Special offer

URAR Form Questions: Part 1 – Active & Sold Comparable Sales

By
Real Estate Appraiser with Estimation Nation Corporation

Ever since the new URAR forms came out, I have been debating the active and sold comparable listings field with my fellow appraisers and so I'm hoping to turn that debate into a larger circle of professionals to attempt to get an answer that everyone might agree upon.

My co-workers are very specific about the criteria they set for the comparable active and sold sales while I tend to make it a broader spectrum and add sales that are bracketed with the usual age and size, but leave the criteria open to condition. 

URAR active and sold

Recently, I reviewed a very thorough appraisal from a very respectable firm and it looked as if they listed all the actives and sold from the entire zip code in the fields. 

I have yet to find anyone who has given me any absolute guidelines as to what should be entered in these fields, nor have I heard of an appraiser being questioned by a lender as to what criteria they are using in these fields.

Insight anyone?

Comments (20)

Nick M.
Certified Residential Appraiser- West Palm Beach Real Estate - West Palm Beach, FL
Realtor-Appraiser in West Palm-South Florida Real Estate Appraiser

Hi Sara, great topic! these are the things that some of use wonder, but don't really get t discuss with others.

Ok, I'll go 1st.. as for me, I include anything that would be included as a comparable sale in the report, plus extend the sq.ft. difference a little more and include those as well. Basically, if it would be substituted as an alternative choice or option for someone looking to buy in the market, I'll include it.  this means it would include a 'comp' that may exceed typical guidelines by a little more than I may feel comfortable as using it as a sale in the grid.  

I've heard some people say if its a condo, they only use condos in the same project,.. but I will include anything from a nearby & competitive project as well.

I'm curious to see how others will respond...

time for some learnin', eh?

enjoy the weekend Sara.. see you later gator!

Feb 08, 2008 04:59 AM
Jennifer Monroe
Indigo Home Team powered by Compass - Charlotte, NC
Real Estate REALTOR®/Broker/Designer
Nope! Just here to say 'hey!' to my homie-girl!!
Feb 08, 2008 05:17 AM
Sara Goodwin
Estimation Nation Corporation - Portland, OR
Portland, Oregon Appraiser

Hey Nick - It sounds like we kind of have the same idea about these fields - Thanks!  Your comments are always appreciated around these parts.

Jennifer!  I keep thinking I need to call you... soon

Feb 08, 2008 05:39 AM
David Hintz
Accurate Appraisals & Consulting of AZ - Maricopa, AZ
AZAppraiser
Sara  -  Because both lines state "comparable", I provide the numbers for properties based on the same search criteria used when searching for comparables for use in the grid.  I wouldn't use a zip code as my search area because it would exceed a mile radius from the subject.  The 1 mile radius search area, which is what I use, also provides the data needed to calculate the Absorption Rate for the neighborhood/market area - as Michael said.  I also provide data for the Absorption Rate of the same search area for all residential properties. 
Feb 08, 2008 08:43 AM
Jennifer Monroe
Indigo Home Team powered by Compass - Charlotte, NC
Real Estate REALTOR®/Broker/Designer
You're thinking right!!
Feb 08, 2008 11:16 AM
Todd Hurst
Desabrais & Company Appraisals - Queen Creek, AZ

Hello All! My take on this is that these two fields are specific to the comps that represent the pool of sales most similar to your property. In other words, these are the results that you get when you search your market with known property characteristics. The selection of your "comparables" should be coming from this pool.  The front page is for the "neighborhood" range. I believe that the intent of the forms question is three fold:

1. Where is the subject property in the range of its most similar comparables over the past 12 months?

2. What are the active listings of similar properties in the makert area indicating currently, and

3. It is a measure of liquidity or oversupply/in balance etc.

Example:

A house appraises for $150,000 based on 3 - 6 comps (sold, pending, listings). 

Exposure time is 0 -3  months ( time required to have sold the property interest being appraised )

Sales over past 12 months: 120, from $137,000 - $165990

Current Listings: 30, from $138990 - 175,990

Typical DOM 30 - 90

This is a balanced market because the listings are being moved at a rate that will equal the current sales per month within the typical days on market. Also, the current level of listings are priced slightly higher than the sales.

