How many comparable sales does an appraiser use?

Usually three to six closed sales, sometimes more on unusual properties. The count matters far less than whether the sales genuinely compete with the subject.

How recent do comparable sales have to be?

Preferably within the last three to six months. Older sales can be used with a market-conditions adjustment, and in thin markets they have to be.

Can an appraiser use listings instead of sales?

Active listings show what sellers are asking, not what buyers paid. They can support a trend or bracket a value, but closed sales carry the weight.

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How appraisers choose comparable sales

Almost every argument about an appraisal is really an argument about comparable selection. Get this right and the rest is arithmetic; get it wrong and no amount of careful adjustment rescues the number.

What makes a sale comparable

It competed with the subject. The real test is whether a buyer shopping for the subject property would have seriously considered this one. Not whether it is nearby, not whether it is a similar size — whether it was an alternative.

That is why a 3,200-square-foot house on the water and a 3,200-square-foot house four streets inland are not comparable in any useful sense, while a smaller waterfront house on the same canal often is.

It closed, and recently. Closed sales are evidence; asking prices are opinions. Within three to six months is preferable. Beyond that a market-conditions adjustment is required, and the further back you go the more that adjustment is doing.

It was arm's-length. A sale between family members, a foreclosure, an estate sale under time pressure or a transfer between related entities may not reflect market value. These get excluded or explicitly adjusted, and the report should say which.

It is verifiable. Sale price, date, terms, condition at sale, and whether any concessions were involved.

The adjustment grid

Once comparables are selected, each one is adjusted toward the subject. If a comparable is superior in some respect, its price is adjusted down; if inferior, up.

Adjustments come from the market, not from a rate card. What a market pays for a second bathroom in Wellington is not what it pays in Fort Lauderdale, and an appraiser who applies a fixed dollar figure everywhere is guessing.

Typical adjustment categories: gross living area, site size, condition and effective age, room count, garage, pool, view, waterfront and dockage, age, quality of construction, and market conditions between the sale date and the effective date.

Bracketing

Good practice is to bracket the subject: some comparables superior, some inferior, so the subject's value is enclosed rather than extrapolated. Four comparables all inferior to the subject tell you only that the subject is worth more than all of them, which is a weak conclusion.

Where it goes wrong in South Florida

Five recurring failures, all of which we see in other people's reports during review work:

Postal city treated as market. Large parts of Palm Beach County have mailing addresses that do not match the community. The Acreage is the extreme case — one unincorporated community whose mail is addressed to Loxahatchee, Royal Palm Beach and West Palm Beach. An appraiser grouping by mailing address compares acre-plus parcels to tract housing inside a town's limits.

Crossing a boundary that matters. Royal Palm Beach, Wellington and the unincorporated land west of both are three markets people treat as one. So are the barrier islands and the mainland opposite them.

Waterfront as a yes/no field. What a slip holds, the depth at low tide, and whether a boat can reach the inlet without meeting a fixed bridge produce very large differences between properties that look equivalent.

Ignoring the community's own phases. In a large gated community, the phase and product type often matter more than the gate. Ibis in West Palm Beach is dozens of separate villages with different ages, associations and price bands.

Condominium comparables from the wrong building. Since Florida's 2022 reforms, milestone inspection status and reserve funding vary sharply between buildings and move contract prices. Two units of the same size in neighbouring towers can be a long way apart for that reason alone.

What you can do about it

If you think an appraisal used the wrong comparables, the productive move is to supply better ones — closed, recent, genuinely competitive — through a reconsideration of value. Arguing the conclusion without offering different evidence does not work, and should not.

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Matt Thoren, State-Certified Residential Appraiser. 391 field reviews of other appraisers' reports. 561-853-2129 · Residential only.