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VA Appraisal- Is Using The Subject As A Comp Acceptable?

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Charlie

Junior Member
Joined
Feb 26, 2002
Professional Status
Certified Residential Appraiser
State
Virginia
I used a prior sale of a subject property as a comp on a VA refinance appraisal. The subject had sold within 12 months of the effective date of the report and comparables were very limited. The lender has come back and said that I can not use the subject as a comp and that I need to replace it with another sale. Is there any guidance on this? Thanks in advance.
 

Walter Kirk

Senior Member
Joined
Jun 24, 2003
Professional Status
Licensed Appraiser
State
New Jersey
I used a prior sale of a subject property as a comp on a VA refinance appraisal. The subject had sold within 12 months of the effective date of the report and comparables were very limited. The lender has come back and said that I can not use the subject as a comp and that I need to replace it with another sale. Is there any guidance on this? Thanks in advance.
A recent sale of the subject property is a most important indicator of value, The lender probably wants to ignore it because they don't want to know the truth.
 

Eli

Elite Member
Joined
May 12, 2007
Professional Status
Certified General Appraiser
State
Tennessee
It is what it is. There has to be one more comp somewhere. Move the subject to the 4th, 5th, 6th sale. Put another one where the subject was. The best one you can find. Weight the sales you already have more than the additional one you add, since you obviously already had the best you could find so far. Analyze that prior subject sale real good. You might consider a good listing as a comp too in addition to the additional sale. Note revisions and why. New signature date.
 
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Eli

Elite Member
Joined
May 12, 2007
Professional Status
Certified General Appraiser
State
Tennessee
One more note. That is not the lender requesting the revision unless they have a SAR. Fix it. The lender (loan officer) cannot request a revision like you noted unless it is an ROV. In my experience, a request like you shared always comes from the SAR or the RLC. That’s like the VA is asking you to do it. You can always refer to the VA lenders handbook, but for any appraisal I do, I would have at least three comp sales in addition to the subject sale. I might not even include the subject in the grid, but consider it in the final reconciliation. But you already have included it in the grid, so I would move it in the grid now. Even if your new comp don’t look good in the grid, you can give it less weight in your reconciliation and summarize why you gave it less weight than your other comps in your sales comparison reconciliation.
 
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Eli

Elite Member
Joined
May 12, 2007
Professional Status
Certified General Appraiser
State
Tennessee
I would be very reluctant to change my original opinion of value unless the reason was like super extraordinary. Adding a comp that is not very comparable shouldn’t change your opinion of value because you are giving your existing comps more weight.
 

gregb

Elite Member
Joined
Sep 3, 2011
Professional Status
Certified General Appraiser
State
California
The OP has not revealed if the subject was used as Comp #1, #2 or #3.
 
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Eli

Elite Member
Joined
May 12, 2007
Professional Status
Certified General Appraiser
State
Tennessee
The OP has not revealed if the subject was used as Comp #1, #2 or #3.

I am not sure there if VA has a policy. I probably once knew and could find it, but I just got in a habit of using it as # 4 or higher. Or I usually just don’t put it in the grid and I use it in the reconciliation. I am thinking it shouldn’t be #1,2 or 3 whether VA, FHA or conventional.

Charlie, feel free to call the SAR or the RLC and ask any questions like you pose here. You can discuss value issues or underwriting issues like these with the SAR or the RLC. They operate in that regard similar to FHA or a regular bank underwriter. They are not being pressured by anybody on value issues or shouldn’t be anyway. There is a firewall between them and the loan officer. They are on your side. Don’t discuss value or underwriting issues similar to these with anybody other than the SAR or the RLC. It is fine to discuss other issues with your POC or the loan officer, but not value issues where you might be accused of collusion with the loan officer or others wanting to influence your value opinion. The VA SAR or an FHA underwriter or bank underwriter won’t try to influence you on value. If a loan officer or other party mentions their opinions on value, just absorb it and move on. Don’t discuss it with them. Complete an ROV if they request one through the underwriter.
 
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A K

Elite Member
Joined
Jul 31, 2013
Professional Status
Certified Residential Appraiser
State
Maryland
I always put the comps in order of closing date so if the prior sale of the subject is the most recent then it goes in as comp 1.
 
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