12 The Sales Comparison Approach Information is gathered on subject property and comparable properties that have sold or been listed for sale recently Uniform Residential Appraisal Report (URAR) is required by Fannie Mae and Freddie Mac for appraisal of a detached single-family residence

URAR Comparable Sales Grid Sale/Financing Concessions Above-Grade Room Count Date of Sale/Time Gross Living Area Location Basement/Finished Rooms Below Grade Leasehold/Fee Simple Functional Utility Site/View Heating/Cooling Design (Style) Energy Efficient Items Quality of Construction Garage/Carport Actual Age/Condition Porch/Patio/Deck

Compliance with UAD Compliance with Uniform Appraisal Dataset (UAD) is required for mortgage loans purchased by Fannie Mae and Freddie Mac Complete UAD Field Specific Standardization Requirements are available at efanniemae.com

Form Opinion of Value by Sales Comparison Approach Most difficult step in sales comparison approach is determining the amount of each adjustment.

Factors That Should Be Similar Style of house Age Number of rooms Number of bedrooms Size of lot Size of dwelling Terms of sale Type of construction General condition

Major Categories of Adjustment Date of sale Location Physical features—age, number of rooms, layout (functional utility), square feet of living space, exterior and interior condition, presence or absence of special features Terms and conditions of sale—important if sale is not financed by a standard mortgage

Adjustment Process Types of adjustments are usually a dollar amount, but could be a percentage Adjustment values computed by matched pairs analysis (MPA), also called paired sales analysis or paired data set analysis Adjustments made in sequence, with those affecting overall property value made first Information recorded Net adjustments calculated Opinion of value determined

Application of Sales Comparison Approach Advantages Reflects the activity of the marketplace Relatively simple to understand and use Considered reliable and objective Disadvantages Lack of comparable sales possible Depends on making accurate adjustments