This is a reminder that Comparable Sales in appraisal reports must be within 20% of the size of the subject property (in most cases). Hence, a 1,500 square foot house requires comps between 1,200 square feet and 1,800 square feet. We often get comps that we cannot use b/c they are way too big or too small.
Below are the basic criteria for valid comparable sales:
a. Size: Comps need to be within 20% of the size of the subject property.
b. Distance: Comps need to be within one mile of the subject property (in most cases), and not over any major barriers like freeways, or rivers.
c. Same Town/City: Comps need to be in the same city as the subject property in most cases, even if the comp is less than a block from the subject property.
d. Closed: Comps need to have closed in the last 90 days, in most cases. Pending sales and listings are not acceptable.
e. Lot Size: Lot sizes must be accounted for too. If the subject property is on a small lot of 6,000 sf for example, a comp on a 12,000 sf lot will have to be downward adjusted significantly in most cases.
Other Factors: School Districts, Adverse Influences like busy streets, commercial buildings, cemeteries, etc.
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