How to COMP like a PRO 2025: Updated Appraisal Rules!!!

About this Video

• Video Title: How to COMP like a PRO 2025: Updated Appraisal Rules!!!
• Channel: Jamil Damji
• Speakers: Jamil Damji
• Duration: 00:39:58

Introduction

This video provides updated appraisal rules for 2025 and beyond, focusing on a nine-step process for accurately comparing properties (comps) to determine After Repair Value (ARV). The speaker emphasizes using recent comps and making necessary adjustments based on various property characteristics and market conditions.

Key Takeaways

1. Six-Month Comp Rule: Use comps no older than six months (ideally within 90 days). Older comps require significant adjustments due to market fluctuations.
2. Subdivision & Property Type: Limit comps to the same subdivision (avoid crossing major roads), property type (single-story, two-story, etc.), and size (plus or minus 100-250 sq ft).
3. Market Direction: Consider market trends, economic sentiment, and external factors (e.g., natural disasters) affecting buyer interest and pricing. Analyze active listings, days on market, and pending sales.
4. Lot Size & Zoning: Evaluate lot size, zoning regulations, and redevelopment potential. Larger lots hold more value in higher price points.
5. Property Characteristic Adjustments: Adjust for features like bedrooms (+/- $10,000-$25,000 depending on price point), bathrooms (+/- $10,000), parking (+/- $5,000-$25,000; higher in hot/cold climates), and views (+/- $100,000-$1,000,000).
6. Traffic & Proximity: Reduce value for properties near traffic, commercial areas, or multi-family dwellings (adjustments vary based on price point).
7. Climate Considerations: Adjust for parking (garages/carports) based on climate; higher value in extreme hot or cold climates.
8. Basements & ADUs: Appraisers may only value basements or ADUs (Accessory Dwelling Units) at up to 50% of their square footage, unless the ADU is on a separate title.
9. Calculate ARV: After applying all adjustments, calculate the final After Repair Value.