Unrealistic comps

Hi Scott -

I'm sending your post to Nick M to respond as he's going through something a bit similar right now (although it hasn't got to Underwriting yet) -

I have run across similar scenarios where the Underwriter is absolutely insistent that I use irrelevant sales in the grid - And I will... I will write a detailed addendum of how persistent they were, how the new sales in the grid mean nothing except that the client insisted on them and make it very clear that they were not taken into account (with detailed explanation as to why) and no value changes were made.  If they ask for pictures of the sales they insist upon to be added to the report, I will charge a re-inspect and/or travel fee and they will have to wait several days for the addendum.

It may sound harsh (the above), but in my reports, if there are sales that would appear in black and white to be good comparable properties, but in real life are not at all similar, I will write a statement as to why I did not choose those sales.

Also, I would certainly bracket if there are sales that might be superior and others inferior in the area but none (or few) that are similar.

Good luck - Sara

Hi Scott.. welcome to Active Rain! :)  nice post. i'm still catching up on some reports, but i couldn't resist. i'll be brief.. f'em.
my license cost me a lot of groveling, drive time, inspections, bs, unpaid reports and too much more to mention. hey yo, it is what it is.

dont cave in brother.. we are in the same boat.

and yes, comps are comps, when none are available, i tend to lean to the cost approach also. if you have accurate land values and the building isn't too old, its the most accurate approach. that is, when the SWAG approach is not implemented.

i'm also a Realtor(r), and no offence to others, but the license is too easy to get. this reeeeltor obviously doesn't know USPAP, and doesn't care about your license. ignorance is bliss.. and my PDF is locked.

later gator

ps. today i turned down $1,200 for 2 assignments that dont make sense. i'm not risking my license dude. no way Jose..

ps. I like Sara's approach of including it all in the addendum, with plenty of juicy a details. i think she is an anarchist!! i dont even make the change. I have not been challenged by an underwriter, and i will reply to them someday.. in writing and no comps that i dont feel are appropriate. back to the report..

Scott,

Funny that you posted this.  Right now I'm doing an analysis of 160+ acres with a 3-year-old home in excellent condition.

I relayed to the lender that the acreage is a high percentage of the value.  Another words the land value ratio is extremely high.  Historically, lenders liked to see 40% or less in the land.  Well..... this is certainly higher than that.  Their risk is truly in the land.

I am using the Cost Approach only.  It's most reliable!  I would like to see these agents go to their doctors and offer a self-diagnoses in order to get the meds "they think they need!".  Why should we be any different that those other professionals.  GOOD FOR YOU!  WE NEED MORE LIKE YOU!