Subject Is Best Comp

[J Grant]

All approaches have merit...
That said, the fact that the subject needs no adjustments is its weakness as well as its strength. Because we learn nothing about where subject now fits in the market (which is how we derive our opinion ) from the prior sale except its price. We are not doing a retrospective appraisal on prior sale so we don't know how well developed support was for that price at the time of sale.

The fact that subject is the same house as itself is like us looking at a mirror at ourselves, and declaring by the image reflected back, "I am the tallest person within 5 miles." We don't know if that's true, unless you can be ranked among the most similar people within 5 miles. Line them up to stand next to you, and only then we can tell where you are in relation (tallest, shortest, in middle ).

A beauty contest is won by comparing the finalists to each other , not by one contestant marching around with a mirror reflecting her own image back to the judges!

All competition is judged against the most similar, who while similar offer different qualities. . The fastest man in the world is judged that because he competes among other elite athletes. If all he did was run a track alone, he might beat his own record or fall behind his own record , but we would not know if he is "the fastest" among his peers in a race.

 

[normando]

Using subject has my additional comp, the only usefulness I found is time adjustment.

 

[J Grant]

Subject as its own comp can be useful as a time adjustment. Then again, we don't need it as a comp for that, we can analyze its prior sale price off the grid.

When there is no change or too marginal a change for a time adjustment, the prior price of the subject as its own comp can be a problem when our opinion of value differs from it. How do we explain it then?

I believe using it as its own comp can drive an appraiser to match its prior sale price, even if appraiser does not set out to do so. Of course a subject prior sale price may very well turn out to be a good market indicator, but again, if that is the case, we don't need it on the grid since we already have the prior price for analysis and can simply reference it in commentary.

It is useful imo only when truly needed due to few sales , so few that it is needed as a sold comp. But I can see why others might use it....different preferences.

 

[residentialguy]

Pick your own poison I guess. I think I've used my subject as a comp once in my 12 years of appraisal. It was a commercial big box out in Grant County, Washington. Sales were so very few out there that I felt cornered. If I could do it all over again, I would not have done that (I was still a rookie). But, in general, I find that using the subject as a formal comparable is akin to a dog chasing its tail. Just my humble opinion.

It's not the same, esp on a re-sale. Why the prejudice against the prior sale of the subject? As long as you vet it to make sure it falls within the conditions of MV...it can be the best comp, as you have no other adjustments, like the 100s of variances with other properties you have to consider.

 

[Amy Perkins]

Making it comp 4 or 1 makes no difference. You need to state that it is a supplemental sale and does not have the full weight of a comparable sale. The reason you do not want this is because people can report higher sales prices to establish value. The reason for this is because they might have too much control over the data; as they were a party to the sale.

 

[J Grant]

I am not a big fan of using subject as its own comp, but if one is going to do it, then it's a comp, it can't be a weasel sort of ghost thing on there as a "supplemental sale"...If appraiser chooses to add it as a comp on the grid, then own doing that and give it whatever weight/consideration you choose.

Or dont' use it on the grid as a comp, and analyze it off the grid as supplemental data.

I fail to see how the homeowner can distort subject sale price information when it's a matter of public record (unless you are in a non disclosure state)

 

[Mark K]

I guess if you're lazy you could use your subject as a comp.

If it's sold within a reasonable amount of time, i.e. market, its lazy NOT to use it as one of the comps in whatever position on the grid you think is correct.

 

[J Grant]

I certainly dont' exclude subject as its own comp due to being lazy. How hard is it to clone it from subject position and not make adjustments?

It's lazier to use it instead of searching the market for additional fourth comp to support a value opinion. We disclose the subject prior price, client knows the prior price, it adds NOTHING to report to add it as its own comp except..drum rolll...the prior price! Which is already known. so adding it as comp shows the prior price twice. Whoppee doo.

Only time using subject as its own comp is a special/niche property /when there are few other sales to be found..

 

[Mark K]

Only time using subject as its own comp is a special/niche property /when there are few other sales to be found..

No, this is simply incorrect.

 

[J Grant]

That's my view, not an official view, others share my view, some share your view ...the fact that Fannie only allows it as a fourth comp shows they don't hold it in high regard ..