Comparable? That is the question. In a rural area that can get a little squishy. For example when I put in the search critieria I try to put in parameters that I would do a search on. And lenders don't want to use sale price criteria. And I understand that, but then I get these ridiculous ranges in values that have properties that aren't the least comparable due to differences in quality or other features like view. When I go through and eliminate those not comparable then it ends up with a definite price range. So typically when I know a house is going to be in that 200,000 range, I prefer to search by specific criteria such as GLA, acreage, age, and then by price range. But that's not what I put in the 1004MC, because they don't want you to search by a price range. But if I don't then I really don't get what I consider comparables. The 1004MC is all smoke and mirrors. Time to dump it.
I wouldn't say the MC is smoke and mirrors, I would say it;s awkward and not the best form, thus we end up supplementing it most of the time in our research
As far as price range , clients don't want it to be our only search, or sole search criteria. But we are "allowed" (sarcasm) to make as many searches by different criteria as we find meaningful. And at some point, a search by price range is meaningful. And though our value comes from the characteristics of competing properties to subject, at some point, the price enters into it as part of defining the typically motivated buyer.
Typically, a buyer for a 250k price home is not the same buyer for a 350k price home. Buyers are limited by budget due to income and available cash (except the ultra wealthy). Most buyers, even in upper price ranges, have a limit to what they can spend or are willing to spend, thus price range is meaningful. It's one of the first things a RE agent asks a buyer ( what can you pay).
Buyers have a top, a mid and low end of their budget. They may tell a RE agent, I can spend 220-230k but maybe more if I love the house. That buyer might stretch to 250k to buy a house they love. But they lack the income/cash to go above that. Thus, using a 350k price comp for a 250k range subject is not reading the typically motivated buyer for subject correctly. Of course there are exceptions and markets where a wide range of price is all that exists, But buyers shop in a range of affordability and usually comps tend to cluster around a certain range for a particular property, with a high or low sale the outlier.
If an appraiser can not define what kind of properties are comparable to the subject, or what comprises the "neighborhood" for a subject, they are not competent for the assignment.
