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VA Circular - Comp Proximity Clarification

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gregb

Elite Member
Joined
Sep 3, 2011
Professional Status
Certified General Appraiser
State
California
Veterans Benefits Administration Circular 26-17-14
Department of Veterans Affairs May 19, 2017
Washington, D.C. 20420
Clarification of Locational Requirements of Comparable Sale Properties
for VA Appraisals
1. Purpose. The purpose of this Circular is to provide clarification for distance or proximity requirements of comparable sale properties used in VA appraisals.
2. Background. In response to a recent inquiry, it was discovered that our position on the proximity of comparable sale properties to the subject property may not be clear. VA does not set minimum or maximum distance requirements between the subject and comparable sale properties. VA Lender’s Handbook chapter 11, section 7, subsection e, states: “Comparable sales should be located as close to the subject as practical.” This may have caused some confusion especially concerning suburban or rural properties where comparable sales may not be ideally located near the subject. This Circular is a clarification of current policy.
3. Action. In suburban or rural communities, the market areas may be greatly expanded and suitable comparable sales may be many miles away from the subject. In such cases, the appraiser should specify why those comparable sales were used and how they compare/compete with the subject. The appraiser should evaluate whether extended distances are normal for this market, submit a description of the market area, and determine whether the comparable sales are within the subject’s market. The appraiser should also indicate whether or not any adjustments were made for locality or proximity. If there are any other recent comparable sales closer to the subject, include a discussion regarding why they were not used. Providing detailed commentary about the market and comparable selection may reduce the number of requests for revisions of appraisals.
4. Rescission: This Circular is rescinded July 1, 2019.
By Direction of the Under Secretary for Benefits
 

A K

Elite Member
Joined
Jul 31, 2013
Professional Status
Certified Residential Appraiser
State
Maryland
I don't think VA or GSE's should have guidelines at all with regards to development of the appraisal. It just confuses people. I think inspection guidelines and reporting guidelines are OK. There should be no guidelines with anything to do with comparable selection or adjustments or things like that.
 

sandpiperapp

Senior Member
Joined
Apr 5, 2011
Professional Status
Certified Residential Appraiser
State
New York
If you look at the guideline, it is actually very reasonable in its presentation and most importantly, substance. The VA only requires explanation, not arbitrary distances.
 

KenAZ

Senior Member
Gold Supporting Member
Joined
Jan 6, 2010
Professional Status
Certified General Appraiser
State
Dom. Republic
Not sure what the change is.
I have had a rash of realtors try to force on me comps from several miles away, when there are more proximate available.

I reply that those would be excellent comps, if the subject was located in their neighborhoods!
 

timd354

Elite Member
Joined
Jan 11, 2008
Professional Status
Certified Residential Appraiser
State
Maryland
I don't think VA or GSE's should have guidelines at all with regards to development of the appraisal. It just confuses people. I think inspection guidelines and reporting guidelines are OK. There should be no guidelines with anything to do with comparable selection or adjustments or things like that.
Which exact GSE or VA guidelines do you object to regarding comparable selection or adjustments?
 

A K

Elite Member
Joined
Jul 31, 2013
Professional Status
Certified Residential Appraiser
State
Maryland
Which exact GSE or VA guidelines do you object to regarding comparable selection or adjustments?

I don't have any issues with them. Just stating the obvious that people were confused about the guidelines being hard rules.
 

timd354

Elite Member
Joined
Jan 11, 2008
Professional Status
Certified Residential Appraiser
State
Maryland
I don't have any issues with them. Just stating the obvious that people were confused about the guidelines being hard rules.
It is not the fault of the GSE's, the VA or FHA that some people lack basic reading comprehension skills
 

J Grant

Elite Member
Joined
Dec 9, 2003
Professional Status
Certified Residential Appraiser
State
Florida
I don't think VA or GSE's should have guidelines at all with regards to development of the appraisal. It just confuses people. I think inspection guidelines and reporting guidelines are OK. There should be no guidelines with anything to do with comparable selection or adjustments or things like that.

Since they are the guarantor/insurer of the loans, imo they can have a guideline...and it's just a guideline, we can exceed it whenever we deem needed for credible assignment results. Which needs an explanation, which is appropriate.

A guideline is there as a baseline threshold. With zero guidelines we would see the worst appraisal practices become a norm because that is what happens, unfortunately, when there are no guidelines, or limits to human behavior., the worst behavior has no accountability at that point..

We have speed limits on roads...why? To prevent the idiots who would speed at 100 mph endangering everyone. That's why.
 
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