Woud Residential Comps Over 1 Year Old Be Used In Determining Value In A New Property Sale?

[RMZ]

Is there a cut off by date (age) when sales comps become stale in an area of rising activity, prices and are not used in an appraisal? There would be plenty of newer comps to use in determing value in a recent sale contract. Do banks set guildlines as far as comps age they would like to see in a written property appraisial? I would assume that if no new sales comps were available to the appraiser then they would hold more weight in calculating a property's value.

Thanks RMZ

 

[Terrel L. Shields]

The appraisers judgment is certified to their independence in developing a value. Guidelines are just that. Sales within six months are preferred, one year is common. However, except FHA you can use even older sales when similarity exists that in the appraisers opinion makes it more comparable.

"Time" per se is not the adjustment rather "market conditions" reflect changes in values due to fluctuations over time. When there is plenty of data appraisers weight the most recent sales when otherwise similar and proximate. Rural properties are oft problematic and appraisers prefer "cookie cutter" homogeneous neighborhoods as easier assignments.

 

[Meandering]

RMZ, said: (My bold)
"Is there a cut off by date (age) when sales comps become stale in an area of rising activity, prices and are not used in an appraisal? There would be plenty of newer comps to use in determing value in a recent sale contract. Do banks set guildlines as far as comps age they would like to see in a written property appraisial? I would assume that if no new sales comps were available to the appraiser then they would hold more weight in calculating a property's value."

A bit confusing but,
if there are plenty of new comps and the market is active, there should not be a need or reason to use comps over 1 year old.

Generally newer comps would be given the greatest consideration in the final opinion of value, but that depends on the specific property and how comparable the newest comps really are.

Yes, some lenders will specify that they don't want comps over one year, or anything else they don't want. It is up to appraisers to decide if the appraisal can be competently completed via fulfilling the wants of the lender. Sometimes it's possible, sometimes it's not possible and appraisers will pass up the assignment until the lender loosens the requirement or some other market activity happens.

But I think you might get the best answers here by telling us why a comparable that is more than one year old has become important to ask the question?

We can not use comps, just because they sold at a number somebody else likes.

.

 

[miktay]

We can not use comps, just because they sold at a number somebody else likes.

Oh come on, Marion! How else do we keep the Realtors happy?

 

[bnmappraisal]

We can not use comps, just because they sold at a number somebody else likes.

(my bold and should be in quotes)
I see the OP has disappeared - not unusual. But either way, I agree with the above, but would change the bold to "sales." Just because a property sells does not make it comparable to another property. I get this often from homeowners ... "the one down the street ...." Well, yea, that sold for $258k ... it's also twice the size of your house with a screened in pool and, and, and ....

 

[bnmappraisal]

Is there a cut off by date (age) when sales comps become stale in an area of rising activity, prices and are not used in an appraisal? There would be plenty of newer comps to use in determing value in a recent sale contract. Do banks set guildlines as far as comps age they would like to see in a written property appraisial? I would assume that if no new sales comps were available to the appraiser then they would hold more weight in calculating a property's value.

Thanks RMZ

To your question, and as stated above by the other posters, generally speaking clients/lenders prefer to see closed sales/comps within 6 months of the effective date of the report. When this is not possible, then sales/comps of up to 12 months is generally also acceptable; this usually requires comments. IF this is ALSO not possible (12 months) the appraiser sometimes then goes back farther in time. This almost always has commentary added. I've had to go back 1+ yrs before for a property. This was a somewhat unique property and there just weren't other sales/comps available.

 

[Meandering]

(my bold and should be in quotes)
I see the OP has disappeared - not unusual. But either way, I agree with the above, but would change the bold to "sales." Just because a property sells does not make it comparable to another property. I get this often from homeowners ... "the one down the street ...." Well, yea, that sold for $258k ... it's also twice the size of your house with a screened in pool and, and, and ....

Were you are.

In the patch towns, you use what sold in each town. Comparability is location based way ahead of other considerations. Not every place is suburbia.

Yup, found one just like it that sold in the past 90 days but is 90 miles away, because all the other sales in town where a year ago, or twice as big/small/old/ugly, so I didn't use them.



You guys living the good life with 100 comps within 5 miles to chose from, just don't git us rural folk.


.

 

[Restrain]

Got a barrier island here, have used comps 2 years old. Unique market, access by boat only, etc. all depends on the market.