Profile picture for CassandraLobo

comparable homes for appraisal

Is there a rule about comparable homes for an appraisal? I had my home appraised in my neighborhood for a refinance and they would only use ranches as comparables even though the ranches had two less bedrooms, one less bathroom, and 1500 less square feet! They said they could not use two stories as comparable even though they were also smaller than my ranch with a walk out? Is there a law or rule about this?
  • February 27 2013 - Greeley
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Answers (3)

Fannie Mae guidelines recommend that properties used as comparables be within 1 mile of the home being appraised, 1.5 miles if absolutely necessary. Additionally, the comparable homes should have been sold within the last 6 months but ideally the last 60-90 days. In areas with lots of tract homes, this is workable. In many other areas, such as my region of North County San Diego for instance, this is simply undoable. We often have to focus on homes in similar communities if nearby homes don't produce accurate comps. You need someone who understands your market. Contact a local Realtor about getting a BPO (Broker Property Opinion). If that doesn't help, it might be worthwhile for you to consider hiring an independent appraiser and presenting his appraisal to your lender. 
  • February 28 2013
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Some lenders use in house appraisers when you go for a loan.  They may or may not follow the Uniform Appraisal Standards that licensed appraisers do.

As a rule you cannot adjust a comparable home by more than 10%.  1500 sq feet less would probably be a pretty significant adjustment.
  • February 27 2013
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Profile picture for MaryBeth Frye
Appraisers try to use sold comparables that are as close to the subject property as possible in location, style of home, size of home, size of lot, number of bedrooms, number of baths.  It is not always possible to find a comp, so any/all of those characteristics are considered and whatever is available is used.

  • February 27 2013
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