Here’s a simple example. How far away should a comparable home on an appraisal be? Every neighborhood and community has its own attributes, which is why it’s critical your appraiser is familiar with your particular area. But the lender, through the appraisal management company (that they probably own), is going to find the cheapest appraiser they can, who will agree to turn the report around in 2 days. It's not ideal, but you have to have data. You can calculate the market value of your home in a few different ways. You can use comps, too. 8. Needless to say, the … This is because there are usually plenty of “comps” or comparable properties that have recently sold. It significantly increases the odds of an appraisal coming in low. We just received an appraisal where the appraiser put in a home that driving distance is 23 miles from my home but in the same county. It doesn’t make sense to compare a 2500 square foot property to a 1500 or 500 square foot property in most cases, unless the market dictates otherwise. When an appraiser comes to your home, they will source their own comps to help accurately assess how much your home is worth. If your appraiser used older comps, you may be able to show that the market has changed. 3. A conventional loan calls for three comps, or comparative evaluations of similar properties within the same neighborhood. The market is too hot to keep up with Value Nation: How far away can an appraiser be? How large should the considered market area be? Greg Stephens, chief appraiser at Detroit-based Metro-West Appraisal Co., says he has encountered many situations where conventional comps are unavailable or are unsuited to the immediate situation. This article shows how. It's a two-stage step that plays a make-or-break role when it comes to the home you're under contract to purchase. November 23, 2009 . Of course we will choose the best comparables within the marketing area whether 1/10 of a mile or 1.1 miles away. They try to have each of the comparables vary in a different way. Typically, at least two comps should have same bedroom count. Coming up with a value for the property lies at the heart of this, and that part of the appraisal process relies heavily on something you cannot control -- what others have paid for nearby houses like yours. Appraisers often go more than 5 miles away for rural properties and honestly sometimes have to go back a year to get enough comps for the appraisal. First, the appraiser must make a judgment of whether or not they feel a credible opinion can be developed from the limited data in the first place. Waterfront land often carries a much higher value than land even a few blocks away from water. How far back in time can you go to find a sale? As for how far back you can go, less than 6 months is a good guideline, but there really are no "rules" for investors trying to determine the value of the property (as opposed to appraisers who … It can also be a problem in dense markets where sales are brisk. The latter does good work, has access to all market data and has time in his schedule. If an appraiser lives 50 or 100 miles away, he might not be the best fit for assigning a value to your home. Here are 5 tips for choosing the best comps for your home: 1. Appraisals can happen for a couple reasons. Comps will allow you (or rather your agent) to go back to the buyer and say, "Another three-bedroom with about the same square footage a block away just sold last month for $190,000! Go to www.realtor.com, click on JUST SOLD, and search by the property’s Zip Code 2. All good questions, all with varying answers depending on the situation. You can bring in a professional, like a home appraiser, or do it like a real estate agent would with comps (short for comparable sales). Appraisers go through an adjustment process to compensate for the differences in the properties. While value reconsiderations go with the territory and are allowed under the three exceptions found in the appraiser independence requirements under the Dodd-Frank Act, there are a few do’s and don’ts to keep in mind when addressing a Reconsideration of Value (ROV). Expert video poker play can also result in smaller expected losses per hour. Real estate professionals use comps to prepare a Comparative Market Analysis (CMA) for their clients and comparables are also used in formulating Zillow’s Zestimate® home value. A very similar house sold two months ago for $275,000. The comps the appraiser uses may be in an area that is not as pleasant or desirable as where your home is, which can … Now your lender can begin the application and order the appraisal. In such scenarios, an appraiser must go back even further to find applicable data. Comps should be properties that have sold within the last 90 days. The VA appraisal is one of the critical pivot points in the loan process. The subject property is a three-bedroom, two-bath home. It sounds like they may have to go further away or further back in time to find something that compares to your