When To Pull Comps; That Is The Question

Here’s a question I get asked pretty often, both online and in person at my real estate appraisal workshops: ‘Should I pull my comps before or after the appraisal inspection?’ Well, the answer is… it depends. What it depends on, primarily, is whether or not you have the right setup and system in place.

By ‘setup’, I mean the setup in your office. How is your office managed? What kinds of resources do you have available? Most importantly in this case, do you have someone at your office who can pull up the information you need quickly and successfully?

System’ refers to the availability of information you need. That includes both information you need before the inspection, and information you need when you’re there.

When you’re looking for information before the inspection, you always need to ask yourself how reliable it is. Can you find your subject online that was recently listed or sold? Does the subject have good interior photos, taken in the past two or three years? Can you actually get reliable information from these photos, and not be forced to rely on the description? They say a picture is worth a thousand words; when it comes to subject evaluation, that’s an understatement.

Another way of gaining information before the inspection is to interview the contact for the property; often the owner. Bycomp photos asking a few simple questions before you go out there, you can often glean some useful tidbits.

Now let’s talk about what happens when you’re at the inspection. You can do all the research you please beforehand, but you never know what hurdles you might encounter when you’re at the property. This is when having the right setup and system in place becomes vitally important.

Let’s say something does go wrong. Let’s say the house was listed at 1000 sq ft, then you drove out there for the inspection and found that the owner had built a 500 sq ft addition in the last year. Suddenly, your comps are out of the window. In a scenario like that, do you have the ability to hop onto your phone, tablet or laptop and pull up new comps while you’re still in the neighborhood? Do have someone well-trained and skillful enough back at the office who you can call up to help you on the fly? Having a backup plan – having the right system and setup in place – is absolutely essential if you want to do your comps before the inspection.

Personally, I’m a big fan of pulling comps before an inspection. For someone in my situation, with the ground I need to cover (sometimes 150 miles each way), it’s a massive help. In general I find it to be a big time-saver, and saving time is one of the best ways to make your real estate appraisal business more efficient and more effective.

I do want to add one big, flashing note of warning here, however. If pulling comps before your inspections starts to affect the quality of your real estate appraisal work at all – even a little bit – then don’t do it. It’s not worth risking your integrity, your liability, or your license.

For more information on this subject, please download and listen to The Appraiser Coach Podcast Episode 039 – Pulling Comps Before or After the Appraisal Inspection. 

26 Comments on “When To Pull Comps; That Is The Question”

  1. The meat of the appraisal sandwich is the selection of like substitute comparables so that market data can be pulled to in turn establish adjustments and value. Although I’m sure you’ve checked with the experts Dustin and its okay to have non-licensed office staff pull comps, morally that is a line I will never cross. If your staff is accepting assignments on your behalf, establishing neighborhood boundaries, and picking a group of comps for you to consider so in turn you can be the ham or turkey (determine adjustments), then I believe your a success financially, but a failure morally.

    Seek the truth.

  2. Nice to know that I’ve been blocked Dustin as I find it unlikely that I’m the only commentator on the past two blogs. Your like the lender/AMC where they secretly blacklist you, but officially you haven’t been removed. Go to HousingWire where there have been real open comments for any and all. Your past guest Mark, is making real progress as he is having private communications with the editor. Prove me wrong.
    Seek the truth.

  3. Bill:

    Let me get this strait, your comments are ON the blog discussion, but you are claiming to be blocked? Please explain that? If you were blocked, you would not be able to post (not the other way around). For your information, I have never blocked anyone from the podcast or blog discussion group. Ever.

    1. Dustin, I know how much you like technology, but there are times when comments are input where they are not immediately viewable for some unknown reason. If my comments were delayed, and simply temporally not visible, then my leap was to assume the puppet master had pulled the string on the truth. If its the truth you seek, and want to continue the open forum, then I’m sorry if my leap proved to be false. For the record, some months back other masters have engaged me with in-depth conversation (Joan Trice / Appraisal Buzz), only to later erase the back and forth along with most prior comments (months/year +) relating to past articles.