This is also why an UW will call you if you type in "resales" in the fields. I agree with David on this.

 

Feb 08, 2008 11:18 AM
Jeremy Cowin
Jeremy Cowin Appraisals - Altadena, CA
Hello!  I agree with David on this one.  ONLY IF I have LIMITED comps I will use the entire city's ZIP CODE.  However, I approach the search with the same bracketed criteria I used to find my comps. As for Nick's comment about someone only using comps within the same complex, that would skew the entire market data.  Even as usable comps for a condo, shouldn't there be comps OUTSIDE of the complex to show what could be a substitution?  As long as one is well bracketed with the property characteristics, even if your comps are dated and over a mile, if that's how you are bracketed, than that's your data.
Feb 08, 2008 12:07 PM
Sara Goodwin
Estimation Nation Corporation - Portland, OR
Portland, Oregon Appraiser

I think this is great that you all take these fields so seriously, when I was under the impression that so many appraisers just slapped some numbers in there (I'm sure many still do... ).

David - I agree, a full zip code search is ridiculous in any metropolitan area (the exception might be rural), but I was just using that as an example due to the numbers that I saw on the one appraisal I was reviewing  .

Todd - Thank you!  The explanation and breakdown is spot on -

Jeremy - Condos are a relatively new thing around here (a decade or so for the most part), so it's still not uncommon to only find one condo complex within a 1 mile radius in the suburbs (we just pray that 3-6 units have sold in that condo within the past 6-9 months... )

Michael - You are such a show-off ;-)   You know... I never understood the 'cash equivalent' line ... if it was really cash equivalent, why don't we all pay cash and pocket the potential interest?

Feb 09, 2008 05:02 AM
Greg Myers
G L Myers Real Estate Services - Chapel Hill, NC
I use the same criteria I use to search for comparable sales to find the listings. The comparable sales I use are all from the past year that matched the criteria for sales to be considered in the report (which typically does not include the entire twelve month period the form requests.) It is my belief the intention of the information is to indicate how the sales chosen relate to the sales available. 
Feb 09, 2008 07:04 AM
Michael Zollo
Coral Springs, FL
Certified Residential Appraiser, South Florida, FH

Hi Sara, I would also agree with Nick and Michael, but I've reviewed some reports where the Appraiser was playing with the numbers. The area had 2 older subdivisions that overlap each other, and have the same style of home. The Appraiser only included the data, for the smaller subdivision that the subject was in. So his report only showed 20 active listing, while it should have shown 75!

Feb 12, 2008 03:20 PM
Anonymous
Mike Kennedy Cert.Res NY
Ladies and Gentlemen, Good Morning.  Methinks perhaps some of us have lost sight of the pre-printed criteria on the form itself.  That section clearly requires indicating ONLY "COMPARABLE" listings and closed sales .......not ALL.  Ideally the result of ones' analysis of ALL sales within whatever is defined as the LOCAL market on Page One. Filtering "all" sales and listings down to the most SIMILAR, proximate, and recent. Appraisers' judgement as to which factors are COMPARABLE should be explained i.e. the same criteria applied to selecting the COMPARABLES in the SCA to Value.    Suggest not making this section unnecessarily more complex or difficult than necessary. Simple is as Simple does. 
Feb 19, 2008 10:26 PM
#11
Sara Goodwin
Estimation Nation Corporation - Portland, OR
Portland, Oregon Appraiser

Hello Greg - That was my impression of what this field is used for... I'm just not even sure if UWs bother to look at it.

Michael - 75 actives that are similar in the area?  Wow!  I think you might be hard pressed to find 75 actives of any condition, size, age, etc in one [1 mile-ish] area around here.

Hi Mike - That was what I thought, but I use a loser term of 'comparable' when selecting sales for these fields, because my assumption is that the UW is looking for what my initial search might show.... adding in sales (and actives) while ignoring condition and appeal -

Feb 20, 2008 03:32 AM
Michael Zollo
Coral Springs, FL
Certified Residential Appraiser, South Florida, FH

Sara, The subject's area is mostly, very small tract homes 2/1, 900sq ft, 5000 sq ft lots. Many 3 bedroom units have, most likely had a none permitted carport conversion, for the 3rd bedroom. I say about 40% are non owner occ, investment homes, with about 10% vacant. This area went from about $60,000 to $80,000 in 2000, to over $220,000 to $250,000 in early 2006. Needless to say, what goes up, must come down!

