Why different requirements of comparable sales history?

[moh malekpour]

USPAP standard rule 1-5 (b) as well as supplemental standard Fannie Mae 1004 form requires the search of 3 years sales history and analysis of the subject property prior to the effective date of the appraisal if they are available in the normal course of business.

Supplemental standard Fannie Mae1004 form also requires a search of one-year sales history and analysis of the comparables sales prior to the date of last sales of comparables.

Supplemental standard Fannie Mae form 2000 Residential appraisal review with reviewer’s selected comps and opinion of value requires the search of 3 years sales history and analysis of the sales of comparable sales prior to the date of their last sales.

Does anyone know why the search and analysis of comparable sales is one year for the appraisal and 3 years for review appraisal?

Needless to say that I usually use 3 years sales history of comparables for my appraisals but the requirement is only one year per Fannie 1004 form

 

[Mr Rex]

Looking for signs of flipping.

 

[Otis Key]

No idea but I wonder if Mike is right or maybe they're looking for appreciation or declining trends from that market data. Also, I'm wondering if it might a further manner with which to get a better picture of the market trends.

 

[moh malekpour]

Mike & Otis,
Flipping limit is usually one year, which is the requirement of one-year sales history of comps in 1004 form. You don’t keep the property for 3 years if you want to flip it.
But the question was not the reason for the search or analysis. The question was why 1 year if you are an appraiser but 3 years if you are a review appraiser.

If you are an appraiser using 1004 form, you are required to search and analyze one year sales history of your comparables prior to the last date of the sales of your comparables.

If you are reviewing that appraisal and you decided to use 3 different comps because you disagree with appraiser’s comps and value opinion, you are required to search and analyze three years of sales history of your comparables prior to the last dates of sales of your comparables. Why? both of them are appraisal reports, aren't they?

 

[Ms. Janet]

Where is that "supplemental standard" you are refering to Moh?

 

[Otis Key]

Where is that "supplemental standard" you are refering to Moh?

Uh Moh - I just pulled up the 2000 Form and I only see it saying "My research [] did [] did not reveal any prior sales or transfer of the comparable sales for the year prior to the date of sale of the comparable sale." I agree with Janet, but also know that some "investors" require a three year search and history.

 

[Mr Rex]

Also, Moe, some investors want to see if the subject's value is being propped up by flips of the comps, with sales beyond 12 months prior that would reveal a sharp jump in value, not corresponding to "typical'" market increases.

 

[moh malekpour]

Where is that "supplemental standard" you are refering to Moh?

Janet,
Compliance with Fannie Mae guideline in addition to the USPAP is considered supplemental standard rule.

Otis,
Either I have a wrong form or you have.
I have fannie mae, one-unit residential appraisal field review. This is 2000 fannie form, 1032 freddie mac form
on the page 2 of this form under the comparable grids says the following:
provide a sale/transfer history for the above comparable sales for minimum of THREE YEARS prior to the effective date of the original appraisal.
Please check your form again and let me know if I have a wrong form because I check another field review form in my form library and requiers exactly the same. I tried to attach that page here but I couldn't. If you can attached your balnk form here, I like to see it.

Mike,
I am not talking about some investors. I am talking about fannie mae forms. One is for appraisal (1004 form), one is for review appraisal (2000 form)
the fannie mae appraisal form (1004) requires 1 year sales history.
the fannie mae review appraisal form(2000) requires 3 years sales history if the review turned into appraial. can you tell me why?

 

[Ms. Janet]

Moh, I know what a supplemental standard is................

I do not know the supplemental standard you describe................it was a nice way of telling you I don't think it exists.

 

[Mike Kennedy]

probably a typo.