Subject as a Comp

[alebrewer]

The sale by Mom to son was not an arms length sale.

I don't think that's the scenario the OP is presenting. Agreed, though, that you'd generally only grid the subject's prior transfer if it was an arm's length transaction.

 

[Fernando]

I had a situation like this several years ago. I used it as either 4th or 5th comp.
I thought it sold overpriced 6 months ago.
Homeowner thought his house should have been worth more than my appraised value.

 

[Illuminati]

Thanks for all the help!

 

[shrubberyvaluation]

The appraiser can place all the weight he/she wants to on it. And on a private or Non-UAD report I am more open to it. BUT If its in a UAD Report when it gets run through the system with that Subject and it also on a UAD Comp Grid the new report is going to blow the Big Green Machine up. Its almost a certain going to the review desk. I don't need any most headaches in life and as a former long time reviewer I learned there are certain things that will get you pulled over. Yes you may be fine but why create a situation where you end up jumping through hoops and writing rebuttals. I can think of 99 different ways to get to the same destination without getting pulled over. Again its a business decision.

Its unfortunate that we have to make business decisions to not use the best comp available in fear.

 

[shrubberyvaluation]

Unless there is no market activity, it doesn't make sense to use the subject to value itself. J Grant has it exactly right. It's redundant.

Say the subject sold 3 times in the past two years. Most recent transfer was last week. You would never grid all three of the subject's transfers, adjust for time, and then call it a day.

I would add others too, but its the best locationally, and physically if it hasn't changed. I think there is some cert some says we are suppose to pick comps based on some of that.

 

[shrubberyvaluation]

The sale by Mom to son was not an arms length sale.

It sounds like the appraisal is for now when its being sold to the son and the sale to mom which is being considered as a comp was arms length? Would have to know, but if the comp is an arms length transaction I would use it if it hasnt changed drastically.

 

[Bobby Bucks]

I’ve done some stupid things, but two things I’ve never done, I’ve never used a single wide manufactured as a comp for a subject that is Q1 quality….and I’ve never used the subject as a comparable. Even AMC team leaders know better then that.

 

[shrubberyvaluation]

I’ve done some stupid things, but two things I’ve never done, I’ve never used a single wide manufactured as a comp for a subject that is Q1 quality….and I’ve never used the subject as a comparable. Even AMC team leaders know better then that.

Why is that? first one makes sense, second one does not.

 

[TJSum]

If the prior sale was a cash transaction, how do you know it was arms length and at true market value? What happens if they did a straw deal $100,000 above market value just to set up the appraiser for the second transaction? Of course you can prove all of that with true comparables that are not the subject, which is what a real appraisal would do using comparables that are not the subject in the first place. If one wants to grid the subject as an additional comp (4th or more), have at it, but yes it is redundant, or just another way of explaining that prior transaction of the subject.

 

[Illuminati]

If the prior sale was a cash transaction, how do you know it was arms length and at true market value? What happens if they did a straw deal $100,000 above market value just to set up the appraiser for the second transaction? Of course you can prove all of that with true comparables that are not the subject, which is what a real appraisal would do using comparables that are not the subject in the first place. If one wants to grid the subject as an additional comp (4th or more), have at it, but yes it is redundant, or just another way of explaining that prior transaction of the subject.

Arm's length is easy. Email or call the agent for verification. It's kind of the same thing for all of your comps regardless whether it is the subject or not.

Sales prices and adjusted values were inline with the 2 other best comps and 3 additional comps in the report.

Basically it is being used because it is relevant, produces a more credible report, and is being used as test of reasonableness.

It is also the most recent sale in the neighborhood.

But I can definitely see how it could mess things up if it sold for more than market value.