How long the comps we can go back?

[Carnivore]

Search the Fannie Mae Selling guide on comparable selection

B4-1.3-08, Comparable Sales (11/06/2024)

This topic contains information on selection of comparable sales, including:

selling-guide.fanniemae.com

Age of the Comparable Sales​

Comparable sales that have closed within the last 12 months should be used in the appraisal; however, the best and most appropriate comparable sales may not always be the most recent sales. For example, it may be appropriate for the appraiser to use a nine month old sale with a time adjustment rather than a one month old sale that requires multiple adjustments. An older sale may be more appropriate in situations when market conditions have impacted the availability of recent sales as long as the appraisal reflects the changing market conditions.

Additionally, older comparable sales that are the best indicator of value for the subject property can be used if appropriate. For example, if the subject property is located in a rural area that has minimal sales activity, the appraiser may not be able to locate 3 truly comparable sales that sold in the last 12 months. In this case, the appraiser may use older comparable sales as long as they explain why they are being used.

 

[Tom4value]

Just get an purcahse loan assignment in. The contract price is high. I only find one comp sold in Jun, 2022 with such high price. I was heard we can't use the comp more than 2 years ago, even with time adjustment? Can someone confirm that?

Also, per ACI system, the final appraisal value must be bracketed within comps' price range. Is it true? Thanks!

David, I read the posts and I see you got beat up about trying to match the contract price. However, I saw no questions about the actual property.

My question is, are you dealing with a unique property?

 

[shrubberyvaluation]

Just get an purcahse loan assignment in. The contract price is high. I only find one comp sold in Jun, 2022 with such high price. I was heard we can't use the comp more than 2 years ago, even with time adjustment? Can someone confirm that?

Also, per ACI system, the final appraisal value must be bracketed within comps' price range. Is it true? Thanks!

Problem is if market conditions differ along its quite meaningless

 

[David S]

Just get an purcahse loan assignment in. The contract price is high. I only find one comp sold in Jun, 2022 with such high price. I was heard we can't use the comp more than 2 years ago, even with time adjustment? Can someone confirm that?

Also, per ACI system, the final appraisal value must be bracketed within comps' price range. Is it true? Thanks!

I submitted report on Monday base on what I did comps market analysis and grid adjustment, even final value is below contract price. Now lender came back to request add one comp on the same street but sold 26 months ago. The price was close to contract price. What's the best way to handle that? Shall I add grid as a comp with less weighted or have to turn it down totally? Is there any rule or USPAP to say we can't use 2 years ago sale as comp? OTOH, I pull the local market sale data, it shows right now the local market price IS JUST around 2022 high point. Suggestion(s)? Thanks!

 

[shrubberyvaluation]

I submitted report on Monday base on what I did comps market analysis and grid adjustment, even final value is below contract price. Now lender came back to request add one comp on the same street but sold 26 months ago. The price was close to contract price. What's the best way to handle that? Shall I add grid as a comp with less weighted or have to turn it down totally? Is there any rule or USPAP to say we can't use 2 years ago sale as comp? OTOH, I pull the local market sale data, it shows right now the local market price IS JUST around 2022 high point. Suggestion(s)? Thanks!

Is there a reason its a better comp? More physically similar? More locationally similar? Or is this just to commit fraud.

 

[George Hatch]

Is this 2022 sale the same one you referenced in the OP?

The only way I would use this particular sale in an appraisal report is if none of my recent sales are at all comparable and this is the only sale that IS directly comparable. If this sale was common for its time then there would be more than just one of them. Speaking of which, what do the 2022 sales which were comparable to THAT property look like?

No one sale makes or breaks. You're looking for what's most probable among the many, not the one special buyer+one special seller.

 

[David S]

Is there a reason its a better comp? More physically similar? More locationally similar? Or is this just to commit fraud.

Yes. The same floor plan, about 100 feet away. IF use this as best comps, it could reach contract price. But no matter how, I can't use 26 months sold comp as the best to set final value, right? Last month market price is similar to 2 years ago. So I can add it into grid with no or zero time adjustment? Set it as less weighted? Also, I have to consider other recent comps as well, right? 2 or 3 comps are withing same complex with a little different floor plan, sold in last 2 months.

 

[George Hatch]

Does the 2022 sale have comps that supported it? Because if it was an outlier in 2022 then that's not a great benchmark to be bringing into your current dataset.

You need to look at this point because you will need to justify whichever decision to make to use or not use it in your current appraisal.

 

[J Grant]

I submitted report on Monday base on what I did comps market analysis and grid adjustment, even final value is below contract price. Now lender came back to request add one comp on the same street but sold 26 months ago. The price was close to contract price. What's the best way to handle that? Shall I add grid as a comp with less weighted or have to turn it down totally? Is there any rule or USPAP to say we can't use 2 years ago sale as comp? OTOH, I pull the local market sale data, it shows right now the local market price IS JUST around 2022 high point. Suggestion(s)? Thanks!

Not THIS move by the client is crossing the line. The client picked an older, higher price sale that happens to be on the same street for no other reason than to hit a SC price this sale is over 2 years old. The market was red hot in 2022 with many prices the result of bidding wars and I have seen properties that sold in 2022 re sold for lower prices recently.

A client can ask for an additional comp for support or ask an appraiser why they did not use X comp, however a client is not supposed to instruct the appraiser ( use this comp)

You have some choices - do not use the sale, comment that the client asked you to add this sale, and that the reason that it was not used is that the price is an outlier, and even though it is on the same street, it closed 26 months ago in a different market cycle.

Or add the comp, make a downward adjustment for market conditions in 2022 , and give it very little weight ( whether you adjust or not for Market conditions.

You keep asking if USPAP allows you to use sales over 2 years old - yes they do, USPAP does not address how old or how far away a comp needs to be. The fact that you are asking this is scary - and the issue is not how old a sale comp is, though it is best practice to use more recent sales for obvious reasons, (and clients prefer it for obvious reasons) the issue is why we are using that sale - IMO the fact that a sale was on the same street is not a reason unless the street itself is so special -

 

[Fernando]

You can use an older comp but it's an additional comp. Time adjustments are very difficult and I give less weight to such older comps.
Clients want 3 comps usually less than 6 months so give what are available.
You reconcile given the data you have.