      Seek the truth.

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  5. I love this theory. When I’ve been able to pull it off, I get the feeling that I’ve tucked into the slipstream of the valuation universe and cheated the gods. When I miss something like a basement that wasn’t finished to the standard portrayed in the listing or a lack of central heat and air or a massive difference in GLA that the agent perpetuated due to a courthouse SNAFU, I end up feeling like a fool. And, I can’t stop mourning the loss of all that time. Yes, I pull all of my own comps. I truly wish I could make this practice work. Instead, I concentrate on the logistics of getting as many comparable photos as possible, after the inspections, for as many similarly located sales/listings.

  6. I think there needs to be a lot more discussion on this topic as this, I believe, is one of the reasons why Fannie/Freddie started waiving appraisals on loans. I think pulling comps with half to little or no information on the subject is reckless behavior and should only be done after you have done a complete inspection of the property. Why would you trust that you have the right comps before you even know anything about the subject? How could you possibly bracket all your adjustment? Pulling comps before an inspection is what leads to bad, bad appraisal reports. Of course doing it the other way promotes using MLS photos for pictures. No one even addresses the fact that the guideline for us to take actual on site comp pictures was written into the form long before digital photos even existed, long before email, GIS, Google earth. It is absurd that lenders force the onsite comp photo in this day and age, do you really think an appraiser gains any enlightening information about a comp while taking 2 seconds to drive by a comp. Oh thats right, we get 4 year degrees now but are reduced to slouching down in our cars trying to hide and take pictures. Oh, Mr appraiser, you will just send your assistant to take the pictures later, No, No , No, it says you as the appraiser have to do it physically. Do you know how much more infromation I can get on a comparable sale sitting at my desk nowadays? They couldn’t have even dreamed of our current availability to this data when these guidelines were written prior to 1993. The forms should be a living document, this whole argument is a direct contradiction to actually being helpful to streamlining the appraisal process. Fannie/Freddie is upholding these outdated guidelines in order to slow us down so they can replace us with an A.I. in the future. If they really wanted us to streamline appraisals more, then these topics would be on the forefront of appraisal discussions. We all work under rules and guidelines that were written before the age of technology and it is hurting the business. It is making relics out of all of us while the GSE’s will replace us with said technologies.

  7. The first thing I do is see if the property was ever in the MLS. Obviously, the more recent the better. You have an idea of size, room count, etc. You are required by almost every lender to take photos of your comps. Unless you are 5 mins from the property, you are going to waste time driving back to the subject neighborhood to take photos. Can you afford to do this when it takes 45 minutes to an hour just to get there? Not saying this never happens, but if I have to take 10-15 pics while out there, so be it, it will save 2 hours in the long run.

  8. In looking at USPAP the Scope of Work states “The appraiser at a minimum: (2) inspect the neighborhood. (3) inspect each of the comparable sales from at least the street. (4) research, verify, and analyze the data from reliable public and/or private sources…” No where does it say you cannot use MLS photos, that is a lender requirement. Personally I believe since I have to inspect the comp. from the street I’m already there so I might as well take the photo anyway. However, I do agree that with the technology we have today it is absurd that lenders still require us to take our own pictures when we can verify the comps from several different sources to see if the realtor included the picture of the correct property in the MLS.

  9. I Know I am very lucky to be an appraiser in the 4th largest city in the USA. The need to pull comps before or after is matter of your office setup and the needs of the assignment. Generally I do pull my comps before because there is a wealth of information about properties and at the time of setting the appointment. My office has a standard set of a few questions asking the Point of Contact (POC) especially if it is a refinance assignment.
    I do some rural properties and Large Custom homes (7500+ sqft), and for those I incorporate in my fee an additional trip to return after inspection and additional time to deliver. So I concur that it depends on the assignment and what you are comfortable with in your business practice.

