From the course: How to Read a Commercial Real Estate Appraisal
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Completion date vs. effective date
From the course: How to Read a Commercial Real Estate Appraisal
Completion date vs. effective date
When reviewing an appraisal, there are important chronological considerations. In particular, ask yourself, what is the effective date of the appraisal relative to its completion date? Is the appraisal current? This is a snapshot of the property, its condition, and its value today, in the present. The appraiser would have an effective date roughly in line with the date they completed the actual inspection. This is the most common type of appraisal that lenders work with when financing or refinancing owner-occupied and income-producing properties. Our example appraisal is a current report. The effective date is the same as the inspection date with the transmittal letter itself being delivered five days after the physical inspection date. Sometimes a recent completion date will have an effective date in the past. This is called a retrospective appraisal. These are much less common, but may be commissioned under extenuating circumstances. One example would be a loan that was extended in…
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