Feb 20, 2008 04:48 AM
Alisa McKeel Willson
Appraisal Pros in Texas - Huntsville, TX
Certified Res. Appraiser

I too use the same search parameters for these fields as I use for comps for my grid.  It is how I understood the form's wording.

It does seem funny though when I look at some one else's appraisal report and see that the appraiser used all listings and closed sales in the area.  No consideration apparently for GLA and other factors.

Here's another question:  Do you take the figures from your local MLS or do you use the ones from services like NDCdata?

I use the MLS -- while I subscribe to NDCdata I do not use it for those fields because there is no way to filter out the transfers that occur when the banks repossess a property.  So how skewed are those figures for those who use NDCdata or similar data service??

 

Feb 20, 2008 05:19 PM
Michael Zollo
Coral Springs, FL
Certified Residential Appraiser, South Florida, FH

Alisa,

I was using Realquest for the closed sales data, but switched to using MLS about 6 months ago. I feel it gives me a better picture of the area, but it's a trade off. You might miss a few FSBO sales, but your not including the foreclosure transfers to the bank. The FSBO sales tend to fall within the price range, so it would only effect the number of units sold. That being said, in areas that traditionally don't use Realtors, I would use Realquest or NDC for closed sales data. I've never did this before, but I will be putting in my addendum page something like, The data for closed sale that have closed with in the prior 12 months on page 2, may include units, that were not closed sales, but were bank repossessions transfers. As I say, CYA (cover your *##).

Sara,

Thanks once again for your thought producing posts, they make one stop and think, instead of just plodding though the day.

Feb 20, 2008 10:58 PM
Sara Goodwin
Estimation Nation Corporation - Portland, OR
Portland, Oregon Appraiser

Alisa et al - I usually use the same parameters I had used on my preliminary search prior to inspecting the subject property (plus 6 months = 12 total).  That includes tax and mls sales (actives and pendings)

Michael - Thank you ... I really want to post a mock comp grid for people to use their standard adjustments and see what the different values look like... what do you think?  Is that too much like... work?

Feb 21, 2008 02:54 AM
Anonymous
Larry

This is HUD analysis in the 4150 appendix D update.

Comparable Data Pool

The appraiser is required to report the number of comparable properties currently offered for sale, as of the effective date of the appraisal, and the number of comparable sales in the subject neighborhood, within 12 months of the effective date of the appraisal, in this section.  Unlike the neighborhood price data, which includes all sales, this section focuses only on those properties that are comparable to the subject, not the universe of sales.

If there was difficulty in locating comparable properties, i.e. the subject is a "rambler" or "rancher" and one or more of the comparable properties was a "split level" or "split foyer", etc., then for purposes of this section, all such properties in the subject's neighborhood are to be treated as comparable and counted.

Hope this helps.

Feb 29, 2008 10:33 AM
#17
Sara Goodwin
Estimation Nation Corporation - Portland, OR
Portland, Oregon Appraiser
Brilliant - Thank you, Larry - I always assumed since there was a small section for high and low neighborhood prices and the wording used (which says 'comparable') that it should be only those considered as comparable properties.  I still broaden my search to ignore condition for the sake of showing the full spectrum...
Feb 29, 2008 12:13 PM
Anonymous
Marc
I take all sales within 20% of the subject's sq.ft. within the defined neighborhood for the past 12 months. 
Mar 06, 2008 03:41 AM
#19
Sara Goodwin
Estimation Nation Corporation - Portland, OR
Portland, Oregon Appraiser

Hi Marc - What about basement space? age? condition?  Do you narrow down your criteria or is it broader?

I find with the new 1004MC sheets, it's better to be broad so that you have enough qualifying information to add into that extra form, but before I was using what I might only consider comparable to the subject.

Hi Lana - Interesting that you don't include pending sales in the 'properties currently listed for sale'.  Do you instead enter them into the 'comparable sales' boxes or do you leave them out all together?  I enter pending sales under 'properties currently listed for sale' as their not definitely closed (and with as many 'sale fails' these days, they might be active listings again soon)

Apr 26, 2009 04:33 AM