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COMPS DISTANCE

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Nancee

Freshman Member
Joined
Jan 22, 2003
Professional Status
Certified General Appraiser
State
Florida
I am appraising an exceptional, new construction home just west of A1A and the ocean (in Florida).

Here's my dilemma..........I can find reasonable Comps (similar in style, amenities and GLA), however, four of the five are more distant from the subject than the standard "one mile".

If I explain the reason for expanding my search (ie no new construction with similar situs) is this good enough for most underwriters?

I'd appreciate your input.
 

Mike Simpson

Senior Member
Joined
Jan 30, 2002
Nancee-

Absolutely. The more atypical a property is the greater the need to expand the search parameters in time and distance to locate comparables offering similar physical characteristics compared to the subject property.

Often times these comparables are situated in neaby competing neighborhoods offering similar locational influences and amenities. Often times additional support can be provided with comps which have sold and closed outside the 12 months reporting guidelines. Their use is permitted as additional support per FNMA Reporting Guidelines.

Just explain why you've expanded your search parameters, all should be fine (hopefully the Underwriter reads text addendums).

-Mike
 

Richard Carlsen

Elite Member
Joined
Jan 15, 2002
Professional Status
Licensed Appraiser
State
Michigan
Use the best and most comparable sales and let the distance fall where it may as long as the market is similar. Put in one or two additional comps to demonstrate market levels and the marketability of such houses. You have to use what you have, despite distance.

Also, remember that you can go back 12, 18 even 24 months if that will help you get sales in the immediate area. You can use these as long as you explain in the report that there were no recent sales and that there has been no substantial change in the market.

Distance? I once did an appraisal on a one of a kind circa 1908 stone house in Alpena. I used 5 comps and the nearest one was 85 miles away from the subject. Never got a call from the LO or UW because I explained what was going one in the report.
 

Dave Smith

Senior Member
Joined
Jan 14, 2002
Professional Status
Certified Residential Appraiser
State
Wisconsin
Nancee:

As many of us on the forum has stated many times in the past: Explain, explain, explain!

I completed a shore home appraisal today for XYZ Home Loans with distances to the three comps of 6 1/2 miles, 14 1/2 miles and 24 miles.
Those distances are not at all uncommon in my market area. I described my market area, the market dynamics of shore home buyers, the limited numbers of sales in the price range ($725,000) and the need to expand the market to find any comps at all.

Fortunately all three comps were fairly current and not too bad as comps go. The gross adjustements were only 17%, 15% and 4%, with only a $30,000 price spread between the three. The assessment as of 1-01-02 says $668,900.

Stay tuned but I doubt the UW will call. If the UW wants better comps I will sweetly ask "where can I find them?"
:D
 

Eric Boggs

Sophomore Member
Joined
Feb 23, 2002
Professional Status
Certified Residential Appraiser
State
Florida
Hey Nancee,

I see you are in the Boca. I grew up there and lived in Boca for 30+ years. I worked as an appraiser for 13 years for Pete Ross. Then I moved to Charlotte, NC. Just wanted to drop a line and say "hello."

Eric
 

Larry Lyke

Senior Member
Joined
Feb 2, 2002
Nancee --

AND, as you enter this phase of your career, start a document on your computer of these clever phrases that you create that seems to satisfy the appraisal and belay underwriters as to your knowledge, expertise and ability to handle a situation.

The next best reason for doing this is every time you use the old phrase you will find a better or tighter way to say it. AND, eventually you will learn the phrase (meaning!) so this creative literature flows right off your fingertips every time your wiggle them and into a report so effortlessly you can do it in a mental fog.
 

Jeff Horton

Senior Member
Joined
Jan 15, 2002
Professional Status
Certified Residential Appraiser
State
Alabama
I jump up and down with excitement if I get comps within one mile! Double Wides, whoops. Manufactured home often have comps 30-40 mile apart around here.

Yo have gotten some good advice here.
 

Oregon Doug

Senior Member
Joined
Jan 15, 2002
Professional Status
General Public
State
Oregon
Nancee - as you appraise truely exceptional, unique and/or very high end residences - let the subject tell you how broad the market is and let the market tell you its value.

I once appraised a 40,000+ sf home in the SF Bay area that had been built in the late 1800's. It had a solid copper roof and included a gate house that was larger than most homes. The comps came from three western states.

Go where the market sends you.......... Oregon Doug
(be careful on the competency issue)
 

Nancee

Freshman Member
Joined
Jan 22, 2003
Professional Status
Certified General Appraiser
State
Florida
Many Thanks to all of you who took the time to reply :)

Your advice has helped solidify my thinking for this assignment .


Regards,

Nancee
 
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