Don't Expect Anyone to Rely on an Outdated Appraisal
Every so often, a real estate client comes to me with an old, out-of-date appraisal. They point to that stale appraisal and say, "this will give you a good idea of what my house is worth". And some of the appraisals handed to me by clients as "evidence" of their home's value are as much as a decade old.
I must sound like a broken record when I reply to this statement. I tell clients that their appraisal is a snapshot of value, something that loses its usefulness in a short time. In a rapidly-changing market, that time frame gets even shorter.
What factors contribute to the short shelf life of an appraisal?
First, appraisals are based on comparable sales data. When the recent sales data changes, your appraisal becomes invalid. Sales prices taken from recent comparable properties can fluctuate, even wildly at times.
Appraisal standards change. We witnessed this fact when the mortgage meltdown occurred a few years ago. In order to improve loan quality, it was deemed necessary to impose stricter regulations on appraisal procedures and parameters.
Your house is older today than it was when your five year old (or even older) appraisal was prepared. The condition of a home is a snapshot too. Homes depreciate over time. Decorating styles come and go and the popularlarity of certain features in a home may change as well. Neighborhood crime statistics and school rankings don't always stay the same. These may be subtle factors, but they have an undeniable effect on sold prices.
Figure that your home's appraisal is probably good for six months. By the time a home's appraisal is a year old it's usually worthless. The vast majority of mortgage underwriters won't give any consideration to an appraisal prepared using comparables older than six months. There may be occasional exceptions, of course, particularly in a low population density area or in some areas of vacation/recreational homes. For example, I have seen local lenders (usually those who deal exclusively in "portfolio" mortgages) who may consider a year old appraisal as having at least some value.