A tool designed to refine real estate valuations by accounting for fluctuations in market conditions between the date of comparable sales and the effective date of an appraisal. For example, if comparable properties sold several months ago when the market was rising, the tool helps adjust the sales prices upward to reflect current value, thereby providing a more accurate indication of the subject property’s present worth.
The significance of such a tool lies in its ability to mitigate the risk of inaccurate property valuations due to temporal market shifts. Real estate markets are dynamic, and relying solely on raw sales data from the past can lead to skewed appraisals. By incorporating a method for accounting for these changes, it fosters more reliable and defensible valuations, benefiting lenders, buyers, sellers, and appraisers. Traditionally, appraisers relied on manual calculations and market analysis to estimate these adjustments, a time-consuming and potentially subjective process.
