Why Didn't You Use That Sale? How Appraisers Choose Comparable Sales
By Darren Ryals, State Certified General Real Estate Appraiser
Sometimes we are asked why we didn't use a certain sale in our appraisals. There can be various reasons why.
5 Reasons a Sale Isn't Used as a Comparable
Comparable Sales
Why a Sale Isn’t Used
Five common reasons a sale you know about may not appear in your appraisal.
It Isn’t Truly Comparable
The sale may differ from the subject property in ways that matter.
It’s Too Old
Older sales may no longer reflect the current market.
It Hasn’t Closed
The sale may not have actually closed yet.
It’s in a Different Market Area
Nearby areas can have higher or lower values than the subject’s area.
There’s No Sale Price
Common in MissouriWe may know the sale happened, but without the price, it can’t be used.
Farm · Commercial · Home appraisals | Missouri · Illinois · Iowa
Disclosure Laws: Why Missouri Sale Prices Can Be Hard to Find
Disclosure Laws – Specifically, sales prices on real estate transactions may or may not be available depending on which state you are in. This is required in many states, but not all. It is not required in Missouri. It can really limit the availability of good usable data to real estate appraisers.
Disclosure Laws
Sale Prices Aren’t Always Public
Whether a sale price is available depends on which state the property is in.
Many States
Sale price disclosure
Required
Sale prices must be disclosed on real estate transactions.
Missouri
Sale price disclosure
Not Required
Sale prices don’t have to be disclosed, which can limit good, usable sales data for appraisers.
Farm · Commercial · Home appraisals | Missouri · Illinois · Iowa
Many times, we can only use what sales data we can find (and verify) rather than what may be a better sale due to not being able to find the sale price of a property.
Where Appraisers Find Sales Data
As appraisers, we have other options for finding sales data. A few examples are: local real estate agents, MLS services, public auctions, and buyers or sellers in private transactions who are willing to share sale information.
Finding Sales Data
Where Appraisers Look
We use what sales we can find and verify, and keep a current sales database.
Agents
Local real estate agents
MLS
MLS services
Auctions
Public auctions
Private
Buyers or sellers in private transactions
Spurgeon Sales Database
Not every sale, but more than enough to provide accurate opinions of value.
Farm · Commercial · Home appraisals | Missouri · Illinois · Iowa
We put a considerable amount of time and effort into maintaining a current sales database. While it is not possible to have all sales data, we have more than enough to provide accurate opinions of value for our customers. Contact us today for your appraisal needs.
