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Supply and Demand - Top of Page 2

At the top of page two of the URAR, the appraiser provides information about the number of comparable sales in the neighborhood over the past year and the number of comparable properties currently offered for sale.



This section of the URAR existed prior to the release of the 1004MC in 2009.  The data in this section is intended to provide a “snapshot” of supply and demand for comparable properties in the subject’s neighborhood.

When conducting the searches required to provide this data, the geographic area searched should be consistent with the neighborhood boundaries reported in the NEIGHBORHOOD section of the URAR.

An appraiser should always run the query for comparable sales and listings using independent criteria such as location, style, bedroom count, GLA, etc... Price should not be a primary search parameter. Searching by price range infers a predetermined range of value for the subject property rather than an objective analysis of data.

The appraiser should further filter the results by removing non-comparable properties before reporting the query results in ranges.  Ask, “Would I, or could I, have used this sale or listing to value the subject?”  If not, do not include it in the ranges.

Common Issues

Expanding Search Area Due to Limited Data

If there is little activity involving comparable properties within the neighborhood, some simply expand the search area to avoid reporting that there are very few (or no) comparable listings and/or sales within the subject’s neighborhood.  Please, do NOT do this.

If the number of comparable sales/listings within the neighborhood is very limited, report the actual results.  The fact that this section of the report indicates a small number of comparable sales/listings can provide additional support for the need to use comparables in the comparison approach that exceed expected parameters related to date of sale, distance, etc.

If the search parameters are expanded to avoid reporting small numbers in this section of the report, this can lead to a report with contradictory indications.


In this case, discussion with the appraiser revealed that Comparable Sale No. 1 was actually the only sale of a comparable home in the subject’s neighborhood in the past year.  Therefore, the report should have indicated that there was only one comparable sale in the neighborhood in the past twelve months.

If the data been entered correctly, then the lender would have had an expectation that the use of distant sales would be necessary, due to the lack of sales within the neighborhood. Because the data was not reported correctly, the lender questioned why it would be necessary to use sales that are so distant when the report indicates that there were twenty-four sales of comparable properties in the subject’s neighborhood.

In this example, failure to present the data in a consistent manner resulted in the need for a report revision to explain how the data was reported and address the lender’s concern.


Including Properties that are Not Comparable and/or Not in the Subject’s Neighborhood

The report should indicate data for comparable properties in the subject’s neighborhood, not all properties.

Some reports appear to indicate that the appraiser is reporting all transactions, not just those involving homes that would compete with the subject. In some cases, it appears that the data reported includes properties outside the subject’s neighborhood.



While it is possible that such a large number of sales and listings could exist within a neighborhood, it is highly improbable that properties over such a wide price range would all be comparable to the subject property. Reporting data in this manner opens the door for questioning the credibility of other data within the report.


Reporting Search Parameters Rather than Results

The prices ranges reported in this section should reflect the results of searches for data, not the parameters used to search for the data. Searching by price range infers a predetermined range of value for the subject property. Furthermore, searching by price ranges can cause an appraiser to overlook comparable properties that are outside the range that is searched.

Example of Incorrect Reporting:

In this case, the appraiser used price ranges as a parameter to search for comparable data and reported those ranges on page 2.


Example of Report Revised after Proper Search:

After coaching was provided, the appraiser modified the search and reported the results rather than the search parameters used. Note the difference in the number of comparable sales reported. Searching by price range had led to the omission of two sales that were comparable to the subject, but had sale prices slightly below the price range that was searched initially.

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