3.2 Date of Value Premises

The Date of Value Is Part of the Assignment

AQB Content Area I lists date of value premise with three categories: retrospective, current, and prospective. Value is not a timeless number floating above the property. It is an opinion as of a specific point in time. Change the date and you may change the market, the legal status, the physical condition, and therefore the value conclusion — even if the street address never moves.

Two dates appear in almost every appraisal file, and they are not the same:

A report dated March 15 can still opine market value as of January 1 (retrospective) or as of a future completion date (prospective). Exam items love to mix these labels. Always identify which date the question is asking about.

The Three Premises

1. Current (Contemporaneous) Date of Value

A current date of value is the date of inspection or another near-term date that reflects present market conditions and the property as it exists (or as agreed in the scope). This is the default premise for:

• Purchase-money and refinance mortgage lending
• Many listing and counseling opinions of market value
• Portfolio mark-to-market updates as of "today"

Example: A certified residential appraiser inspects a house on June 10, 2026, for a purchase loan. The engagement calls for market value as of the date of inspection. Sales used as comparables should be analyzed with market conditions as of June 10, including any time adjustments supported by data between older sale dates and the effective date.

Current does not mean "ignore the past." Historical sales still provide evidence, but they are adjusted or weighted to reflect the market as of the effective date, not as of each sale date alone.

2. Retrospective Date of Value

A retrospective date of value is a date in the past. The appraiser develops an opinion of value as of that historical date, using market evidence that was known or knowable then (and following applicable standards and scope about what later information may be considered).

Common uses:

Example: An owner dies on September 3, 2024. The personal representative needs a market-value opinion for federal or state estate purposes as of the date of death. In 2026 the appraiser gathers 2024 market data: listings, closed sales, financing conditions, and neighborhood trends around September 2024. A 2026 boom in prices does not raise the date-of-death value. Using only post-death sales without proper analysis of what they say about the earlier market is a classic error.

Retrospective work is harder when data are sparse. The appraiser may need older sales, broker interviews documented in the workfile, and careful market-conditions analysis. Competency includes knowing how to research a historical market, not only today's MLS printout.

3. Prospective Date of Value

A prospective date of value is a date in the future. The opinion answers: what will the property be worth as of that future date under stated assumptions?

Common uses:

Example: A lender will fund construction of a four-unit building. The client needs (1) as-is market value of the site today (current premise) and (2) prospective market value upon completion as of the scheduled certificate-of-occupancy date nine months forward. The second opinion is prospective. It assumes the improvements are completed as described — an assumption that must be labeled correctly under USPAP (typically an extraordinary assumption if you assume completion without knowing it has occurred, or framed with a hypothetical condition when valuing as if complete contrary to the known incomplete fact, depending on how the assignment is structured and current USPAP definitions applied in the edition in effect).

Prospective values are not guarantees. They are opinions conditioned on market forecasts and property assumptions. Sensitivity to absorption, costs, and cap rates is often essential, especially at Certified General depth.

Side-by-Side Comparison

USPAP Linkage: Extraordinary Assumptions and Hypothetical Conditions

USPAP (Uniform Standards of Professional Appraisal Practice) requires the appraiser to identify the effective date and to disclose extraordinary assumptions and hypothetical conditions clearly when used.

Definitions in plain exam language:

• Extraordinary assumption — something uncertain that, if found false, could alter the appraiser's opinions. You assume it is true for the assignment. Example: assuming proposed plans and specifications will be followed when valuing upon completion, when completion has not yet occurred.
• Hypothetical condition — something contrary to what is known to exist but taken as true for analysis. Example: valuing a property as if contaminated land were clean when contamination is known, because the client needs that scenario (with proper disclosure and authority).

Retrospective and prospective assignments frequently trigger these tools:

Exam discipline: never bury the effective date or the assumptions. Mislabeling a prospective completion value as a plain current as-is value is both a USPAP problem and a lending-risk problem.

Worked Mini-Scenarios

Scenario A — Estate tax (retrospective). Date of death: January 12, 2023. Report date: August 5, 2026. Correct effective date: January 12, 2023. Market conditions after early 2023 inform only insofar as standards and scope allow them to illuminate the market as of the death date; they do not automatically update the opinion to 2026 levels.

Scenario B — Current mortgage lending. Contract price negotiated last week; inspection tomorrow. Effective date: inspection date (or other date specified by the client consistent with assignment conditions). Premise: current. Subject valued as it exists, subject to any stated limiting conditions.

Scenario C — Proposed construction (prospective). Land is vacant today. Plans show a 12,000 SF retail shell. Client needs value at completion in 14 months and value at stabilization 24 months out. Both are prospective. Support includes cost estimates, market rents, vacancy, absorption, and capitalization or yield analysis. Disclosures must state the future effective dates and the completion/stabilization assumptions.

Market Conditions and the Date of Value

Because value is date-specific, market conditions adjustments in the sales comparison approach are really adjustments for differences between comparable sale dates and the subject's effective date. In a rapidly rising market, an older sale may need an upward time adjustment to reach a current effective date. In a falling market, the opposite. For a retrospective date, you adjust toward the past date, not toward today. For a prospective date, you are forecasting — a different analytical burden than merely time-adjusting closed sales.

Exam Traps for Date of Value

1. Confusing date of report with date of value. They often differ.
2. Using only current comps for a date-of-death value without historical analysis. Retrospective needs a historical market lens.
3. Calling a "upon completion" opinion a current as-is value. Completion values are prospective (and assumption-laden).
4. Forgetting disclosure of extraordinary assumptions on proposed or uncertain-condition assignments.
5. Assuming prospective value is prohibited. It is allowed when appropriately developed and disclosed; it is not the same as guaranteeing a future price.
6. Ignoring statutory effective dates in eminent domain or tax assignments that override the appraiser's preferred inspection date.

Why This Subtopic Sits in "Real Estate Market"

Date of value is listed under Real Estate Market because markets move through time. Supply, demand, interest rates, and land-use rules as of the effective date define the economic environment of the opinion. Later chapters on approaches to value assume you already know which market day you are solving for. Get the premise wrong and every subsequent calculation — GRM, cap rate, cost index, pair of sales — is aimed at the wrong target.