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Uspap Comp Selection

Discussion in 'Fannie Mae, Freddie Mac, USPAP' started by bart nathan, Jan 30, 2008.

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  1. bart nathan

    bart nathan Member

    1
    Jun 9, 2005
    Professional Status:
    Certified Residential Appraiser
    State:
    California
    I am looking in uspap for comp seclection guidlines for appraisal reports?

    (not comp checks)
     
  2. CANative

    CANative Elite Member

    124
    Jun 18, 2003
    Professional Status:
    Certified Residential Appraiser
    State:
    California
    Thank you for telling us.

    Good luck.
     
  3. bart nathan

    bart nathan Member

    1
    Jun 9, 2005
    Professional Status:
    Certified Residential Appraiser
    State:
    California
    where would i find it
     
  4. Mr Rex

    Mr Rex Elite Member

    114
    Jan 12, 2004
    Professional Status:
    Certified Residential Appraiser
    State:
    North Carolina
    Not going to find much in USPAP. Heres what it says:

    Standards Rule 1-4

    In developing a real property appraisal, an appraiser must collect, verify, and analyze all information necessary for credible assignment results.
    (a)
    When a sales comparison approach is necessary for credible assignment results, an appraiser must analyze such comparable sales data as are available to indicate a value conclusion.
     
  5. bart nathan

    bart nathan Member

    1
    Jun 9, 2005
    Professional Status:
    Certified Residential Appraiser
    State:
    California
    what about fannie or fred?
     
  6. David Wimpelberg

    David Wimpelberg Moderator Staff Member Moderator

    41
    Mar 30, 2005
    Professional Status:
    Certified General Appraiser
    State:
    New York
  7. Mike Kennedy

    Mike Kennedy Elite Member

    62
    Sep 28, 2003
    Professional Status:
    Certified Residential Appraiser
    State:
    New York
    http://www.allregs.com/efnma/index.asp?dv=0&id=a&ii=0&im=0&io=fnma&ip=/&iq=0&iv=0&iw=0&iy=0&iz=0&fc=0&fk=_&fm=0&fs=0&fv=0&sd=/&sm=1&sp=fnma&sq=_&st=_&sv=0&sx=/&sy=0&sz=0&t=0&tc=fnma/selling/part-xi/xi-ch-4/xi-406&td=0&ti=0&tm=0&to=fnma&tw=0&tv=0&tq=0&tx=/&tp=fnma/selling/part-xi/xi-ch-4/xi-406


    XI, 406.02: Selection of Comparable Sales (06/30/02)
    We require an appraiser to research, analyze, and consider influences that may affect value based on market evidence (such as closed sales, contract sales, and properties for sale in the market area; market studies; etc.). For example, if a property is located in a neighborhood that includes (or is close to) an airport or hazardous waste site or that has relatively high property taxes or vacant or boarded-up properties, we expect the appraiser to research, analyze and use comparable sales from the same neighborhood or affected area (whenever possible) in his or her analysis. This will ensure that any effect of these value-influencing characteristics is taken into consideration in the development of the opinion of value for the property.

    If a property is located in an area in which there is a shortage of truly comparable sales—either because of the nature of the property improvements or the relatively low number of sales transactions in the neighborhood—the appraiser might need to use as comparable sales properties that are not truly comparable to the subject property or properties that are located in competing neighborhoods. In some situations, sales of properties that are not truly comparable or sales of properties that are located in competing neighborhoods may simply be the best comparables available and the most appropriate for the appraiser’s analysis. The use of such comparables is acceptable as long as the appraiser adequately documents his or her analysis and explains why these comparable sales were used (including a discussion of how a competing neighborhood is comparable to the subject neighborhood).

