Can the house I am buying be used as a comp for itself since it sold in March

[sidphishus]

My appraisal came in lower than expected. In March of this year, the current owners purchased the home for $237,000 and their appraisal came in at $240,000. I am purchasing the home now, and my appraisal came in at $230,000 and they used comps that were lower than the first appraisal. My question is could the house I am buying be used as its own comp for the $237,000 sale in March?

 

[Michigan CG]

Yes, it is actually the best comparable for obvious reasons.

 

[Mountain Man]

Yes, it is actually the best comparable for obvious reasons.

Ditto, yes. M-CG is a good appraiser who knows his stuff.

 

[Meandering]

Is the market in decline?

While it could be used as a comp, a declining market adjustment might not make any difference to the opinion of value.

.

 

[Mike Kennedy]

My question is could the house I am buying be used as its own comp for the $237,000 sale in March?

That all depends on whether or not the March appraisal was inflated to support the reported March contract price or not. It may very well have been.

Only objective review of the "comparables" utilized in both the March report and the current report will clarify that to your current lender.

It may be worth obtaining a copy of the prior appraisal sending it to your lender along with a written Reconsideration of Value Request based on the analysis of both sets of comparables.

Your Lender may decide:

a. the current appraisal's comparables are indeed the most recent, similar, proximate and directly competitive with the subject home.
b. the comparables in the prior appraisal report were and the sales utilized in the current report were not.
c. to assign a Desk or Field Review to a competent Second Review Appraiser to ascertain the credibility of the current report (this would also include consideration of sales in both reports - IF identified by the Review Appraiser as directly competitive.
d. result of a Review Appraisal may support a decrease in Market Value, may support an increase in Market Value, or may indicate no change to the opinion of Market Value in the current report is required.

 

[Deleted member 128537]

Appraiser will need to explain why he used it to make sure it was an arm length transaction. Just because a house sells for $$$ doesn't mean it was a legitimate market sale as defined by the definition of market value.

I have a similar situation in my are where a person bought the house just to give themselves an easement to some property, then put the house back on the market LOWER than what they originally bought it for.

Would I use that previous sale price? No. Not an arms length transaction since the buyer was NOT typically motivated.

 

[Delta85]

Were the sales used in the most recent report ones that closed after the previous appraisal? If new data in the area indicates a decline and there are a number of sales indicating this that might explain a drop since then.

 

[chad hampton]

What is your purchase price? If it's in the same range as the march purchase, then that means 2 people (you and the current owner) were willing to pay in the $235 range for the same home. To me, that is the very definition of what the market is will to pay for a home, with all other things being equal.

Sounds like something strange is going on.

As far as using your house as a comp, yes, it is a perfect comp. Most all appraisers would agree to that. Not sure if a bank's UW would be able to wrap his head around that one, but it's a great comp.

 

[Webbed Feet]

My appraisal came in lower than expected. In March of this year, the current owners purchased the home for $237,000 and their appraisal came in at $240,000. I am purchasing the home now, and my appraisal came in at $230,000 and they used comps that were lower than the first appraisal. My question is could the house I am buying be used as its own comp for the $237,000 sale in March?

$237,000 + $3,000 = $240,000 = 1.26% difference

$237,000 - $7,000 = $230,000 = 2.95% difference

1.26% and 2.95% have a difference of only 1.23% between them.

Real estate appraisals are opinions of value, not tolerance parameters for submarines and space shuttles.

 

[glenn walker]

Sounds like we are talking nickels and dimes . Is this market strong if so the new comparable's should support the value. if not has this market turned down ? The subject could be used as a comparable but most appraisers would want 3 or 4 other sales to show the market trend.