Distance Of Comps Explanation

[Jeff Horton]

First FHA appraisal. Comps are going way off from the house because of the rural location. First sale is in the same general area is 7 miles. All the others (I only have 4 sales I consider comparable sales) are going to be 12-18 miles. On and FHA will they just accept and explanation or should I expect lots of questioning on this?

Should I use the 4th sale and explain that was all the the sales I could find or just stick it in the file in case they ask for another sale?

 

[Jo Ann Meyer Stratton]

As someone who goes 35 miles for comparables for everything quite frequently, explain, explain, explain. I have a very detailed explanation of the county--only 8% privately owned, residential area consists of a two mile wide 35 mile long strip, only 20-30 residential sales of all types per year in county, population of the county, population of each city, main economy, location of additional support facilities fifty miles away in another county, lot sizes range from 6,000 square feet to 40 acres, zoning for the entire county is one unit per 36 acres but building permits are issued for any sized site, etc, etc, etc. Then when I finally get to describing each comparable in lots of detail, they give a sigh of relief that my comparables are only 35 miles away and 6 months to 18 months old, with only 20% to 70% gross and net adjustments. So I can't emphasize enough, explain, explain, explain, and then explain some more!

 

[Mike Garrett RAA]

As long as you explain should not be a problem. You can't create the comps, they are what they are.

Henry Harrison's Illustracted Guide to the URAR has typical comments for this sort of thing and is an excellent reference book for new appraisers.

COMPS OVER ONE MILE AWAY USED:

Comparable sales over one mile away were used because they are the best available in this _____________ (small community, rural area, neighborhood). Expanding the search area to a radius greater than one mile developed sales that are still within the same marketing area. These sales are the best comparables to the subject property and are therefore used in this report.

Another idea....

I conducted a search for sales within a one mile radius of the subject, and finding none I have expanded the search area to include all of ______________ (community, marketing area, MLS area). It is common to use comparables more than one mile distant in this marketing area.

 

[Pamela Crowley (Florida)]

The somewhat rural nature of the subject market area makes the properties there diverse in size, age and construction. Sales are limited and sales comparable to the subject are scarce causing the search for comparable sales to expand in distance. After researching all sales throughout the subject market area, the comparable sales used are considered the newest, nearest, most similar qualified and verifiable sales found at this time.


I can't remember the last time I was questioned about this. FHA understands having to go over 1 mile and even over 15 miles as long as you explain what the market is and why you did it. They do not want a comp over 1 year so don't do that.

Jeff, take it easy on yourself. Just do the appraisal, fill in the VC, and send it in! I'm betting that you're a pretty good appraiser and will be just fine!

 

[Jeff Horton]

Jeff, take it easy on yourself. Just do the appraisal, fill in the VC, and send it in! I'm betting that you're a pretty good appraiser and will be just fine!

Yes dear.

You sound just like the other female appraiser I work with. She says basically the same thing when I ask her stupid.... I mean hard questions. B)