Applying location adjustments: Adjustment protocol?

[Surf Cat]

I followed-up on your comments about the [absence of] proximity of the subject to what I thought might be potential comps in Beverly Hills. A map search reveals that properties with street addresses in Beverly Hills 90210 are within 210 feet of my subject. Please clarify the criticism.

If you're going to use Los angeles, 90210 ( Beverly Hills po) as competitive sales to Studio City..... you're sticking your head up out of the crowd for someone to throw a rock at. The median sales price for L.A., 90210 is approximately $3.3 mil and Studio City 91604 is approximately $1.8 mil. Both areas fluctuate wildly depending on the location and build quality within each area.

You're passing over East and West Laurelwood, Universal City, Laurel Canyon to get to Beverly Hills! You're out of your mind! But hey, if you can get a report by the underwriter for Studio City with a Beverly Hills Comp....kudos to you.

I think I read in a post of yours where all but 3 of the sales were outside of Studio City? If so, do yourself a favor and drop all 3 of those sales and go further back in time, up to 36 months back if you have to bracket or find a feature that the subject property has in Studio City.

Good luck....

 

[ZZGAMAZZ]

Yea it was a bear of a job. 11 comps incl 6 sold, 3 pend, 2 listings. I think 7 SC, 2SO, 2 BH. Weird IMO was that most sold comps [cept 1 with 0 exposure] n all listings adjusted into narrow range but all 3 pendings adjusted like 25% lower [per list rather than contract prices but nobodys talking...]. Subject a downright ratty SFR on less than 1 acre, OV $3.7M, but literally within spitting distance of 90210, sure AS hope to never drive the 405 again, although morning job in SC n afternoon job near Ladera Heights total 1300 for the day...what a great job this would be if consistency was the benchmark, wondering today whether licensed practitioners of any other industry shared such a common angst as residential appraisers...

 

[gregb]

If its not 90210 zip its not a comp!

 

[Surf Cat]

11 comps

That must have been quite the gross sales price spread......

 

[Tom D]

B4-1.3-08, Comparable Sales (06/04/2025)

Comparable sales that have closed within the last 12 months should be used in the appraisal; however, the best and most appropriate comparable sales may not always be the most recent sales. For example, it may be appropriate for the appraiser to use a nine month old sale with a time adjustment rather than a one month old sale that requires multiple adjustments. An older sale may be more appropriate in situations when market conditions have affected the availability of recent sales, and the changing market conditions causing their use must be explained in the report.

Additionally, older comparable sales that are the best indicator of value for the subject property can be used if appropriate. 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 if they explain why they are being used.

Fannie Mae does allow for the use of comparable sales located in competing market areas, as these may simply be the best comparables available and the most appropriate for the appraiser’s analysis. If this situation arises, the appraiser must not expand the neighborhood boundaries just to encompass the comparables selected. The appraiser must indicate the comparables are from a competing neighborhood and address any differences that exist. The appraiser must also provide an explanation as to why they used the specific comparable sales in the appraisal report and include a discussion of how a competing neighborhood is comparable to the subject's neighborhood.