Picking The Best comp

[bkbandit]

Just wanted to get a idea of how other appraisers pick comps, and maybe some reasoning behind it. These are the Ten closest and newest sales for the subject. Our company, as rule uses 4 sales, an active and a pending if possible for comps. Which do you thibnk are at do you think is the 4 best sales comps? Location should not matter, thats why I didn't include the location.


Price Year B B Date GLA Lot Dist
SUBJECT $44,500 1944 2 1 03/30/1978 1,895 5,150 0.00
Comp #1 $395,000 2000 3 2 05/06/2008 1,870 3,501 0.59
Comp #2 $408,000 2000 4 2 03/25/2008 1,870 3,501 0.6
Comp #3 $331,000 2000 3 2 06/02/2008 1,698 4,078 0.63
Comp #4 $325,500 2000 3 2 06/02/2008 1,698 3,509 0.64
Comp #5 $492,000 1910 3 2 03/17/2008 2,020 10,980 0.65
Comp #6 $500,000 1984 4 2 04/30/2008 1,766 8,873 0.66
Comp #7 $355,000 1969 4 2 04/30/2008 1,548 6,055 0.68 POOL
Comp #8 $451,000 1979 4 3 04/01/2008 1,830 6,969 0.91
Comp #9 $383,000 1982 3 2 05/06/2008 1,608 6,630 0.92
Comp #10 $389,000 1982 3 2 05/22/2008 1,549 6,000 0.92

Have fun!

 

[VolcanoLvr]

You need to find dwellings of the same era with similar B&B count, regardless of distance from property. Other than comp #5 your sales are 'too new.'

IMHO, without add'l info about the subject, i.e., renovations, etc., the nearby sales you show are not truly comparable.

 

[RSW]

I'm with Dave. I think I would do more searching for better comps. A reviewer would have a field day with these comps.

 

[Nate2]

They have these questions in text books, but the text books provide more info. Why did your subject sell for 10% of your comps sale prices? Do not use all comps that were built in 2000. If location doesn't matter then condition certainly does. More info needed.

 

[Mike Kennedy]

SUBJECT $44,500 1944 2 1 03/30/1978 1,895 5,150 0.00

Unless the above contains a typo........ then ..... none of the 10.

 

[Carnivore]

Looks like three+ bedroom is the market:

substitution
The appraisal principle that states that when several similar or commensurate commodities, goods, or services are available, the one with the lowest price will attract the greatest demand and widest distribution. This is the primary principle upon which the cost and sales comparison approaches are based.

In other words the subject must be worth less then the lowest sale in that list

functional inutility
Impairment of the functional capacity of a property or building according to market tastes and standards; equivalent to functional obsolescence because ongoing change renders layouts and features obsolete.

He may be able to fix this issue:

curable functional obsolescence
An element of depreciation; a curable defect caused by a flaw in the structure, materials, or design.

curable depreciation
Items of physical deterioration or functional obsolescence that are economically feasible to cure. Economic feasibility is indicated if the cost to cure is equal to or less than the anticipated increase in the value of the property.

If he can not fix this issue:

incurable functional obsolescenceAn element of depreciation; a defect caused by a deficiency or superadequacy in the structure, materials, or design, which cannot be practically or economically corrected.

Which means the appraiser either must find similar comparables to develope market data indicating the cash equivilancy of this obsolesence for adjustments purposes.

and/or

must employ only 2 bedroom locationally and physically similar comparables in the report.

Also, Dont forget due to age there probably additional issues with exterior Design and Appeal, energy efficiency, etc

 

[Elliott]

I need a two bedrom comp, you can go back to the first of
the year.

 

[Appraisal Santa Fe]

I try to bracket as many items of the subject as possible. Keep searching your comps.

 

[J Grant]

Location should not matter? Location is everything. The best comp is a subsitution that the buyer would buy if subject were unavailble. If subject is located in an A plus school district with well maintained newer homes and a comp is 1/2 mile away and same sf but in an inferior school district with deffered maintenance and older homes, the same buyer would not buy it, that is the criteria.

 

[Mztk1]

To add to Dave and RSW, #5 may actually be too old. Its sale price is up there and it may be due to it being historic and/or renovated.

You definately need a 2 BR 1 Bath house.