    Though I do want to note, that besides driving around Houston TX, photographing the Comparable Sales is the most dangerous part of the assignment. I have had guns pulled on me, knives, people standing in front and behind my truck, been followed, been detained by the police, and even one time taking to the police station. For a period of time I had a magnetic sign that I placed on my truck stating I am an appraiser, though it attracted more attention and confrontations.

  10. I typically try and research at least 5-7 sales and/or listings prior to the property inspection. With MLS, Tax Records, and usually information from another appraiser that has inspected the house within the last 10 years(local 38 appraiser database on all sales that they inspected over the last 10 years that is updated on a daily or weekly basis; 10 other area appraisers do not participate for one or more reasons). I have a good grasp of most properties prior to completing the inspection on the subject. If something does pop up, I can use my tablet in the field AND/OR have my trainee and/or my admin back at the office ALSO search to make sure I have not missed anything. It is easier to search on the desktop in the office than on my tablet. Very seldom is the case where I do not do the research prior to the inspection. As for Bill Johnson’s comments, I always dictate the search parameters to my admin or trainee if I ask them to pull additional sales and then *I* decide which are comparable and will be used in the report. I would imagine that this is similar to what Dustin does but I’ll let him speak for himself.

  11. I’m headed out the door in an hour to do an appraisal that is not only fully comped out, but the report is almost completely written up, as well. Yes, there is some risk that the subject will be different than inspected and I’ll have to re-do everything, but that is a very rare exception. I’m a big fan of doing the work in advance of the inspection. An appraiser’s time is better spent doing analysis than driving.

  12. Ed seems to be on the right track. First off, I’m a one man shop working in a rural market so I do everything (to me, free time is more valuable than money). I research the subject via multiple sources – public records, MLS, Yahoo, 4SBO sites, my file and photo database (hopefully I can still remember appraising this property several years ago!) and finally the AMC/client (they just might be able to share something useful and several of my clients will and do). Then I’ll spend enough time on the phone while setting up the appointment asking the homeowner to verify what’s there. When I search MLSs & public records for sale AND listing comparables it’s typically a wide range. Say the subject appears to be in the $150k range my search can be $100-250k which should cover for any surprises once the property is viewed. Once the property is viewed certain comps can be eliminated and then as time permits I will take a majority of these additional comparables while in the area. I should now have the subject covered and additional photos of sales and listings for future assignments. I always take photos of 4SBOs along the way because in my rural area a manual search of public records is almost always required because ~25-30% of all sales are not associated with an MLS. Technology is very helpful nowadays but I’m in the habit of spending enough time as neccessay to create a professional report even if the AMC/client states an unrealistic due date (that’s kinda, sorta their problem because I will not sign and transmit a report until satisfied it’s professional). If they want it faster and cheaper there’s plenty of unprofessional appraisers out there, but that’s another topic eh Dustin?

  13. Pulling comps before hand is a great time saver in certain situations – the subject is rural , and comps are all over the map in a rural area – sometimes I take comp pictures before I even see the subject because of the route taken- Also, in rural areas you cannot get internet service to pull comps. I like the note by Harry talking about being harassed by taking comp pictures- I had 1 lady almost wreck me on a rural road because I took a picture of her house, been pulled over by many a police officer and so forth.

  14. You should never be pressured to pre-comp a subject you haven’t even seen. This opens way too many doors down the wrong path. Truth

  15. I like to pull comparable sales in advance because often it does save time, but I recognize the potential for double work later on some properties and the potential to bias yourself into wanting to keep the comparable sales already pulled on other properties. In appraisal, we have a balancing act between a quality product and making money. I struggle with that balance and often find myself doing more work than necessary for credible results.

