Good comments.
In the central Ohio region, we often run into the opposite problem - the subject site is definitely suburban, but the underwriter insists that it can't be "Suburban" if the comps are over two miles away. Comps from 5 - 10 miles are frquently necessary when we have a 90 - 130 year old house, maybe with 5 - 15 acres and a stable or old barn, that is located within 10 miles of the WalMart (10 minute drive), 15 miles to two hospitals, and has Pizza Delivery from three different shops.
This has happened where the suburbs (Can we PLEASE call it "Exurban") have grown out from Columbus to take in most of the 7 surrounding counties.
There are LOTS of homes in immediate proximity to these older homes, but they were mostly built within the past 20 years and to a lower quality standard with no acreage- not very meaningful comps. So, we go to where the comps are and the underwriter bursts a vessel over the distance. The distances can go upwards of 10 miles in cases where the subject has been thoroughly renovated. When possible, we also throw in a fourth comp - one of the newer homes in close proximity - to demonstrate that the local market supports the value.
Most underwriter's calm down with the following language:
ONE OR MORE OF THE COMPARABLE SALES USED WERE IN EXCESS OF 1 MILE FROM THE SUBJECT. THE SUBJECT IS LOCATED IN A NEIGHBORHOOD WITH GREAT DIVERSITY OF HOUSING STYLES, AGES AND SIZES. DUE TO THE LOW POPULATION DENSITY OF THIS NEIGHBORHOOD AT THE TIME OF THE SUBJECT'S CONSTRUCTION, THERE ARE VERY FEW SIMILAR HOMES WITHIN ONE MILE. ALTHOUGH THERE ARE PROPERTIES OF COMPARABLE VALUE IN THE IMMEDIATE AREA, THEY HAVE MOSTLY BEEN BUILT WITHIN THE PAST TWENTY YEARS . THEREFORE, TO MAKE COMPARISONS TO SIMILAR AGE AND QUALITY SALES, IT WAS NECESSARY TO USE COMPARABLE SALES FROM OUTSIDE THE IMMEDIATE AREA. IN THE APPRAISERS' OPINION, ALL COMPARABLE SALES USED WERE THE BEST AVAILABLE.
This dosen't work every time - some underwriters are never incorrect, ya know :wink: - but it helps any open-minded underwriter to understand the market a little better.
Just a thought, I wonder if the close-minded underwriters are consulting an AVM :?: :evil: