Does the Code prohibit the use of foreclosures as comparable sales?
No. The Code does not address the use of foreclosures as comparable sales nor does Freddie Mac require appraisers to use Real Estate Owned (REO), foreclosures, or short sales as comparables sales. However, if the appraiser determines that REOs, foreclosures, or short sales are representative of the properties available to typical purchasers for the market in which the property is located, appraisers must consider their use. For more guidance on appraisal requirements, please review Chapter 44 of our Single-Family Seller/Servicer Guide and Single-Family Seller/Servicer Guide (Guide) Bulletin 2009-18 issued on July 10, 2009.
Related Questions
- Does the Code prohibit the appraiser from talking with the Realtor involved in the subject transaction? Can the Realtor provide comparable data and/or explain their pricing strategy to the appraiser?
- Does the Code prohibit the use of foreclosures as comparable sales?
- Does AIR prohibit the use of foreclosures as comparable sales?
