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

[Sadie]

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.

Tat is for a new a subdivison. OP stated that it wasn't new. "Note the subject is not in a new development " I think the UW got confused.

 

[Sadie]

School District usually indicates a purchaser has kids. Why buy a 3-5 bedroom home if there are no kids? In my market you can go from an A rated school to a D rated in 3-4 miles.

People without children buy big houses all the time. And not because they are planning a family, They buy them just because.

 

[shrubberyvaluation]

If it is Fannie, here is their guidelines-If the subject property is located in a new (or recently converted) condo project, subdivision, or PUD, it must be compared to other properties in the same market area and to properties within the subject condo project, subdivision, or PUD. This comparison should help demonstrate market acceptance of new developments and the properties within them. Generally, a subdivision is considered new when there are limited or no resales or the builder or developer is involved in the marketing or sale of the properties. See B4-2.1-01, General Information on Project Standards and B4-2.3-01, Eligibility Requirements for Units in PUD Projects for the definition of a new condo project or PUD.

I would say that if the subject is not in a new subdivision, then it is an infill lot and you can show acceptance with either/or sales within the subject subdivision and at least one other infill property, it does not have to be new, it just has to show market acceptance for a new home in an established neighborhood. The others seem to be referencing when the subject is a new home in a new subdivision/project. They are two different things.

But why does it have to show acceptance in a different established neighborhood? It could be accepted there and not in its own neighborhood, or vice versa. Fannie requirements seem fine, the lender's requirement is just boogling. Why not just use two in the same neighborhood outside of the same subdivision like Fannie requires. But lender can do what they want, but no point, its like wanting to know if a new construction in Manhattan is accepted in the Bronx, it really has no relevance.

 

[NC Appraising]

Tat is for a new a subdivison. OP stated that it wasn't new. "Note the subject is not in a new development " I think the UW got confused.

Agree. The uw is wrong.

But.....the op was also confused on this: The UW is asking for *2* comparables out of the neighborhood.

Why 2? Most appraisers use fannie guidelines on new construction homes, which is 1.

I posted freddie where it states 2*.

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.

*Note....it says nothing about pud, neighborhood or subdivision for the second comp.....

 

[Vermonter]

Agree. The uw is wrong.

But.....the op was also confused on this: The UW is asking for *2* comparables out of the neighborhood.

Why 2? Most appraisers use fannie guidelines on new construction homes, which is 1.

I posted freddie where it states 2*.

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.

*Note....it says nothing about pud, neighborhood or subdivision for the second comp.....

I have a feeling none of the comparable sales were new construction and the UW is asking them to provide 2 and go outside the neighborhood if necessary.

 

[shrubberyvaluation]

Agree. The uw is wrong.

But.....the op was also confused on this: The UW is asking for *2* comparables out of the neighborhood.

Why 2? Most appraisers use fannie guidelines on new construction homes, which is 1.

I posted freddie where it states 2*.

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.

*Note....it says nothing about pud, neighborhood or subdivision for the second comp.....

Freddie says nothing about neighborhood for the first either.

 

[NC Appraising]

I have a feeling none of the comparable sales were new construction and the UW is asking them to provide 2 and go outside the neighborhood if necessary.

You maybe on to something .

 

[Digger88]

Freddie

Oh yes I do remember that I will get the strange request for two outside on the occasional deal from Pulte who mention Freddie

 

[NC Appraising]

Freddie says nothing about neighborhood for the first either.

Agreed.

The op has some explaining to do.
Should paste the exact stip
Uw is reaching

Or what vermonter posted.

 

[TerryRohrer]

Usually, In NY we have schools. They are usually near a PUD or other, where a school bus can collect them. What do you have in MONTANA?

Every property is in a school district, almost all being a county. In the more populous counties, there are divisions with schools in each.