Subject as a 4th comp

[Lee SW IL]

Appraising a property with a very limited real estate market.
I have three comps that work, but exceed typical guidelines. None of the three are the perfect comparables. One comp sold just over a year ago, with approx 5% increase.

The subject property also sold just over one year. So, I used the subject as a 4th comp, with a 5% time adjustment. In my opinion the sale of the subject is the best indicator of value, with a time adjustment.

But, I am being advise that this cannot be weighed in final analysis. It can only be used as support. (WHY ?, is this a FNMA guideline?)

I may have explained too much this time, and clouded what I was really trying to explain.

I'm needing some help putting my thoughts on paper.

 

[wyecoyote]

Lee here is what FNMA states on the issue.

Section 406.02 – Selection of Comparable Sales

The appraiser may use the subject property as a fourth comparable sale or as supporting data if the property previously was sold (and closed or settled). If the appraiser believes that it is appropriate, he or she also may use contract offerings and current listings as supporting data. However, in no instance may the appraiser create comparable sales by combining vacant land sales with the contract purchase price of a home (although this type of information may be included as additional supporting documentation).

Now I have yet to use the subject as a fourth or sixth comparable sale. But there may be a time that is neccessary. As stated in FNMA guidelines it can be supporting data not as the best comp. But that is FNMA guidelines and the best guidelines are USPAP. So take it for what it is. This is where they (whoever that is) are reading this.

Ryan

 

[Anonymous]

You can use the subject as a fourth comp since it is a recent sale. Under the new guidelines you will have to mention sales of the subject up to three years old somewhere in your report. If you are using the subject's sale price as a basis of comparison you must include it in your grid.

Remember you are the appraiser, you decide what to include in your report.

 

[Dave Smith]

Walt Kirk said:

Remember you are the appraiser, you decide what to include in your report.

Amen to that :!: Too often the UW thinks they get to write the report. Remember, the LO chooses the the subject, the appraiser chooses the comps, the UW underwrites the loan and the borrower pays the bills :!: :lol: :!:

 

[Farm Gal]

Ummm Ryan: please re-read the Fannie quote you posted:

Section 406.02 – Selection of Comparable Sales

The appraiser may use the subject property as a fourth comparable sale or as supporting data if the property previously was sold (and closed or settled).

Point being that IF appropriate you MAY in fact use the subject prior sale as a weighted comparable! I agree that it is best used as a 4th (5th 6th ..) sale and that you are PROBABLY better off using that 'lends additional support to the value derived from analysis of the preceeding comparables' yada yada ya...

But I have personally been stuck with several appraisals where that prior sale of the subject IS the single best indicator of value available! I have no fear nor have ever been called on the carpet for using it as a 4th, and even weighting it the heaviest in my reconciliation of market value!

 

[wyecoyote]

Lee Ann,

I do not disagree that an appraiser can use the subject as a 4th comp. I only stated that I never have at this point in time. I also stated that there may be a time that it is neccessary as of yet I have not run into that time. I also do not disagree that the prior sale may or is the single best indicator of value.

Ryan

 

[Farm Gal]

Ryan...
Someday I will learn to read what is really there instead of what I THOUGHT was there. I could whines and say I was siiick and cranky, but truth to tell I was jus' stupid!

My full apologies and... pfft pfft (feathers)... that crow tastes awful!

You 100% right, I wrong.

Lee Ann

 

[wyecoyote]

Lee Ann,

No problem I read through some comments and think I read them but don't.

Ryan

 

[Lee SW IL]

Thank you all for your clarifications.



as Paul Harvey says

good day

 

[Jo Ann Meyer Stratton]

Although Fannie Mae quidelines accept the recent sale of the subject as a fourth comparable, I have never done that because my question is why? The information is just being repeated or duplicated. But at the bottom on the grid I do put the last sale date and sale price for the subject (also all comparables). Then in my reconciliation I might comment on that the value is $xx based on Comps #3, # 5, #6 and the recent sale price of the subject was $xx, which is also my opinion of value