moot. It may even detract from the value. It makes the garage look like a mess.

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