Comp over 12 months

[JamesRockford]

We are required to use the best comps available. If the very best comps are older than 12 months I think we can use them. We just need to explain in a detailed way why the comps used were the best and how limited recent sales are.

You can ONLY use them if they are Comp #4+.

Unacceptable for Sales #1, 2 or 3.

 

[Delta85]

You can ONLY use them if they are Comp #4+.

Unacceptable for Sales #1, 2 or 3.

What if there are simply no comparables available that sold less than 12 months ago? Even going out 10-20 miles. Is the report dead in the water? What if the very best comps are older than 12 months and the few sales available that sold sooner or just not credible comparables at all? Do we use the crap comps and make large adjustments that look horrible and confuse the reader?

 

[CANative]

What if there are simply no comparables available that sold less than 12 months ago? Even going out 10-20 miles. Is the report dead in the water?


Probably. But I've always been able to find at least 3 sales in less than 12 months that could be used. And I work a very rural area.

What if the very best comps are older than 12 months and the few sales available that sold sooner or just not credible comparables at all? Do we use the crap comps and make large adjustments that look horrible and confuse the reader?

Yes. But if you confuse the reader you haven't done your job correctly.

 

[Delta85]

What if there are simply no comparables available that sold less than 12 months ago? Even going out 10-20 miles. Is the report dead in the water?


Probably. But I've always been able to find at least 3 sales in less than 12 months that could be used. And I work a very rural area.

What if the very best comps are older than 12 months and the few sales available that sold sooner or just not credible comparables at all? Do we use the crap comps and make large adjustments that look horrible and confuse the reader?

Yes. But if you confuse the reader you haven't done your job correctly.

I've always been able to find comps too. I was just wondering. I always thought the point was to use the best and most comparable comps regardless of age. Seems to me using inferior comps and making large adjustments just cause they closed more recently makes for a misleading and confusing report.

For example, if a 900 square foot ranch built in 1950 is my subject and the only available comps within 12 months are 2000 square foot colonials built in 1999 and sold for $500K my report will look odd with those sales representing comps 1-3 while comp 4 is a 900 square foot ranch that sold for $250K a year and a half ago.

 

[RSW]

How come no one actually looks these things up?

See pages D-6 and D-7 in appendix D to the 4150.2...

I just read about this last week and I can't remember where I read it. I am looking through my notes about the comps being over one year old have to be approved.

 

[CANative]

Comps in the 1,2,3 position HAVE to be less than 12 months old. Sometimes an older comp can be a better comp and it can be included in the presentation of sales. You just have to put in the 4,5,6 slots.

 

[RustNeverSleeps]

Well, there you have it, Greg is right. I did look through D earlier but missed it. FHA guidelines are the most confusing, all over the place garbage I have ever seen

 

[Patricia Sturick]

Had this same issue this past year. I was referred to refererence HUD Book 4150.1
REV 1. When I replied, I added this to my report and again explained why I used comparables over the 12 month sale date.


The following information was found on the HUD website on the webpage labeled
" Valuation Analysis for Single Family One- to Four- Unit Dwellings (4150.2)" in regards to HUD manual 4150.1 REV-1 and HUD manual 4150.2 found in the transmittal area of the manual on the second page.http://www.HUD.gov/offices/adm/hudclips/handbooks/hsgh/4150.2/index.cfm
http://www.HUD.gov/offices/adm/hudclips/handbooks/hsgh/4150.2/41502trnHSGH.pdf

A new Handbook, 4150.2, Valuation Analysis for Home Mortgage
Insurance for Single Family One- to Four- Unit Dwellings. This
handbook replaces and supercedes most of the provisions of
Handbook 4150.1 REV-1, identified below under the heading of
"HANDBOOKS".

Found also in the 4150.2 manual in appendix D - PAGE 7 as follows:

http://www.HUD.gov/offices/adm/hudclips/handbooks/hsgh/4150.2/index.cfm
http://www.HUD.gov/offices/adm/hudclips/handbooks/hsgh/4150.2/41502appdHSGH.pdf

Appendix D – Page 7
No sales over one year old are permitted except as “additional comparable sales” and would be identified as comparable sale(s) 4, 5 or 6. Properties under contract may be also be submitted as additional comparable sales 4, 5 or 6 to support trends or value conclusions observed.
Appendix D - Page 6
Comparable Selection
At a minimum, comparable selection should be based on properties having the same or similar locational characteristics as well as physical characteristics which includes: style, age, size, utility and condition.

 

[JamesRockford]

Had this same issue this past year. I was referred to refererence HUD Book 4150.1
REV 1. When I replied, I added this to my report and again explained why I used comparables over the 12 month sale date.


The following information was found on the HUD website on the webpage labeled
" Valuation Analysis for Single Family One- to Four- Unit Dwellings (4150.2)" in regards to HUD manual 4150.1 REV-1 and HUD manual 4150.2 found in the transmittal area of the manual on the second page.http://www.HUD.gov/offices/adm/hudclips/handbooks/hsgh/4150.2/index.cfm
http://www.HUD.gov/offices/adm/hudclips/handbooks/hsgh/4150.2/41502trnHSGH.pdf

A new Handbook, 4150.2, Valuation Analysis for Home Mortgage
Insurance for Single Family One- to Four- Unit Dwellings. This
handbook replaces and supercedes most of the provisions of
Handbook 4150.1 REV-1, identified below under the heading of
"HANDBOOKS".

Found also in the 4150.2 manual in appendix D - PAGE 7 as follows:

http://www.HUD.gov/offices/adm/hudclips/handbooks/hsgh/4150.2/index.cfm
http://www.HUD.gov/offices/adm/hudclips/handbooks/hsgh/4150.2/41502appdHSGH.pdf

Appendix D – Page 7
No sales over one year old are permitted except as “additional comparable sales” and would be identified as comparable sale(s) 4, 5 or 6. Properties under contract may be also be submitted as additional comparable sales 4, 5 or 6 to support trends or value conclusions observed.
Appendix D - Page 6
Comparable Selection
At a minimum, comparable selection should be based on properties having the same or similar locational characteristics as well as physical characteristics which includes: style, age, size, utility and condition.

Thanks, but you really didn't have to go to all that effort as at least two posters already provided the EXACT same answer.

 

[Tim The Enchanter]

Most weight given to comp 4 which is over 1 year old, but the only decent *&%@$! comp of the bunch. :icon_lol: