Assignment conditions - Use At Least One Comparable Outside of Subject Neighborhood

[J Grant]

It would be misleading because I am skipping over all the comps in the subject's neighborhood to use a sale that is not relevant for the valuation.

, why do you have to skip over comps in the subjects neighborhood, include as many as you want, and they are not asking you to leave a geo area neighborhood, they are asking you for a sale outside the builder subdivision

check with your client because likely the problem is they used the word neighborhood incorrectly or don't' check with them and write an idiotic report with a not relevant sale.

 

[TN Pro]

Its pretty obvious that they likely meant outside of the subdivision.

 

[shrubberyvaluation]

The underlying reason for this is that lender's don't want the comparison based on only sales that are direct from builder to purchaser. New homes often involve extras whose contributory value and actual costs may be two different things.

If there is arm's length resale activity in the subdivision, then this requirement is not necessary. If there is resale activity, I need to know specifically why the client is requiring me to use sales other than the most comparable sales available.

It seems a stretch to go to an entirely different neighborhood just to get away from builder sales.

 

[The Warrior Monk]

Not exactly. It seems to me the word 'must' implies that it is necessary, no?

What I mentioned is the basic idea of why it is "required" for certain clients or intended users. Many times the people ordering the appraisal, or even reviewing the appraisal, don't understand the actual requirements. I've had "requirements" go away because of this misinterpretation, including this very subject.

 

[alebrewer]

I'm pretty sure whomever wrote that SLA was referencing the F/F requirement. You can always call to verify that they didn't mean 'neighborhood' but rather 'subdivision'. Seems you're building a hill to die on where it's not necessary to do so.

 

[Elliott]

OP has said,

"Client has in the engagement letter for new construction that at least 1 comparable is to be used inside the subject neighborhood and one comparable outside of the subject neighborhood."

and

"No where in that does it say the appraiser must select a comparable sale outside the subject's neighborhood."

So which is it? Suggest consulting a lawyer or psychiatrist.

 

[alebrewer]

What I mentioned is the basic idea of why it is "required" for certain clients or intended users. Many times the people ordering the appraisal, or even reviewing the appraisal, don't understand the actual requirements. I've had "requirements" go away because of this misinterpretation, including this very subject.

Look, I don't really care what folks do in their practice - I don't sign their reports. I was just pointing out: (a) the F/F requirement, and (b) that the requirement includes the word 'must'. What folks do with that information is up to them.

 

[J Grant]

It seems a stretch to go to an entirely different neighborhood just to get away from builder sales.

why does it have to be an entirely different neighborhood "? Use a similar /competing recently built neighborhood.

You don't apparently understand the reason for getting away from builder sales...........

 

[Mark K]

That's always been a F/F requirement. From the selling Guide, section B4-1.3-08:

This^^^

I feel pretty sure they meant subdivision. You can either have them clarify it or simply use one outside of the subject subdivision in the report as required by F/F.

 

[shrubberyvaluation]

OP has said,

"Client has in the engagement letter for new construction that at least 1 comparable is to be used inside the subject neighborhood and one comparable outside of the subject neighborhood."

and

"No where in that does it say the appraiser must select a comparable sale outside the subject's neighborhood."

So which is it? Suggest consulting a lawyer or psychiatrist.

The second one was referring to Fannie, the first was the client.