property. If the comps are so few that an appraiser is seriously considering this sort of option, my first thought would be to call the client and have a chat. Do active or pending listings count as comps? As far as Age & Condition, this is a comment I make, and go by: *Adjustment for Age & Condition, if any, is an adjustment representing the overall estimated market perceived condition, taking into account age, any updating or remodeling & overall maintained condition thereof. In 2009 the appraisers are coming from miles and miles away from the subject property, which means they have very little information about the area to be appraised. But an appraiser almost always has to vary from what they wish. Select comps as close to your address as possible. ... One has a reputation of providing poor service and the other is located 50 miles away from the subject property. Correct. Waterfront land appraisal differs from other land appraisal types. I've done countless reviews where the appraiser has stated the comps were 1 mile away. Usually, a buyer’s lender will require an appraisal before closing, but sometimes sellers get an appraisal to … If an appraiser is unfamiliar with the area or the style of home being appraised, then he or she is obligated to decline the assignment. In one Twin Cities re-fi deal, the lender sent an appraiser who was based 72 miles away, says mortgage broker Brad Ganzer. While an appraiser won’t go quite into as much detail as the inspector will, it’s still in your best interest to show off that everything is in working order. A few healthy, well-placed plants can go a long way toward making any space look fresh, modern, and clean. They are pulling “comps” for a 1000 sq ft condo that are only 450 to 750 sq ft because the banks are demanding that the appraiser come in as LOW as possible. An appraiser can make adjustments, but it will be a challenge for your unit to get the valuation that you might think it is worth.” 7. Appraisers and real estate agents use comps to get the most-accurate estimate possible of a home’s value. If you are simply trying to get a general idea of calculation methods in an area, you can … However, this process is still a fuzzy one and can be highly debatable. Go green. Generally speaking, appraisers try to use comps that sold within the prior six months. She told me that comps are based on "how the crow flies" not driving distance. Appeal an Appraiser Who Doesn’t Know the Area. The casino might be estimating that you’ll be losing an average of $40/hour and base your comps on that. However, there is no simple formula an appraiser can apply, and in some cases, appropriate comps for a particular home don't exist within that timeframe. One more or fewer bedroom is ordinarily acceptable for 3+ bedroom homes. How to Appraise Waterfront Land. Joan the appraiser doesn’t currently know the value of this house. Then adjust for the differences. Under California regulations, a motorist can demand to see the comps used by the insurer, said Cignarale of the Department of Insurance. Which seems to be the typical sales price for this size home in the area, although we have seen some sell for $90, and upwards of $100 if really nice upgrades. A lack of comps isn’t an issue only in remote areas, he notes. If you suggest comps like this to an appraiser expect two things: that the appraiser will thank you, and that their trash can will be full. Location, location, location. Comps should be within the subdivision or as close as possible within the marketing area. You can always pay for a reappraise, but I would be stunned if that has any impact on the lender. Two bedroom homes being appraised should have one or more two-bedroom comparables. I went back to look at the comps my realtor had pulled, they were all sold at prices around $84-85 per sq ft. Some banks are less strict than others so this could be a reason the appraiser … Under the standard uniform evaluation protocol, FHA residential codes, the appraiser is generally supposed to use only comps which are less than six months old...but they can go back a year, as long as they provide an explanation as to WHY...recently, with the massive number of foreclosures, banks tend to use appraisers who pull older comps … Looking at house comps is a simple and reliable way to … HI--my name is XXXXX XXXXX I can assist you. Whenever you have to go outside the community, it is far more difficult for an appraiser. The appraiser or the lender will pull a list of properties sold within the last year or six months that have the same characteristics of … Sometimes lenders place strict guidelines on what comps the appraiser can use. While it is possible to get an idea of what the condo is worth by examining similar properties and their sale prices, for a more accurate appraisal the owner or prospective buyer can hire a professional appraiser. In fact, with certain video poker games, the combinations of comps with the tiny house edge can result in an overall positive expected value for the player.