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Prior Sales On Comps

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GaryDodd

Freshman Member
Joined
Oct 24, 2002
This should be cut and dried, but I'm having trouble confirming what length of time is required to go back for prior sales histories of comparables. My mentor says 3 years. It clearly states 3 years for the subject in USPAP 2003, but for the life of me I can't find any indication for the comparables. I ASSUME that it is STILL 1 year for the comps, since that has been the de-facto standard up until this year.

Is it 3 years or 1 year?
 

Richard Carlsen

Elite Member
Joined
Jan 15, 2002
Professional Status
Licensed Appraiser
State
Michigan
My understanding is that it is 3 years on the Subject and 1 year on the comps unless the lender requires otherwise.

But then, I'm probably wrong because I only have two more reports to write before I head to Canada for 7 solid days of pike and walleye fishing. It's hard to worry about such things when there are rods to pack and lures to choose.
 
Joined
Feb 16, 2003
Professional Status
Licensed Appraiser
State
California
:p I get my info on comp sales from FastWeb (First American), it comes from the assessor. If the dates and sales prices are not there or one or the other is not posted, I just write Not Available. If anyone wants info not available, they need to request a Chain of Title report from their favorite title company and forward it to me. (pre-paid, of course) The fact is, all information in this world may not be available.
 
Joined
Jan 13, 2002
Professional Status
Retired Appraiser
State
Florida
For USPAP it's 3 years for the subject and 1 year for the comps with Fannie the same. For a brief while, either Fannie or FHA or whoever was stating 3 years for the comps also, then changed it back to 1 year on the comps. So, there was a time that it was a supplemental guideline for one of the biggies and required for the comps too.

From there, it's up to the individual lenders supplemental guidelines of which it's a toss up. Most just don't know what they want and other than the big names in lending, nobody seems to have any of this writing. Some ask for the 3 years on the comps and some don't.

IMO, make it easy on yourself and just do the 3 years on everything.

Examples:

08/30/2002, $154,900,
PubRec & MLS

08/30/2002, $154,900,
PubRec & MLS, REO Sale

No other prior sales
found since 1992
 

Rick Neighbors

Senior Member
Joined
Jan 19, 2002
Professional Status
Certified Residential Appraiser
State
Texas
Gary,

It might behoove you to check your comparables for previous sales, it might make you question a particular sale.

But, on the other hand, why would an underwriter be concerned about a sale of a comp that is over 1 year old? Try using a comp that is over 1 year old and listen to them squall! :)

I glanced at USPAP 2003 but didn't see anything carved in stone on the subject of previous comp sales. I also looked through the 2003 FAQ book, nothing there either. But I did just glance at them, there might be something buried that would require considerable reading to find.

LSI sent out a notice concerning the 3 year rule on the subject, and they kinda included comps also. I sent them a request for the line and page in USPAP where I could find the 3 year rule pertaining to comps. Next request from LSI had dropped the 3 year requirement on comps. ???

Good Luck,

Rick
 

Ross (CO)

Senior Member
Joined
Jan 17, 2002
Professional Status
Certified Residential Appraiser
State
Colorado
The subject-3 / comp-1 ruling has been clear enough. If I am already in the respective databases and I see a prior sale of 3 years and 2 days ago....or 1 year and 19 days ago....I AM going to post that prior sale date and price rather than use a a canned line like "no prior sales in last 3 (or 1) years". I am either over-diligent or I'm stupid. Just give whatever the prior date/price is that you do find. Not providing a prior sale does NOT stop them from using our report data for AVM & CVI-building, anyway. Before you know it they'll ask for 5 year / 3 year, and another round of confusion will ensue.
 

Brad Pack

Junior Member
Joined
Jan 15, 2002
Professional Status
General Public
State
California
Someone PLEASE show me where USPAP requires the comment and analysis of prior sales for the comparables!!! NOTE: Fannie/Freddie and HUD require 1 year for comps, not USPAP. However, as always, if you violate Fannie/Freddie, HUD or VA guidelines, technically you violate the Supplemental Standards Rule.

Come on people, this is USPAP 101. Sorry, but this topic is almost as irritating to me as the "professional appraiser" who still "estimates" value.

Like fingernails on a chalkboard...
 

Wally Jones

Senior Member
Joined
Jan 23, 2002
Professional Status
Certified Residential Appraiser
State
Florida
Well, maybe it's just fingernails lightly scraping the chalkboard............

While it's true that USPAP doesn't state any requirement for analysis of prior sales of comparables, the inferrence is that it would be good appraisal practice to do so. I agree it's all too easy to attribute supposedly "official doctrine" to USPAP without taking the trouble to go see for ourselves if it's "in there" or not. Since we're involved in a profession that some feel is part science and part art, and since it still involves a large percentage of human input, no document will ever be able to precisely define the details of appraising. So it's left up to us to figure it out through experience, research and talking amongst ourselves.

In the meantime, Advisory Opinion 1 appears to think we should be looking at comparable sales in a similar light as the subject:



"The requirement for the appraiser to analyze and report sales history and related information is fundamental to the appraisal process. Just as the appraiser must analyze pending and recent sales of comparable properties, the appraiser must take into account all pending and recent sales of the subject property itself. This is not to say that the agreed price in a pending or recent sale of the subject property is necessarily representative of value as defined in the report, but the appraiser’s failure to analyze and report these facts may exclude important information from the sales comparison approach to value. Information pertaining to the current market status and the sales history of the subject property may also be useful information for the determination of highest and best use or the analysis of market trends."
 

Mike Garrett RAA

Elite Member
Gold Supporting Member
Joined
Jan 14, 2002
Professional Status
Certified Residential Appraiser
State
Colorado
I prefer three (3) years for both the subject and the comps...makes life much easier!
 
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