Appraisal Checklist (Page 4 of 7) in pdf

Is the source of data

Yes

If No – Appraiser must re-verify the data with a

41.

acceptable?

party that is acceptable or use additional sources.

NOTE: The appraiser must use a source that

provides quality sales data that is confirmed or

verified by closed or settled transactions. Data

source cannot have a financial interest in the sale

or financing of subject property.

Are the comparable sales

Yes

If No – Appraiser should adequately explain why

42.

located within subject

he has chosen comps outside of the neighborhood

neighborhood based on the

and why a competing neighborhood is comparable

location (urban, suburban,

to the subject neighborhood.

rural)?

§ Is the subject Rural, which may require comps

further away than normally desired?

§ Are we in a location that is < 25% built up?

NOTE:

§ If the subject is located in a

§ The following will likely result in inflated property

rural area that is relatively

value.

undeveloped or one in which

- Leaving the neighborhood (market area) for

properties often have large

comps (when local comps are available).

lot sizes, reasonable

- Not confirming details of comps (i.e. failing to

comparables may be a

report and adjust for seller concessions, failing

considerable distance from

to properly adjust for quality/condition issues).

the subject property. If the

§ If appraiser has to leave the neighborhood to

subject property is located in

obtain a better comp, they should explain “why

a suburban or urban area,

better comps are not located w/in the subject’s

comparable properties

market area”.

should generally be in the

- Consider an older sale in immediate area.

immediate vicinity of the

- Consider a listing as added support.

property since suburban and

- Request price ranges of houses in the other

urban areas are usually

neighborhoods.

more highly developed.

§ Leaving the neighborhood IS justified when:

§ Pay attention to the map as

- Site influence (water, golf course, etc.).

well as the proximity to

- Few sales, few listings (undersuppl y ).

subject.

- Unique area (historical, etc.).

- Rural or non-conforming area.

§ Leaving the neighborhood IS NOT justified when:

- No sales in neighborhood high enough to

support contract price or refinance amount.

- Subject is unique for the neighborhood.

- Subject is largest in the neighborhood.

- Subject is newest in the neighborhood.

- Lender has request e d it.

Are there three comparable

Yes

If No – Appraiser must adequately explain

43.

sales that have closed within 6

reasoning for using comps older than 6 months.

months of the appraisal date?

In Stable Markets

§ Older comps may be used if the appraiser

believes it is appropriate and selects comps that

are the best indicators of value.

§ The entire appraisal (neighborhood section, i.e.

marketing time and comments) should

adequately support the need for using older

comps.

In Declining Markets

§ All comps should be < 12 months old.

§ If all comps are older than 6 months, obtain at

least 2 additional recently closed comps.

§ If recent comps are not available, obtain analysis

of recent listings from appraiser.

§ If appraiser indicates there are no recent comps

or listing, appraiser must address the market

conditions and fully explain adjustments to

ensure appraised value is not overstated.

§ Third party resources can be leveraged (AVM,

etc.); however keep in mind data may lag behind

the current market, especially if declining.

Is property in a new

Yes

If Yes – Appraiser must provide at least 1 comp

44.

subdivision or a new (or

from the subject subdivision or project and one

recently converted) condo or

comp from outside the subject subdivision or

PUD project?

project.

NOTE: At least one of the comparables used

MUST be outside of the influence of the

builder/developer/seller, and it is preferred that any

comparables from within the subject subdivision

not involve the builder or developer of the subject

property.

Intellectual Property of RMIC

Page 4 of 7

Last Revision 10/ 31/07

Appraisal Checklist Page 4

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