How To Choose Comparables
The careful selection of comparables is very important to arrive at the right value. How I choose the right comparables is to take a look at the entire list, then determine a range of sales: low medium and high. The low range selections relate to either fixer upper or all vintage, the medium range of comparables relate to Good condition, but only some renovations, the HIGH calibre of comparables are highly remodeled with granite, all new baths and kitchen, appliances and new flooring. Every comparable tries to fit within 20% GLA sq ft size, and try to find the most recent 0-90 day sale date. So when a home is a Fixer Upper and vintage category as the house had a bathroom with problems and other vintage appeal will have comparables selected from that lower range of choices. Upon renovation if that same home has new appliances, a newer finished basement and the bathroom has new tile and is fixed with no cost to cure items then it will compare to a medium range. High caliber homes stand out as exceptionally remodeled and sell for the highest prices.
An appraiser who does not ask the condition prior to selecting comparables could have a real problem. If he/she assumes the home is highly renovated and many sales are in a certain range, but then upon viewing the inside finds out that it is a fixer upper or simply modest...comparing that house to all highly renovated comparables would be a true mistake...and the final value will end up wrong. Making Condition adjustments for one or two bathrooms not renovated, or other flooring, should be a minimal adjustment if all the comparables were selected from the Right calibre or category in the first place. This brings me back to the Low Med High range.
In my report I include a page called Comparables Evaluated, and that page shows that full range of all that COULD have been selected. More often than not, newer year built homes and larger sq ft, or larger lot homes will fall in to the HIGH price range category on that list. Selecting all HIGH range homes could end up with a lot of "misses"when comparing it to a house if lot size is way off or year built is way off, again bringing a wrong conclusion at the end.