Question on a UW request for 2 comparables out of the neighborhood for new construction.

[shrubberyvaluation]

It's a freddie mac guideline.

Fannie FHA only require 1.

I always include two.....you know...rejection....lower scores...less work.

It would be nice if the lender would tell us who it is going to?

Any resales? Use them.

If it is then it is a stupid guideline IMO. Why do they want two in a different neighborhood which is probably a different market area, Why not just outside of the builder control or outside of the community/subdivision?

 

[shrubberyvaluation]

With New Construction you have to have an outside development sale. Makes total sense. The number doesn't matter to me if the report is solid. 1-2-3-4, they can ask what they think they need. I have found, when UW is seeking other sales, to ASK, what they have. We know the largest Lenders & AMC's have some market data at their disposal. Put the question back to the UW, what do you have? EZ to tell if they know anything and usually with stop the extra comp request.

If it was just outside the development that would make sense, but he is being asked for two outside of the neighborhood.

 

[NC Appraising]

Unless they changed FNMA guidelines have been 1 in, 1 out and 1 in or out for new construction. Unless you have a new construction with no new sales yet then you need 2 inside active/under contract comps too.

Freddie

 

[shrubberyvaluation]

Yep. Sure did.

Not worth dying on that hill. I was going to say that but.....we are dealing with idiots (AMCs and lenders). They see new construction......have the OP to fight it, and let us know the outcome.

We do not provide appraisals. We provide forms that have a value and that meets sometimes fictitious requirements....10% line item.

Another reason this profession is a joke. I spend the majority of the time on making sure all the boxes are checked and that all comments are made...f the value....

Heck, I still get the 15% net 25% gross and it's been gone for over5 plus years now.


Fwiw, established....isn't that a no no word now?

I agree not worth dying on a hill over. Take two outside the neighborhood boundaries, and no weight. Use a non builder sale that is relavant also within your neighborhood. Explain that the non builder sale inside your neighborhood boundaries is more locationally relevant.

 

[NC Appraising]

Freddie

• Comparable sale requirements for properties in new subdivisions, units in new PUDs or units in recently converted or New Condominium Projects
  
  To demonstrate the marketability and develop an opinion of market value for units in new subdivisions, units in new PUDs or units in recently converted or New Condominium Projects, the appraiser must comply with the following requirements:
  
  • One comparable sale must be from inside the subject subdivision, PUD or project, when available. Additionally:
    • The comparable sale from inside the subject subdivision, PUD or project can be a sale by the builder or developer of the subject property
    • If there are no closed comparable sales from inside the subject subdivision, PUD or project, contract sales may be used from inside the subject subdivision, PUD or project to satisfy this requirement. However, the use of contract sales must be in addition to the three actual closed sales obtained from outside the subject subdivision, PUD or project.
    • In the event the subject subdivision, PUD or project is so new that a closed sale or a contract sale is not available, comparable sales from outside the subject subdivision, PUD or project may be used. However, the appraiser must comment on the marketability of the new subdivision, PUD or project and justify and support the use of the comparable sales from outside the new subdivision, PUD or project.
  • One comparable sale must be from outside the subject subdivision, PUD or project, and
  • The third comparable sale may be from either inside or outside the subject subdivision, PUD or project
  • When resales are available from inside the subject subdivision or project, they are preferable and should be given significant consideration as they provide a reliable indicator of the market value of units within the subdivision, PUD or project.
    
  At a minimum, at least two comparable sales must be sales in which the builder or developer of the subject property is not involved in the sale transaction.

 

[NC Appraising]

The UW is asking for 2 comparables out of the neighborhood for new construction. Note the subject is not in a new development and all of the comparables are in the same school district Hicksville, NY. Should I go get two comparables from another school district? I can see if all of my comparables were from the same development. Any help?

Is the subject a infill home in a pud development. On acerage. Infill lot in a subdivision (non pud)

New can be subjective. What is new?

Can new mean a master planned pud that will take 5-10 years to complete?

 

[NC Appraising]

If it is then it is a stupid guideline IMO. Why do they want two in a different neighborhood which is probably a different market area, Why not just outside of the builder control or outside of the community/subdivision?

I think this is where lenders get it from:

Freddie

At a minimum, at least two comparable sales must be sales in which the builder or developer of the subject property is not involved in the sale transaction.


I usually will use two outside new homes or 1 outside new home and 1 outside resale. Never a problem.

 

[shrubberyvaluation]

• Comparable sale requirements for properties in new subdivisions, units in new PUDs or units in recently converted or New Condominium Projects
  
  To demonstrate the marketability and develop an opinion of market value for units in new subdivisions, units in new PUDs or units in recently converted or New Condominium Projects, the appraiser must comply with the following requirements:
  • One comparable sale must be from inside the subject subdivision, PUD or project, when available. Additionally:
    • The comparable sale from inside the subject subdivision, PUD or project can be a sale by the builder or developer of the subject property
    • If there are no closed comparable sales from inside the subject subdivision, PUD or project, contract sales may be used from inside the subject subdivision, PUD or project to satisfy this requirement. However, the use of contract sales must be in addition to the three actual closed sales obtained from outside the subject subdivision, PUD or project.
    • In the event the subject subdivision, PUD or project is so new that a closed sale or a contract sale is not available, comparable sales from outside the subject subdivision, PUD or project may be used. However, the appraiser must comment on the marketability of the new subdivision, PUD or project and justify and support the use of the comparable sales from outside the new subdivision, PUD or project.
  • One comparable sale must be from outside the subject subdivision, PUD or project, and
  • The third comparable sale may be from either inside or outside the subject subdivision, PUD or project
  • When resales are available from inside the subject subdivision or project, they are preferable and should be given significant consideration as they provide a reliable indicator of the market value of units within the subdivision, PUD or project.
  At a minimum, at least two comparable sales must be sales in which the builder or developer of the subject property is not involved in the sale transaction.

So it sounds like its not a requirement by Freddie based on this. Nothing about neighborhood in that.

 

[Vermonter]

I think this is where lenders get it from:

Freddie

At a minimum, at least two comparable sales must be sales in which the builder or developer of the subject property is not involved in the sale transaction.


I usually will use two outside new homes or 1 outside new home and 1 outside resale. Never a problem.

You are confusing "subdivision" and "neighborhood". They are not the same thing

 

[J Grant]

The UW is asking for 2 comparables out of the neighborhood for new construction. Note the subject is not in a new development and all of the comparables are in the same school district Hicksville, NY. Should I go get two comparables from another school district? I can see if all of my comparables were from the same development. Any help?

I don't pick comps just by the school district. I don't; get it - school district are important, but not always THE decider -

Are the other comps you chose new construction or are any of them recently built and or resales?

WRT new construction, I nearly always look for at least 2 resale comps, not just new from the builder, and I like to find at least one in a similar competing outside development. Makes for a credible, well supported value that withstands challenges later