Quick Answer: How Do Appraisers Pull Comps?

Do appraisers know the selling price?

The second graphic shows the appraisals on the exact same 8,533 house but in these appraisals, the appraisers knew what price the buyer and seller had already agreed to in their contract.

You can see a massive shift in the second appraisals – the lenders’ appraisals.

Looking at the exact same 8,533 homes..

Can Appraisers use foreclosures as comps?

Under the Home Valuation Code of Conduct created by the Federal Housing Finance Agency, appraisers are neither required to nor prohibited from using foreclosures as comparables. Appraisers must draw on their expertise to conclude whether foreclosure data should be applied in a specific territory.

How do comps affect appraisals?

Comparable homes or comps are one of the most important factors affecting appraisal value. An appraiser will take a close look at recently sold, nearby homes with similar bedrooms, bathrooms, updates and square footage to your home. The value of these homes can provide baselines for appraisal value.

How many comparables are required for an appraisal?

Bare Minimum: Appraisers must use at least 3 closed sales as comps. One Year: Comps need to have sold within the past 12 months, though an appraiser can make an exception if there is a good reason to use older sales (custom home, no truly recent competitive sales, etc…).

What hurts a home appraisal?

If an appraiser compares your property to one that turns out to be an outlier as far as market value — such as a home sale among relatives for a lower cost, divorce sale or foreclosure — it can impact the appraisal.

How do you pull comps from MLS?

When pulling MLS comps, agents typically search for listings that are similar in size, condition, features, and age. These listings are ideally sold within the past six months and within a one-mile radius. In rural areas where distances from property to property tend to increase, a five-mile radius is acceptable.

How many comps are there?

When pulling comps, three is the minimum number you need. However it’s a safer bet to gather six of the most recent, similar comps that are closest to you. “Different loan types have different guidelines and criteria that the appraiser must meet,” says Swecker.

How do you fight a low appraisal and win?

Fighting A Low Appraisal ValueGet your own copy of the appraisal. … Look for mistakes. … Look for comparisons that you don’t agree with. … Make sure there are no permit issues. … Create your own (unofficial) appraisal. … Petition the appraiser for another appraisal. … Take a hard look at the appraiser. … Request another appraisal.More items…•

How many miles can an appraiser go for comps?

Most lenders have guidelines wanting appraisers to stay within a one-mile radius, but there is actually no official “one-mile rule” from Fannie Mae. Urban areas (densely populated) typically have comparables within 1 mile. Rural areas where there are minimal settled sales area available there is no distance rule.

What happens if an appraiser Cannot find comps?

A lack of comps is no excuse for not doing an accurate appraisal, Wagar says. Even in states with no MLS and no disclosure, or even if the property is a geodesic dome rather than a conventional house, any property can be appraised. If you can’t find sufficient comps, the cost approach will usually work.

Does a messy house affect an appraisal?

You didn’t have to worry about this before, but now you’re asking: can a messy home affect an appraisal? The short answer is “no, a messy home should not affect the outcome of an appraisal.” However, it’s good to be aware that there are circumstances in which the state of your home can negatively affect its value.

Do appraisers use pending sales?

Pending sales and listings are only used on the appraisal report to show what the current market is doing; appraisers do not consider these comps in their final opinion of value. The appraiser must also consider the lot size and lot utility in the valuation.

Do homes usually sell for appraised value?

Unlike the market value, the appraised value is not necessarily the price a property will be bought or sold for. … Generally, a property will not be sold for more than its appraised value, especially if a lender is financing the purchase.

Do appraisers look for code violations?

They are also looking at interior and exterior features including but not limited to walls, floors, the foundation, roofing, and landscaping. Cracks, damages, leaks and code violations will also be considered.

What criteria do appraisers use?

A qualified appraiser creates a report based on a visual inspection, using recent sales of similar properties, current market trends, and aspects of the home (e.g., amenities, floor plan, square footage) to determine the property’s appraisal value.

Can you challenge an appraisal?

If you’re aware of a recent sale that your appraiser neglected to include, notify your lender. You can challenge an appraisal that uses outdated records or non-comparable properties, and ask for a higher valuation. An experienced real estate agent can help you find more recent or appropriate comparable sales.

How are house comps calculated?

Calculate ARVTake the value of each comp and divide it by its corresponding square footage. … Add the final square footage values of all comps together.Divide by the number of comps to get an averaged price per square foot. … Multiply your property square footage by the averaged price per square foot.

How do appraisers choose comps?

To determine the current market value of a property, agents and appraisers analyze recent comparable sales in the area. … In those instances, Najm says he’s looking for properties with similar square footage and the same number of bedrooms and bathrooms. Perlson is more particular about square footage.

Why do appraisers lowball?

Another reason some appraisers low-ball is to avoid claims against their errors and omissions insurance policies-for unsubstantiated value. When borrowers default or when Fannie or Freddie requires a lender to buy a loan back because of a defect in the loan file, lenders may look to blame others to recoup their losses.

How do I pull comps?

Here’s how to do it:Go to www.zillow.com, log in with your account, and search for a property under “Buy”Click on Expand on the upper right.Scroll down until you see the Price This Home button (just below the Zestimate® price) and click Choose comps.