FHA Appraisal Report & Prior Sales

by Dave Towne · Published November 10, 2015 · Updated December 16, 2018

FHA appraisers,

When the new 4000.1 Handbook and associated Data Delivery Guide were released not long ago, astute readers noticed that FHA showed that they wanted the Comparable’s prior transactions to be reported back in time THREE YEARS, not just 1 year as per the form.

Well, guess what? That apparently was an error, because the REVISED Data Delivery Guide, Effective Nov. 5, 2015, has that corrected back to ONE YEAR, which ‘sort of’ corresponds with the info on the GSE forms.

Eagle eye readers will note there may still be an error with this! The form says

…the year prior to the date of sale…”

But FHA, in the Data Delivery Guide below says

…one year from the effective date of the appraisal…”

Those dates are NOT THE SAME.

As so often happens in the wild and wacky world, people who either write or re-write ‘new’ policies and procedures based on source documents, often don’t correctly read or comprehend what those source docs say. That just muddies the water further, as this situation attests.

I recommend that your FHA reports have a statement that comp research is included for one year back from the report Effective Date.

This is what it says on the 11/05/2015 Data Delivery Guide, page 42:

FHA Single Family Housing Appraisal Report and Data Delivery Guide B. Uniform Residential Appraisal Report Form for One Family Residential Properties

Field

Protocol

Analysis of prior sale or transfer history of subject and comparable properties

Report the date(s) of prior sale(s) or transfer(s) of the subject that occurred within three years of the effective date of the appraisal.

Report the date(s) of prior sale(s) or transfer(s) of each comparable that occurred within one year of the effective date of the appraisal.

Report prior transfers regardless of conveyance type or consideration amount. If the prior transfer or offering is not relevant to the current transaction or offering, explain why.

For new construction, include any prior transfers of the land as vacant.

If the properties are located in a “non-disclosure state,” the appraiser is responsible for reporting the information that is reasonably obtainable.

Report the analysis of prior sale or transfer history of the subject and comparable properties.

The appraiser must evaluate the relevancy of prior transfers to the current sale or offering of the comparable.

The appraiser must describe the difference between recent transfers versus the current sale or offering, and the effect on the appraisal problem.

The appraiser must provide an analysis of the prior sale or transfer history of the subject property and comparable properties in the report. Simply reporting a transaction is not a sufficient analysis or explanation to the reader.

FHA recognizes the limitations of form reports and the UAD format. If multiple prior transactions exist for the subject property within three years prior to the effective date of the appraisal, or one year for comparables, the appraiser must analyze and report those prior transactions.

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Dave Towne

Certified Residential RE Appraiser at Towne Appraisals

AGA, MNAA, Accredited Green Appraiser - Licensed in WA State since 2003.
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Koma says:
November 10, 2015 at 3:26 pm
Ooops some egghead made an error, no big deal. Wish that were the same for us appraisers. We would get the hammer dropped down on us, sit in front of the board, maybe pay a fine, definitely have to take a bunch of classes, so on and so on. Not that I’ll do an FHA ever again. Keep smiling till retirement!

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BG says:
November 10, 2015 at 7:31 pm
I don’t consider myself “astute” but I caught it. I guess this means I can stop looking for a hammer to beat the crap outta whoever added that extra layer of bullsh*t to an already tedious job! ????

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Mike Ford, AGA says:
November 12, 2015 at 10:35 pm
Yet another example of why most government instructions are as clear as Mississippi River mud after a rain storm.

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Koma says:
December 11, 2015 at 4:03 pm
It was so funny when the other day I was reviewing some HUD Quick Tips and came across this tidbit;

Appraisers are reminded not to recommend inspections only as a means of limiting liability. The reason or indication of a particular problem must be given when requiring an inspection of any mechanical system, structural system, etc.

Oh of course not that’s why we have those expensive E&O policies. Plus who else are they going to go after besides the appraiser. Oh yea, do you think that roof has less than 2 yrs….

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