How far back to appraisers look for comps?

Arriving at a Credible Appraisal When Comps Are Few


Say you’ve been assigned to appraise a property in a remote area or a neighborhood where few sales have occurred lately. If comparable sales are sparse, you may need to expand your search to find relevant comps. How far back do appraisers look for comps? How far out geographically? What other tips and tricks do appraisers use to arrive at a credible appraisal, even when comps are few?

In this article, we’re sharing some best practices as well as insights from appraisers who answered our survey question, “What do you do when appraisal comps are few?”

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Expanding the search for comparable sales

In cases where comps are few and far between, many appraisers recommend using some combination of the “Three D’s” to broaden your search for comparable property sales:

  1. Dated – Search for older sales within the subject neighborhood.
  2. Distant – Search for similar sales farther away in competing neighborhoods.
  3. Dissimilar – Search for dissimilar sales within the subject neighborhood by widening the parameters for improvements (GLA, age, features, etc.).

It’s important to note that any comp that is distant, dated, dissimilar, or a combination thereof must be explained, and the adjustments must be supported in your appraisal report.

While the “Three D’s” may be a good rule of thumb when comps are sparse, individual appraisers have different approaches. For example, appraisers have different preferences regarding which “D’s” to use and in what order (see survey comments below).

No matter how you decide to expand your search parameters, you must use your knowledge of the market area and apply good judgement to select comparable sales that best represent the subject property.

Additionally, it’s essential to verify your information by cross-checking MLS data with public records and parties involved in the transaction to ensure you arrive at a credible appraisal.

How far back do appraisers look for comps?

Ideally, appraisers will use comparable sales that have occurred within 3 to 6 months preceding the effective date of the appraisal. However, it is often appropriate to go farther back in time to look for comps. According to Fannie Mae,1 appraisers should use comps that have sold within the past 12 months. Older comparable sales can also be used if the appraiser explains why they were selected.

When comps are few, one survey respondent told us, “It has been my experience that we simply have to go back farther than 3 months, 12 months, to maybe even the past 24 months. We know the lenders will typically accept comparables older than 12 months if we explain why we are using an older sale.”

How far out do appraisers go for comps?

Ideally, appraisers will use comparable sales located within 1 mile of the subject property. However, you may have to go farther out geographically to find appropriate comp sales, especially if you work in a rural area. You can use comps that are located a considerable distance from the subject property—as long as you adequately explain and support the rationale for using the comparable sales selected.

One appraiser told us, “I normally pin the property, [then] go out a quarter mile at a time to find relevant comps.” Others said they expand their search to competing neighborhoods and/or towns when comps are limited.

Appraisers share their individual approaches

As previously mentioned, we surveyed our appraisal community to find out, “What do you do when appraisal comps are few?”  The following comments show how individual appraisers often put their own spin on the “Three D’s” when expanding the search for comparable sales:

“Time and distance. My preference is to go back farther in time within the same neighborhood and/or market area and make market condition adjustments. If that still doesn’t provide enough comps, I expand the market area, looking for more recent sales with similar characteristics to the subject property.”

“First consider a broader time frame. Market conditions adjustments are very supportable.”

“Expand search to other competitive neighborhoods. Next, go back in time.”

“Expand my search a step by step. First go as far in 1.5 to 2 miles in radius for comps. Second go back 180 days from time of inspection instead of 90 days. Then expand the GLA to 25%. You will find some comps.”

“Make adjustments to add or remove features, i.e., bedrooms, baths, screen porch, land.”

“When comps are few, I rethink my search criteria first. For example, an area search would be the subdivision if applicable, search 1 mile, or search school district. Second, I rethink criteria like pool, lot size, unique attributes, basement, increase year built range. Last, I rethink things like older sales, adding pending sales in addition to the three closed sales, and going farther out.”

“I will either use older sales and adjust for market conditions (increased/decreased values) OR expand the distance criteria and adjust for location (inferior/superior).”

“I live in a rural market. Comps are always few, but recently they are almost non-existent. I really prefer to stay in the same market area, and in doing so I am going back in time a lot and then determining an accurate time adjustment. I track the market every month and have good data to support the adjustments.”

“What my supervisors have taught me to do when comps are sparse (which often happens in the semi-rural area we live in) is to EXPAND THE PARAMETERS. This may mean the geographical bounds or the lot size or the improvement square footage. Secondly, find the main buyers’ motivation for the subject (i.e., there’s an ADU or a wooded view or perhaps it’s a low list price) and go into nearby competing marketplaces and find comps with that similar primary feature that would attract a similar buyer. Locational adjustments can be employed if matched pairs analysis show that’s warranted.”

Other tips and tricks for when appraisal comps are few

Besides expanding the search parameters, some survey respondents shared other ideas for how to find comparable sales and arrive at a credible appraisal.

Additional tips and tricks recommended by appraisers include:

  • Talk to local real estate agents
  • Check tax records
  • Talk to your supervisors or peers
  • Look for non-realtor sales (e.g., FSBOs)
  • Leverage technology
  • Utilize the cost approach
  • Utilize the income approach (if it’s an income-producing property)

“Tap into local knowledge. Engage with local residents and real estate professionals for insights into recent sales and property trends.”

“Check tax records to see if there are sales that haven’t been listed. Talk to local agents.”

“Ask my supervisor or other peers for guidance.”

“Look through Craigslist and local papers and websites for FSBOs, and sometimes drive an area to look for new signs on properties that have not hit the MLS, or are being held as office exclusives. Also use courthouse recorder’s office to hunt for new trust deeds and transfers.”

“Leverage technology tools specializing in rural real estate data analysis for broader data access.”

“Use the cost approach method and any other data to support the appraised value.”

“In some cases, the cost approach can be used, especially if the home is newer, where determining accrued depreciation can be more reliable than if applying to an older home.”

“When facing a scarcity of appraisal comps in Kentucky’s rural market, several strategies can be employed to navigate this challenge effectively. Firstly, expanding the search radius to nearby towns or areas can uncover additional comparable properties. Secondly, adjusting for differences between available comps and the subject property is crucial for accuracy. Moreover, considering alternative data sources like tax assessments or local insights can provide valuable information. Additionally, factoring in land value separately is essential, as it often plays a significant role in rural properties. In cases where traditional approaches fall short, utilizing the cost approach method can estimate the cost to rebuild the property.”

“Cast a big net. First, I will expand search parameters and see if any comparable sales with features slightly outside the initial search parameters were being filtered out. Then, I like to look back at older sales within the subject market area to see if anything comparable has sold within the previous few years. At that point, if comparable sales are extremely limited, it is time to pivot to the cost and income approaches to value.”

​“Get creative! First, I may go back in time, resulting in a change/adjustment in market conditions. Next, if the subject property is complex, an appraiser may identify attributes that may appeal to a specific buyer and ‘cast the net wide’ in that marketing area. It is all about bracketing and supporting adjustments through the demonstration in the marketplace. I love those tricky properties that really cause me to think outside of the proverbial box! Have fun with it!”

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  1. Fannie Mae Selling Guide (