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How long before a bad comp drops off for real estate appraisal purposes?

  • May 09 2013 - Dallas
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Answers (3)

Longest is probably six months, but they like the most recent sales.
One bad comp shouldn't kill your value, but depends on the neighborhood.
  • May 10 2013
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Comps are generally considered to be the most recent comparable sales that are not more than 6 months old for conventional loan purposes. So it is really a function of how many comparable recent sales exist, rather than just a time period. In today's fast-moving market though, it would generally be considered that anything older than 3 months would be than less than ideal.
  • May 09 2013
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To answer your question, there is no absolute timeline in where a comp 'drops off'.  You mention in your question a 'bad comp'. If is a bad comp because it sold below what you would like the appraiser to appraiser your house for or is a a bad comp because it truly is not relevant.  If it's irrelevant it should not be considered a 'comp' to begin with and shouldn't be used.

FNME recommends appraiser's use comps within six months however, many lenders want some comps within 60 days while FHA requires appraiser's to use a minimum of two comps within 90 days.

A comp outside of these suggested/required time-frames could be used by an appraiser if they feel it's relevant in reporting the transaction and could be used to assist the appraiser's reconciliation of the report. 
  • May 09 2013
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