    The appraiser must report a minimum of three comparable sales as part of the sales comparison approach to value. The appraiser may submit more than three comparable sales to support his or her opinion of market value, as long as at least three are actual settled or closed sales. Generally, the appraiser should use comparable sales that have been settled or closed within the last 12 months. However, the appraiser may use older comparable sales if he or she believes that it is appropriate, and selects comparable sales that are the best indicators of value for the subject property. The appraiser must comment on the reasons for using any comparable sales that are more than six months old. For example, if the subject property is located in a rural area that has minimal sales activity, the appraiser may not be able to locate three truly comparable sales that sold in the last 12 months. In this case, the appraiser may use older comparable sales as long as he or she explains why they are being used.
    The appraiser may use the subject property as a fourth comparable sale or as supporting data if the property previously was sold (and closed or settled). If the appraiser believes that it is appropriate, he or she also may use contract offerings and current listings as supporting data. However, in no instance may the appraiser create comparable sales by combining vacant land sales with the contract purchase price of a home (although this type of information may be included as additional supporting documentation).

    For properties that are in established subdivisions or for units in established condominium or PUD projects that have resale activity, the appraiser should use comparable sales from within the same subdivision or project as the subject property if there are any available. Resale activity from within the subdivision or project should be the best indicator of value for properties in that subdivision or project. If the appraiser uses sales of comparable properties that are located outside of the subject neighborhood, he or she must include an explanation with the analysis.

    For properties in new subdivisions or for units in new (or recently converted) condominium or PUD projects, the appraiser must compare the subject property to other properties in its general market area as well as to properties within the subject subdivision or project. This comparison should help demonstrate market acceptance of new developments and the properties within them. Generally, the appraiser should select one comparable sale from the subject subdivision or project and one comparable sale from outside the subject subdivision or project. The third comparable sale can be from inside or outside of the subject subdivision or project, as long as the appraiser considers it to be a good indicator of value for the subject property.

    In selecting the comparables, the appraiser should keep in mind that sales or resales from within the subject subdivision or project are preferable to sales from outside the subdivision or project as long as the developer or builder of the subject property is not involved in the transactions.

    Because rural properties often have large lot sizes and rural locations can be relatively undeveloped, there may be a shortage (or absence) of recent truly comparable sales in the immediate vicinity of a subject property that is in a rural location. This means that the appraiser often will need to select comparable sales that are located a considerable distance from the subject property. In such cases, the appraiser must use his or her knowledge of the area and apply good judgment in selecting comparable sales that are the best indicators of value for the subject property. The appraiser should include an explanation of why the particular comparables were selected in his or her analysis.

    http://www.allregs.com/efnma/index.asp?dv=0&id=a&ii=0&im=0&io=fnma&ip=/&iq=0&iv=0&iw=0&iy=0&iz=0&fc=0&fk=_&fm=0&fs=0&fv=0&sd=/&sm=1&sp=fnma&sq=_&st=_&sv=0&sx=/&sy=0&sz=0&t=0&tc=fnma/selling/part-xi/xi-ch-4/xi-406/xi-406.02&td=0&ti=0&tm=0&to=fnma&tw=0&tv=0&tq=0&tx=/&tp=fnma/selling/part-xi/xi-ch-4/xi-406/xi-406.02
     
    Last edited: Jan 30, 2008
  8. Pamela Crowley (Florida)

    Pamela Crowley (Florida) Elite Member

    3
    Jan 13, 2002
    Professional Status:
    Retired Appraiser
    State:
    Florida
    For the Fannie/Freddie forms, please read the certifications and limiting conditions.

    I know it's there, just can't remember which # (s) address the comp selection. It's best you know what all those certifications you are signing that you did and/or agree to anyway.

    Pay special attention to what Mike Kennedy posted. You really do need to KNOW USPAP and what is on those Fannie/Freddie forms and in the Guidelines - and know the differences.
     
  9. Dennis J. Black ASA IFAS

    Dennis J. Black ASA IFAS Senior Member

    0
    Mar 5, 2002
    Professional Status:
    Certified General Appraiser
    State:
    Florida
    Body of Knowledge

    Didn't you learn that in your classes? The MOST comparable. Seems simple to me.
     
  10. Richard Carlsen

    Richard Carlsen Elite Member

    0
    Jan 15, 2002
    Professional Status:
    Licensed Appraiser
    State:
    Michigan
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