Neighborhood Boundaires for Rural Properties

[MadisonChase]

On page 1 of the URAR I described my neighborhood boundaries in a East of, West of, North of and South of manor. The appraisal in question is a rural property on 4.98 acres. I had to go 18 +/- miles for comps. What are your opinions of all your comparables having to be within your set neighborhood boundaries? Is it acceptable to use comparables outside your set neighborhood boundaries is there are not enough comparables within? I hope this makes sense

 

[CANative]

Just describe the neighborhood... like you did. If there aren't enough sales to do the job then go to the next neighborhood. And the next and the next. The only requirement is to explain.

What else can be done?

 

[MadisonChase]

So it would be acceptable to have a few comparables outside those set neighborhood boundaries on page 1?

 

[Tim The Enchanter]

You don't stretch the hood boundaries to include your comps.
Do like CAN says. Hopefully your hood has something resembling generally accepted boundaries.

 

[CANative]

I hope so because I've done that for more than a dozen years on thousands of appraisal assignments.

 

[Terrel L. Shields]

I do rural properties. I don't do any for secondary market. They may have UWs that are a PITA over such issues. For me the "neighborhood" in a rural property is quite large but it may be that the "market area" is even larger. Often a rural area will have a community name...or a school district. So I might say the neighborhood is locally known as "Dawn Hill" and is roughly south of Hwy. 12; east of Hwy. 43; north of Davidson Road; and west of Hwy. 59, a region of small and large residential tracts, some small farms, and a resort/golf course in addition to other recreational amenities (a city lake and park) and a private church school.
The market area, however, necessarily includes other adjacent areas due to the paucity of sales in the neighborhood. These competing areas also are in the Gentry & Siloam Springs school districts and are affected by the same sphere of market influences. The economy and demographics are generally similar between all of the areas and comparables used in the report.

 

[Pilgrum]

From the dictionary of Real Estate Appraisal;

neighborhood. A group of complementary
land uses; a congruous grouping of
inhabitants, buildings, or business
enterprises.

 

[CANative]

 

[Amy Perkins]

Neighborhood expanded due to the rural nature of the area and larger site sizes. What "they" want to see is the area defined by the neighborhood or market area you describe on the 1004MC and page 2 at the top. They are looking for consistency in your report since they cannot verify anything with MLS, because they don't pay to belong to it. Just explain everything and why you are doing it, because when you don't they get too excited. Anytime you do anything out of the ordinary because of the market you are in, explain. Don't become one of these guideline slaves if it does not represent your market. It is too important to get the value right and be consistent with your other reports.

 

[CANative]

Amy, read the Fannie thing I posted. "The appraiser must not expand the neighborhood..."