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Traineee Comp questions

Jim Bartley

Senior Member
Joined
Jan 20, 2002
Professional Status
Certified Residential Appraiser
State
Virginia
The problem with using older sales is the influence can change over time. I've had a number of sales with what appears to be an adverse influence only to find the effect is 0. In really hot markets buyers tend to not discount things like a busy road.
 

shrubberyvaluation

Junior Member
Joined
May 2, 2012
Professional Status
Appraiser Trainee
State
Maryland
The problem with using older sales is the influence can change over time. I've had a number of sales with what appears to be an adverse influence only to find the effect is 0. In really hot markets buyers tend to not discount things like a busy road.
Correct, roads can get busier, or less busy, and market conditions can change. There are all sorts of problems when market data is limited, but you need to make a judgement call on what is the most relevant to see the market's reaction.
 

Tom D

Senior Member
Gold Supporting Member
Joined
May 22, 2015
Professional Status
Certified Residential Appraiser
State
Pennsylvania
long ago when i sold real estate, i asked a couple why they like the house on the 12 lane big city highway. you don't have kids playing in the street, she responded.
 

Fernando

Elite Member
Joined
Nov 7, 2016
Professional Status
Certified Residential Appraiser
State
California
Common sense would tell you who in their right mind wants to live on a busy street unless it's for commercial.
There is a negative factor. If not, some other factors would come into play like maybe larger lots on such busy streets.
 

Bill75

Member
Supporting Member
Joined
Dec 18, 2015
Professional Status
Certified Residential Appraiser
State
Texas
Don't you think you need a sale on a busy street to support the influence (adjustment) on market value?
I don't know where you're located in Texas, but in my market over the last year, these so called "negative externalities" are mainly non factors due to high demand and people are not caring if the house is located on a major thoroughfare or next to transmission lines. Multiple offers indicates such. Do your due diligence though and see if there is any market reaction.
 

Tim Hicks (Texas)

Elite Member
Joined
Jan 15, 2002
Professional Status
Certified Residential Appraiser
State
Texas
I don't know where you're located in Texas, but in my market over the last year, these so called "negative externalities" are mainly non factors due to high demand and people are not caring if the house is located on a major thoroughfare or next to transmission lines. Multiple offers indicates such. Do your due diligence though and see if there is any market reaction.
Had two last month. Both on busy streets, selling for about 5% less than interior lots. I did have a listing from the same street about $100,000 over everything, though.
 

gorillakimchi

Sophomore Member
Joined
Dec 23, 2020
Professional Status
IT Professional-Appraisal Related
State
California
yes, always better to have at least 1 similar locational influence. kinda like how did you figure out the adjustment. all answers above me are good, and correct.
go back further, travel future, don't accept it. but that being said, if you don't have any locational comps, just explain it, explain it. depends on the tolerance of the lender. some may really be annoying, so it's better to find that comp now, than having to do it later. you can always use it as comp #4 if the other comps are really more better.
Thanks for your wise advice, sir :)
 

Rick Phillips

Member
Joined
Jul 2, 2004
Professional Status
Certified Residential Appraiser
State
District of Columbia
The subject is on a busy street. Do I need to find a closed comp on a busy street or it is not necessary?

You want to understand the contributory value of the subject's individual features, and you also want to know the penalty it has for negative attributes. Fronting a busy road (unless you're a McDonald's) is probably negative. If you don't have a recent sale of a substitute property on a busy road, look at what happened last year, or the year before, or the year before. Find out what the difference was between a sale on a busy road vs. a sale on a "quiet" one. Extract a percentage. Then do it again .... Do it three, four, five times, till you feel good about how much lower a busy-street property sells for vs. the exact same quiet-street property.
 

johnnykkla

Freshman Member
Joined
Sep 8, 2021
Professional Status
Appraiser Trainee
State
California
Thank you all you guys so much for answering my question. I really appreciate all the input.
 

Fresh Start

Sophomore Member
Joined
Jun 30, 2018
Professional Status
Retired Appraiser
State
California
Regardless of whether its a busy street, a water access, a hill view, etc., the best approach to show market reaction is to find a similar comp. But your not done with just finding similar comp, make sure you explain in your commenting why you included that comp and the reasoning. This is more important than just the comp being added, they lenders want to know the logic behind your reasoning. Always make sure you explain why you included comp X, and Y etc.
 
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