Finding comps when comps are hard to find... Time and distance from subject property

[Andyman]

Hello everyone. I am working on a CMA for a client and the subject property is in a rural area on about 10 acres it has a mobile in good condition and a frame house in need of some repair. As I searched for comps I found there is nothing sold within 3 miles and 6months. How far back in time should I go and how far out from the subject property to find good comps would be acceptable? Any advice or info would be greatly appreciated.

 

[Overimprovement]

As far away and as far back as necessary. But the farther away and back one goes, the more difficult it becomes to adjust for those items. 6 months for rural is way too short a time though, IMHO. I have gone back 3 years on Fannie reports. It is what it is. We can't control property characteristics or comp sales. The other option is to find closer (in time and distance) comps and adjust for all the differences. This is the essence of appraising.

If this particular property seems onerous, perhaps a local appraiser could give you some assistance (full 1004 would not be needed).

 

[Carnivore]

Your an Agent producing a CMA, so there really are no standards published for you that I know of...You setting a Price not a MV.

If I was preparing an appraisal in a Rural Area, frankly I don't care to much about distance and definitely don't care as much about date of sale.

My suggestion is find one sale that seems to be a lot like your subject or at least as close as possible. Hang your hat on that one.

Rural is tough any way you look at it. Good Luck P.S. You can always reduce price, but its not easy to increase price...unless you fix something or make something nicer etc

I define Rural as "More Chickens than people and more Cows than cars!"

 

[Terrel L. Shields]

I'd look at doing a NADA book value for the unit then adding a vacant land and site improvements value as a sort of "check" on the sales.

 

[Andyman]

Thank you all for the great info!! I understand the standards are much different for the CMA but I feel the more I understand the way an appraiser thinks the better the results come appraisal time!! I will give all your suggestions a try.

 

[TMG]

Golden rule..."compare apples to apples". Or, "use comparables, not adjustments".

If necessary, I will go back as far as 3 years (and then calculate increasing or decreasing time adjustments). My MLS has a neat "stats" tool that produces bar graphs showing the up or down median prices year to year based on your search criteria. These can then be used to derive time adj percentages.

Rural I think you could search for miles and miles, but here in suberbia, I try to stay within 2 miles and within major arteries.

 

[sputnam]

There's one rule. Use the best comparables available. Sometimes that's going to mean that you have a very ugly appraisal report. It happens. When it does, you will have to work harder to extract and support your adjustments.

 

[Salty]

I also go back 3-years like its nothing then adjust for market conditions. I do whatever it takes to stay in the neighborhood / development and locate a property needing less adjustments.

All to often in my suburban market I see reports where the appraiser went to a similar development down the road for a recent comp and did not adjust for location. In fact, I am certain, based on a limited number of reports I have looked at, this is how many of the sales here are selling at or above contract price.

What the appraiser did not understand was that, despite the homes being similar on the outside, the homes in the development down the street have always sold for XX% less or more than home in the neighborhood. I very rarely see location adjustments in the reports I get to see.

That said today perhaps these locational differences are diminished due to no inventory.