What To Do When There Are No Comps

[Verne Hebert]

FNMA's requirement is the same 12 months. The wierdest SFR I have ever done, in terms of market data, I had no sale closer than 70 miles for the first three and met the requirement. Now I had a fourth and fifth that I hung my hat on for market value. Many times I have added comps beyond the first three to find market value, with the first three meeting lending requirments........so two different things sometimes. You are reconciling all of the market data collectively, and you can certainly hang your hat where you have a hat rack.

 

[DWiley]

Are you sure Danny?

That comment was based on the conversation I had with Atlanta HOC. Based on past experiences, I think it is safe to say that if I had talked with a different person or a different HOC, the answer may have been different.

 

[Mary Tiernan]

Awwww too bad you are not in my area - there's lots of sales here of manufactured houses

and they are now selling for $5-$30,000 -

 

[Don Clark]

My dilemia is that with MH's being as scarce as hen's teeth in my market, and there being only one neighborhood of MH's that are not Condo's, and 1 Condo with MH's each being a double wide condo unit, I have to use stick built or turn down the assignment. I get such a request about once every 3 years so not a real big deal. I can't create a comp, FHA requirements or not. FHA and Fannie Mae live in an Ivory Tower where common folk do not exist.

 

[Scott R Marshall]

FNMA's requirement is the same 12 months. The wierdest SFR I have ever done, in terms of market data, I had no sale closer than 70 miles for the first three and met the requirement. Now I had a fourth and fifth that I hung my hat on for market value. Many times I have added comps beyond the first three to find market value, with the first three meeting lending requirments........so two different things sometimes. You are reconciling all of the market data collectively, and you can certainly hang your hat where you have a hat rack.

Verne,


The issue here is the non-disclosure status of law in the state. I am not sure if Montana is the same but out here, it's either MLS (of which there are multiple systems for differing parts of the state, with myself having access to the 2 considered to have the best data for this market area) or realtors in some of the areas where there is no MLS. For me, 70 miles out from my subjects location is a pretty big deal, and I've always been of the mindset that if I go 70 miles east, well then I should also be going 70 miles north, south and west as well in my search for comps. In this case, I'm entering areas where either A) I'm simply trying to meet a silly 12 month guideline and/or B) I'm in markets which are not comparable and/or C) I'm in markets in which I have never appraised a property before.

 

[AnonApprsr]

Than you're not geocompetent for this particular assignment, punt it Scott.

 

[Verne Hebert]

I just got back in. I haven't read the whole thread. You must expand the radius to include transactional data to comply. Here we are non-disclosure. SFR, manufactures, conventional, log, whatever you have; you are of course going to have to set all market driven components equal..........obviously to include site value.

They get complicated sometime. Here, most often; sometime worse than complicated- a jigsaw puzzle.

I haven't picked on the Vegas "appraisers" lately. They have it nice.

 

[Lloyd Bonafide]

Than you're not geocompetent for this particular assignment, punt it Scott.

Or, if you just stall long enough, eventually it will probably cancel. (Only works well with one-time clients, or with clients you want to get rid of).

 

[PropertyEconomics]

Sometimes a property is located in a market where there are not sufficient sales to provide a reasonable opinion of value. When that is the case I think you just need to walk away from the assignment. Trying to piece an appraisal together from patches of very poor data, particuarly for an FHA assignment, is not good business practice as far as I am concerned.
I have read that others would go farther out, but I dont think those posters truly understand this market area. It is unique in and of itself. Im not saying that it cant be done, but with no data this is not an assignment I would accept. Having the ability to continue to do future FHA work is certianly not worth getting bounced off the panel on a property that you know is difficult to provide a credible opinion of value on in the first place, not because you dont know the market, but because you in fact do know the market and there are no sales available.

 

[PropertyEconomics]

Than you're not geocompetent for this particular assignment, punt it Scott.

What does geocompetency have to do with a market in which there are no sales????