  16. Dustin,
    Thanks for taking all the hits for us. Some, like me do appreciate the time and energy you provide us. We need leaders in this industry, not critics that bring us down.
    Please have a discussion on how appraiser can form a UNION. Similar to electrical or plumbers. I realize that many of appraiser are such to be lone wolfs in a cave, though were just one vs Big Banks and now via AMC’s . Can you use this a a podcast topic. I do understand collusion, but is that not what a union is.

  17. Effectively pulling comps prior to the inspection is a function of experience in your service area. If you are a trainee, you will hopefully be under the supervision of an experienced certified appraiser, who will know, in a general way, what are likely appropriate comps. In the Austin, Texas area, this is usually a reasonable proposition, as we have a very good MLS system that allows a Realtor to provide extensive commentary about a listing/sale, and to load many photos of the property. There aren’t very many areas of the metro-Austin that I don’t know extremely well, consequently, I generally know what will be an appropriate comp. On occasion, we all get to a house that isn’t what we anticipated. If my inspection reveals a larger or smaller house, or a house that has been extensively remodeled and deserves comps that differ from what were already pulled, our local MLS is easily accessible from a mobile device. If you are a newly certified appraiser out on your own, you will naturally have a more limited ability to effectively pre-pull comps. Given todays technology, there is nothing immoral about pre-pulling comps, if you have the experience to do it. Also, for unusual high end, or rural type properties, there will be a limited number of available potential comps, and I may take photos of literally all of them, which could be 5-15 houses. In those cases, your higher fee covers the additional time you’ll need to do this.

  18. It really comes down to your market. I’m in South Los Angeles. Nothing rural, pretty homogeneous area. I can comp every property before heading out. I verify GLA, bed/bath count while scheduling. I also ask about any improvement, additions or garage conversions at that time. Depending on their answers, I ask follow up questions. I rarely have to change my comps. But if I do, I have the MLS app on my iPad and choose them from my car. Comping before heading out works great for my area.

  19. if you are an honest, ethical appraiser it doesn’t matter when you pull comps or who initially pulls them for you. Before you send that report, you will have gone back through all the comps you used & the pool of potential comps.

    1. So you’re saying you are going to let someone else pull your comps, and then you are going to go back and concur with their assessment that they have pulled the appropriate comparable sales. I hope to God they are a licensed appraiser, and you have included them as a contributor to your report.

  20. Is the appraiser taking the photo in the picture in England as the steering wheel is on the right side.

  21. The GSE forms say we must present the comparable sales that are locationally, functionally and physically the most similar to the subject, while USPAP says the report must provide market evidence for the opinion of value. I think the GSE requirement is a bit more difficult to meet between the two. The kicker is the ability to accurately identify the subject, which of course is questionable in every assignment, no matter how good the online or homeowner interview data is. USPAP says we must identify the subject before we being to consider what it might be worth. I think mobile appraisers certainly have the one-up in this regard. I am not fully mobile/digital, but I do bring my laptop to some assignments when I don’t want to drive back out. I don’t have a problem with appraisers who can train someone to pull comps – though I think that is not the opinion of all appraisers. I like the last comment from the coach that says if the practice of pulling comps prior to inspection is affecting the quality of the report, it shouldn’t be done.

    On a related but different subject, I find the requirement to take comp photos one of the least “valuable”. I am not saying it doesn’t provide some benefit, just that it doesn’t provide much bang for the buck. Not all appraisers agree about that and I do recognize there are some markets where driving the comp is prudent and necessary. In a world where the goal is to produce a better, cheaper and faster report, this is an area where I think advancements could be made. If the requirement were to be lifted, I think one of the big question marks would be what would happen in those cases when driving out the comp was necessary?

    I also like the post where they talked about certain requirements of today being implemented in an age that was much different from today. I don’t agree with the conspiracy theory angle, but I do find it an interesting observation that we are required to work in an outdated environment and then being replaced by more recent technology – we certainly do have our hands tied in that regard.

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