Comps No Pool

[Allen Bruckner]

I am appraising a $250,000 ranch type house here in So Florida. my question is. I have found 3 exact homes in the same sub-division. All the same except, The comps don't have pools. The subject does. Should I abandon all of these comps and go outside the subdivision or use them and adjust all three for the lack of the pool. Remember the 3 comps are identical to the suject in every way. The new set pf comps are in another subdivision and will intail other adjusrmrnts, not to mention the other subdivision has higher priced homes.

Allen

 

[Mountain Man]

Use all three in your neighborhood, and adjust for the pool. Use a couple out of the neighborhood, in a similar area, with pools to support the adjustment. Then 'splain what you did, and why you did it, so the under writer knows what you're thinking. "Sales 1 to 3 are the best and most similar sales in the neighborhood, but require a large adjustment as they lack a pool. Sales 4 and 5 are not in the subject's neighborhood, but are in a similar and competing neighborhood. They are the only recent and similar sales of homes with a pool." (if it sounds redundant, they like that )

When dealing with a situation like this, using only 3 comps is not going to cut it. You will need to use 4, 5, or 6 comps. Then explain what you did in an addendum.

It's not really hard, but over time you will learn what an under writer is looking for to support the adjustments. Bracket the comps as best you can.

:idea: P.S. If the comps with a pool are in a superior neighborhood, don't forget to adjust for location. Then your comment would be more like: "Sales 1 to 3 are the best and most similar sales in the neighborhood, but require a large adjustment as they lack a pool. Sales 4 and 5 are not in the subject's neighborhood. But are the only recent sales available of homes with a pool. These sales are in a superior neighborhood, so a location adjustment is necessary."

I need to uze my speal kech.

 

[Ghost Rider]

For me, I'd probably use the 3 comps within the sudivision, and use one from outside the subdivision as a 4th comp to satisfy the underwriter and fannie mae requirements as such.......Its up to you if you assign any weight to the 4th sale - if you think it's not comparable, and are just including it to satisfy underwriting requirements, I wouldn't use it in determining value, but I would definitely include 1 or maybe 2 comps with pools in the repot as additional comps.

 

[Allen Bruckner]

Thanks all
Allen

 

[Richard J. Glesser]

Stick with the three subdivision comps and no more. Make a supportable adjustment based on market knowledge and try to find a match pair from a similar sub to support the adjustment. Put those into your file for any underwriter request which may follow. If you're narrative explanation of the process is good and the underwriter's not having a bad day, it'll fly as is. If not, you already have the extra comps they require. (My experience has been to force the request you have an answer for already. If you lay out all your cards on the table, you have nothing to fall back on.) :usa:

 

[Allen Bruckner]

Well my Boss deceided for me. Away with the 3 comps. He wanted pools, So he chose the comps for me. I will understand this one of these day's.
Allen

 

[Mike Garrett RAA]

I would have used 6 comps, the three in the neighborhood and three in competing neighborhoods with pools to support the adjustment for pools...but I am not your supervisor.

 

[Ghost Rider]

Personal opinion here, but thats a really strage decision. I hope you don't get reviewed on the report, because any reviw appraiser worth their salt, and any underwriter who has the ability to do a public records or sales search (and most of them do thanks to AVM technology) will find those sales in the subject subdivision, and come back and ask why you used the ones from the other, higher priced subdivision. If all you have to come back with is "no pool" it's gonna be a weak argument.

 

[Allen Bruckner]

I agree but he is the cert.
Allen

 

[Ghost Rider]

Well, let me ask a dumb question - from the review appraiser standpoint - how much of a higher value did the comps from the other subdivision have?? I.E. - If the home was worth $250K as you stated based on the sales in the subdivision, what did the appraisal come in when you used the other sales?? If they aren't in line with that value, well.......I won't judge your mentor, but it will look like you were hitting numbers - never a good thing......