• Jesse Ledbetter

FNMA's CU Killed "3 Comps and a listing"

Warning: This is for the appraisal nerds. It is my firm belief that Fannie Mae's Collateral Underwriter killed the old trend of an appraisal report containing 3 closed sales and a listing. While this may suffice for various private work, when your report is being graded against every possible on and off market sale for use of the "most comparable" property, its better to have more than less.

Many have been educated under the adage that "less is more," and there is a truth in it. Why say in 1,000 words what can be said in 100. However, if that sentence is being used to secure a mortgage, and an automated system is going to judge every word used and not used to ensure that you cover every possible angle... 200 words might be required. This is the state if lender based appraisal work. Out of 100 appraisals, I'm likely to see 1 CU generated revision based on comparable selection. I also regularly use 4-5 closed sales. The only instances that I use 3 sales are in cases of cookie cutter plans or where comparables are extremely lacking.


If an appraiser can "show their work" by including an extra sale (or two) they do the following:

  1. Provide stronger evidence that the adjustments used in the report are in fact supported.

  2. Provide greater evidence to the human reader that a thorough report has been performed.

  3. Are more likely to cover that #1-3 ranked comparable that the CU thinks you should use.

While "3 Comps and a listing" may have worked pre-2008, technology, data gathering and AI have made it a thing of the past. Try it on your next ten reports if you get a lot of "Please comment on the following sales..." comments, adding one sale might just save you time.

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