In a recent RISmedia article, Jason Kotar of Diversity Lending Group gave some minimum guidelines for appraisals based on a small survey of other lenders...
These guidelines are not intended to be all inclusive and may differ depending on the lender. They should be viewed as the minimum requirements used to set the market value by using data for comparable properties.
- Must be within a three to six month period, with similar features such as square footage.
- Must provide days on market for the subject property and comparable sales used.
- Must be within close proximity of the subject property, looking at neighborhood character as well (urban, suburban or rural).
- Must be within a one mile radius of the subject.
- Must provide one current listing or pending sale from the Multiple Listing Service to help support value.
If any of these guidelines cannot be positively addressed or supported in the appraisal, the appraiser needs to provide a detailed written explanation of the circumstances.
While CMAs are in not appraisals, these guidelines are still important to keep in mind when providing Market Valuations for prospect property sellers and buyers as they help to maximize the accuracy of the valuation and minimize risk for all parties.
Copyright 2008 by Lawrence Yerkes. All Rights Reserved.
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