How many comps do you use?

[chad hampton]

Bracketing all these items should not enter one’s mind when selecting comparables for a property.

I get why it’s done, the worst thing you can have is a revision request, they’re time-consuming, completely kill production and you’re not paid for it, so sometimes it’s easier just to throw in a bull**** sale that isn’t really a comparable. But at the same time, you should never put a sale in the grid that you can’t defend as being truly comparable. And because it brackets the garage count doesn’t mean it’s comparable

 

[juck224]

The concept of bracketing has been bastardized and used by too many (appraisers and underwriters) as an "easy" button to (allegedly) demonstrate support for an adjustment. I have seen plenty of "comps" thrown in just for bracketing that do not add anything to a report, and sometimes they make the report worse. In many cases, using grouped data or some other type of analysis is far better than just using one sale that happens to "bracket" a feature.

Agree with this 100%. I usually make it clear when it's this dissimilar of a comp that it's providing market support for acceptance of a certain feature (e.g. a functional or external obsolescence, etc). At some point when you're using a comp so dissimilar solely to bracket a feature, how does that support the adjustment? Usually you end up with such high line and gross adjustments that the suport for that 1 adjustment could be within a 10% variance. JMO

 

[juck224]

Bracketing all these items should not enter one’s mind when selecting comparables for a property.

I get why it’s done, the worst thing you can have is a revision request, they’re time-consuming, completely kill production and you’re not paid for it, so sometimes it’s easier just to throw in a bull**** sale that isn’t really a comparable. But at the same time, you should never put a sale in the grid that you can’t defend as being truly comparable. And because it brackets the garage count doesn’t mean it’s comparable

I would never do it if it didn't result in revisions. At the same time, if I DO happen to, and it's truly not comparable, I explicitly state it is given NO weight in my final reconciliation. It may be better to discuss and ungridded comp in your SCA and how it supports whatever adjustment it may be, but I found over and over this resulted in revisions.

 

[J Grant]

The concept of bracketing has been bastardized and used by too many (appraisers and underwriters) as an "easy" button to (allegedly) demonstrate support for an adjustment. I have seen plenty of "comps" thrown in just for bracketing that do not add anything to a report, and sometimes they make the report worse. In many cases, using grouped data or some other type of analysis is far better than just using one sale that happens to "bracket" a feature.

This assumes bracketing was done poorly.

Bracketing done well is one of the best ways to credibly support a value. I have done hundreds of field reviews, and after cherry picked comps to inflate value, the next sin was not bracketing a key value feature, such as location or view.

Field reviews means searching for alternate comps to see if the best comps are used or if good comps are ignored. 99 times out of a hundred , bad reports could have been fixed by available comps that bracketed the key feature.

Bracketing works because it mirrors how buyers choose a property. Buyers do not look at charts or grouped data. They select or reject properties based on a specific set of features. If a buyer wants a lake view, that is a priority. Other buyers who do not want a lake view do not care, and will not pay the premium for a lake view.

So go out and find comps with lake views, adjust for all other key differences, and extract the lake view adustment One can expand a search for support with grouped data, but the best comps are those with a similar or same big ticket item feature.

IMO, poorly trained UW or reviewers asking for nonsense low $ value features be bracketed often mess up a report. They will insist that an appraiser bracket a half bath. Which then can lead an appraiser to add a stupid comp simply to satisfy the UW.

 

[juck224]

This assumes bracketing was done poorly.

Bracketing done well is one of the best ways to credibly support a value. I have done hundreds of field reviews, and after cherry picked comps to inflate value, the next sin was not bracketing a key value feature, such as location or view.

Field reviews means searching for alternate comps to see if the best comps are used or if good comps are ignored. 99 times out of a hundred bad reports could have been fixed by available comps that bracketed the key feature which were ignored.

Bracketing works because it mirrors how buyers choose a property. Buyers do not look at charts or grouped data. They select or reject properties based on a specific set of features. If a buyer wants a lake view, that is a priority. Other buyers who do not want a lake view do not care, and will not pay the premium for a lake view.

So go out and find comps with lake views, adjust for all other key differences, and extract the lake view adustment One can expand a search for support with grouped data, but the best comps are those with a similar or same big ticket item feature.

IMO, poorly trained UW or reviewers asking for nonsense low $ value features be bracketed often mess up a report. They will insist tha an appraiser bracket a half bath. Which then can lead an appraiser to add a stupid comp simply to satisfy the UW. iss

True, bracketing is absolutely a great way to support a credible report for lots of things (e.g. special location/view, GLA, basement finish, outbuildings, etc). You are absolutely right though that when it comes down to something like a porch patio deck count, half bath, etc it is quite silly and adds nothing to a report. I have never submitted a report with bracketing key features like locations, views, GLA, etc.

 

[J Grant]

True, bracketing is absolutely a great way to support a credible report for lots of things (e.g. special location/view, GLA, basement finish, outbuildings, etc). You are absolutely right though that when it comes down to something like a porch patio deck count, half bath, etc it is quite silly and adds nothing to a report. I have never submitted a report with bracketing key features like locations, views, GLA, etc.

Good post - I think you meant to say.... I have never submitted a report without bracketing key features like locations, views, GLA, etc.?

 

[J Grant]

The point of bracketing is to narrow the adjusted range of the comps, rather than increase it. People usually do not look hard enough for comps. Go back in time, 2-3 years if needed. Time adjustments are the simplest to make if they are needed. Go to a competing location to find a good comp.

If a sale is so dis similar that it screws up a report, it is not a comp and should not be on the grid. Discuss it instead of putting it on the grid. Putting a sale on the grid and then giving it no wieght doe not make sense. If the sale is that irrelevant or unreliable that no weight is given, what is it doing there.? It can become an example of when adding extra comps can make a report worse.

 

[juck224]

The point of bracketing is to narrow the adjusted range of the comps, rather than increase it. People usually do not look hard enough for comps. Go back in time, 2-3 years if needed. Time adjustments are the simplest to make if they are needed. Go to a competing location to find a good comp.

If a sale is so dis similar that it screws up a report, it is not a comp and should not be on the grid. Discuss it instead of putting it on the grid. Putting a sale on the grid and then giving it no wieght doe not make sense. If the sale is that irrelevant or unreliable that no weight is given, what is it doing there.? It can become an example of when adding extra comps can make a report worse.

After I learned how to find the absolute best comps and learn my market super well, my adjusted sale price range by the end is rarely beyond a 2% margin (eg, typically 395, 400, 405). Again, I agree with not putting a dissimilar sale in the grid, I don’t it’d ever be a discussion if it weren’t for brain dead UW’s. I avoid it at all costs. The few times I have is because I went back and forth numerous times and wasted too much time arguing with an UW I just gave in. I don’t think it’s correct at all. I also don’t think it’s a USPAP violation, and if it is feel free to prove me wrong. With that said, I think myself and 99.9% of other appraisers agree with that sentiment.

 

[Digger88]

as few as humanly possible to bracket important features of the subject property. usually 3 or if a lender wants it 1 active/uc.

 

[J Grant]

It is a lot easier to bracket a positive feature than a negative feature. RE agents will check "lake view" on a listing. But they almost never mention an adverse feature , such as the house backs up to a noisy road or railroad track. That can mean hours searching for a comp that backs up to similar.

The closest I saw a RE agent come to mentioning an adverse feature in a listing was a house I did that backed up to a noisy 6 lane highway. The listing described it as "convenient to transportation.:"