New construction - Comp criteria

[Doug DeMars]

How is a home that is 23 years old remotely comparable to a new construction home?

Why would you use it?

Why did you only go 2 miles looking for a new construction comparable?

Why wouldn't you not use it? Surely you've seen plenty of 5 year old homes that have been trashed and 30 year old homes that are pristine.

IMO, Something built in 1991 isn't all that dissimilar to 2014. Heck...20 years from now...finding 2 sales "so close in age" (in the same market) would be fortunate. (e.g. If the general area is mostly built-out by the late 1800's or early 1900's.)

 

[Peter LeQuire]

I'll send you some comps :new_all_coholic:

I'll take some, too, if you have any left over.

 

[Mike Garrett RAA]

Oh boy....

The first thing I would have told the underwriter..."since I am the appraiser it's my job to determine what is and isn't comparable!". Then I would have said..."I can't make chicken soup out of chicken poop...it is what it is!".

Then I would ask..."are you licensed as an appraiser?".

There are no rules, only guidelines in this situation. You can go outside of the guidelines with adequate explanation of what you did and why you did it. Quite often you will find using sales from the same builder to be THE BEST since there might not be ANY competing builders, the subdivision is unique, and a buyer wouldn't buy anything else (no suitable substitution).

We have several single builder subdivisions in this market. Quite often I will use three sales from within the subdivision and then find one in a competing neighborhood even if it really isn't a good comparable just to satisfy underwriting. I make it clear in the report "most emphasis is given to the sales of the same model in the same neighborhood" rather than a sale in a different area.

Location, location, location. First rule of real estate and often over looked by lenders and appraisers. Just ask yourself what would be MOST COMPARABLE? Personally, I am very tired of underwriters asking us to put round pegs in square holes. It is what it is...if you can't make the loan because of some stupid guideline...that's your problem and I can't fix it.

 

[residentialguy]

Good post, Mike.

It is what it is. Tell them that you gave them the best. If that's not good enough for that lender, then the lender has to tell the borrower that they are not comfortable enough with the available market support to fund the deal...but he can open up a free checking account.

Really is that simple.

 

[J Grant]

These AMC's /lenders act like there are perfect comps out there we left out on purpose. DOH.

 

[CANative]

These AMC's /lenders act like there are perfect comps out there we left out on purpose. DOH.

I'm thinking when this happens the explanation is thin.

 

[J Grant]

Nope, the explanation was fine, they come back anyway asking for a "better" comp.

Stop blaming appraisers for client idiocy.

 

[CANative]

I don't seem to have these types of problems. But then it takes me more than 3 hours to do an appraisal.

 

[J Grant]

It takes me more than 3 hours too..a lot more. People here make some silly assumptive comments at times.

 

[residentialguy]

Some people assume people are talking about them.