How long is a property appraisal valid?

The shelf life of an appraisal varies based on the type of loan and current real estate market conditions.

Appraisals estimate a home’s value at a given point in time. However, an appraisal’s accuracy may decrease over time due to volatility in the housing market and other economic conditions. Lenders have the option of accepting or rejecting an appraisal, and the duration of its validity will depend on the lender. Therefore, appraisals can have varying shelf lives.

As a homebuyer or seller, you want to ensure that the appraisal you pay for is up-to-date and accurate. Accurate appraisal information is essential for the buyer so they don’t overpay for a property based on outdated information. All the improvements they’ve made to the property reflect in the appraisal for the seller. The fresher the appraisal, the more accurate it will be.

90 Days Is Typical

Real estate appraisals are typically valid for two to six months. However, there are exceptions and variables listed below, as well as special requirements that depend on the type of loan the buyer is obtaining.

Comparable sales, aka “comps,” can significantly impact the appraiser’s ability to determine overall market conditions. Generally, comps should be no older than 90 days, as anything beyond that could be outdated and not reflective of the current market.

Economic Conditions

When real estate markets are volatile, and prices fluctuate abnormally, an appraisal may not be reliable after 90 days. For rapidly rising or cooling markets, lenders may only want to rely on an appraisal for 30 to 60 days.

In contrast, if the market has been steady for some time, lenders may be content with an appraisal that is half a year old. Nonetheless, if unforeseen changes arise, lenders have alternatives such as re-evaluation of the appraisal or verification of the value, which options will further discuss in this article.

Buyer's Beware

Sellers may pay for an appraisal in advance to expedite the closing process or as a cost-saving measure for the buyer. Only the appraisal accepted by the buyer’s lender is valid. Sellers typically don’t know the buyer’s lender in advance, so they should leave the appraisal to the buyer since appraisers are impartial providers of home valuation who work for the lender.

Changes to the subject property post-appraisal

Changes to the property post-inspection could render the appraisal invalid. Significant changes to the subject property could include upgrades or renovations that raise the value, as well as destruction or damage caused by natural disasters such as floods or fires. If any of these events occur, it might be necessary to have a new appraisal done or to have the appraisal updated or the value recertified.

Loan Requirements by Type

Conventional loans can be the least restrictive and usually allow the appraisal to remain valid for 120 days. New construction appraisal can remain valid for up to one year.

FHA loan appraisals can be valid for up to 120 or 240 days if updated with a 1004D. A new assignment must happen if the FHA case number changes, even if the original appraisal is within the initial 120-day validity time frame.

Fannie Mae (FNMA) loan appraisals are generally valid for 12 months but require an update at the four-month mark.

USDA loan appraisals are valid for 120 days plus a 30-day grace period. If the appraisal will be more than 150 days old at closing, an update or a new appraisal is required.

Veterans Affairs loan appraisals are valid for up to six months and automatically expire if the loan closes. A new appraisal is required if the appraisal expires before the loan closes. VA borrowers cannot reuse the same appraisal once the loan has closed.

Appraisal Updates

If your appraisal is no longer valid, it may not be necessary to obtain a new appraisal. Your lender could instead opt to order an update (refresh) to ensure the property value has not decreased since the original appraisal was done.

Recertification of Value

If your appraisal is no longer valid, obtaining a new one may not be necessary. Your lender could instead order an update (1004D) to ensure the property value has not decreased since the original appraisal was done.