Subject as a Comp

[shrubberyvaluation]

Do you have any other Comps that adjust at a similar Value? My guess is they're hesitating as it was not an Arms-Length transaction. Go back as far as you (reasonably) need to, make a Time Adjustment if necessary, and move on. Eliminating the heartburn in "discussing" it back and forth would be worth it to me.

The comp would be an arms length transaction as the OP noted earlier. The current sale is non-arms length. Unless the subject changed significantly in the past 3 months its going to be the best locationally and physically...what you attest to in your certification if using a fannie mae form.

 

[Illuminati]

It wasn't made clear if the sale to mom (which is being considered as a comp) was arms length. It doesn't say who sold it to mom. The current sale to the son is what the appraisal is for now, which is non-arms length. The question would be if the sale to mom 3 months ago was arms length.

It was arm's length. We verified with the selling agent.

 

[Illuminati]

Do you have any other Comps that adjust at a similar Value? My guess is they're hesitating as it was not an Arms-Length transaction. Go back as far as you (reasonably) need to, make a Time Adjustment if necessary, and move on. Eliminating the heartburn in "discussing" it back and forth would be worth it to me.

The subject as a comp, after appreciation is applied, aligns with the 5 other comps adjusted values.

We believe in this case, it produces a better report since it is physically, and locationally the same, and is the most recent sale in the immediate neighborhood.

I think it is a good test of reasonableness to support the value along with the other comps.

The subject as a comp adjusted in the middle of all the other comps.

I can definitely see how using a subject as comp could be problematic but in this case, I think makes more sense to have it in the report than to not.

But yeah, probably not worth the back and forth.....

 

[Fernando]

The subject as a comp, after appreciation is applied, aligns with the 5 other comps adjusted values.

We believe in this case, it produces a better report since it is physically, and locationally the same, and is the most recent sale in the immediate neighborhood.

I think it is a good test of reasonableness to support the value along with the other comps.

The subject as a comp adjusted in the middle of all the other comps.

I can definitely see how using a subject as comp could be problematic but in this case, I think makes more sense to have it in the report than to not.

But yeah, probably not worth the back and forth.....

Just use it as a 4th or 5th comp for support. No way as Comp #1, #2, or #3.

 

[J Grant]

Does anyone know what USPAP says for using the subject as a comp?

The underwriter wants it removed; however, I think it is necessary to produce credible results.

Subject sold 3 months ago in cash to mom, and now, it is being sold to her son.

I think it reasonable to have it in the report with appreciation applied, especially since 2 of the other closest comps bracket the adjusted value nicely.

Comp 1 after adjustments 389k
Comp 2 after appreciation $392k (subject)
Comp 3 after adjustments $394k.

Thoughts?

My advice is DO NOT remove it!!

Just switch it to comp 6. While I argue against using subject as a comp most of the time, it can be done and USPAP allows it, and UW are not supposed to be instructing how to appraise - unless they see an error.

Just switch the subject to comp 6 and explain it is still on grid because the prior sale was arms length but with more consideration on comps 1, 2 and 3

THE END

added if you remove it looks like it was admitting an error and you made no error.

 

[glenn walker]

This thread is evidence in itself why its best to avoid land mines when possible.

 

[Fernando]

I'd done it before putting as Comp #5 or #6 because I felt it was important to let reader know of circumstances and for me to add more comments on the prior sale.
No problem with reviewer and made report better thought out.

 

[alebrewer]

This thread is evidence in itself why its best to avoid land mines when possible.

It's certainly evidence that appraisers are stubborn folks when it comes to performing some kind of analysis that they're not used to - even when it makes sense. "I've never done it that way, and I'm not gonna start now" should be the motto of all appraisers everywhere.

 

[Fernando]

It's certainly evidence that appraisers are stubborn folks when it comes to performing some kind of analysis that they're not used to - even when it makes sense. "I've never done it that way, and I'm not gonna start now" should be the motto of all appraisers everywhere.

Once I have the comps, in my mind it's like a work of art and I can imagine where the appropriate comps fall into place.
If the comp is relevant even if unorthodox, Fernando knows it should be there.

 

[glenn walker]

It's certainly evidence that appraisers are stubborn folks when it comes to performing some kind of analysis that they're not used to - even when it makes sense. "I've never done it that way, and I'm not gonna start now" should be the motto of all appraisers everywhere.

I never said it cant be done but have never had a value issue by not using a Subject property as a comp .
The Underwriter asked her/him to remove it and my guess is there was a reason that we do not know about.
I take the road of least resistance especially when its not going to effect my final opinion of value. If someone feels the need than fine just do it . You are a reviewer how many times do you just shake your head and say to yourself why did this appraiser even have to go down this road . I did not work at a AMC but a direct lender who we had our own fee panel and directly with the Underwriters and often one would show me something in our investor overlays or guidelines which required her to ask the appraiser to make a change As the appraiser I would have asked the UW what the reasoning was behind asking me to remove it. IF it made sense I would comply or at least try to find a middle ground with her.