Do Comps need to be within a Mile?

the-coyle-group-one-mile-philadelphia-appraiserThis post is basically a follow-up to my last post, The 6 Month Rule.  If you recall, I discussed how far back in time appraisers can go when selecting comparables.  In this post I’d like to address a similar misconception brought up in a comment by Portland, OR appraiser, Gary Kristensen.  He suggested that we answer another question that appraisers hear a lot…

Can you only use comparable sales that are within one mile away?

Well, as most appraisal answers begin…that depends.  It depends on the location of the property.  Are we talking urban, suburban or rural?  It depends on the type of property.  Is it a 3 bedroom Twin in Roxboro or a custom-built Mansion in Bryn Mawr?

In urban settings, like Philadelphia, were homes are often very similar and the housing stock is dense and sales are plentiful, it can be easy to find comparables.  In situations like this an appraiser may only need to search a few blocks away to find appropriate comps.  Going a mile for comparables in a place like Philly will likely put you in a completely different neighborhood, zip code and market.  Unless the property is extremely unusual chances are the appraiser will be well within a mile when selecting comps.the-coyle-group-maple-glen-house-philadelphia-appraiser

Suburban settings tend to be less built up with fewer sales.  In cases like this an appraiser may have to go more than a mile for comparables.  Even if they are more than a mile from the subject they may still be located in the same municipality, school district and general market place.  For instance, if I appraised a house in Maple Glen and went over a mile away I could still be in Upper Dublin Township & School District and the 19002 zip code…the same general market.

Appraisers have even more latitude in Rural settings.  While most of my experience has been appraising in the greater Philadelphia region in an urban/suburban market, I know appraisers who do work in Rural markets.  For them it’s not uncommon to go 10 or more miles away or into different counties (and states) in order to identify appropriate comparables.  Think about it, the market for a 500-acre horse farm could easily span across miles, counties and state borders.

The Coyle Group - Exeter - Philadelphia AppraiserNow suppose you have that custom-built Mansion that I mentioned earlier.  There may not be many sales in the immediate area that would be considered comparable.  An appraiser may have to go 4-5 (or more) miles away to find a suitable comparable.  In cases like this it may even be appropriate to go outside Lower Merion Township (Montgomery County) into neighboring Radnor Township (Delaware County) to find comps.

If the appraiser stays within an area that would be considered to be the same real estate market place*, the comparables are likely going to be appropriate.  It’s also very important for the appraiser to explain their rationale for expanding the search for comparables. This is necessary to help the end user of the appraisal understand the appraiser’s reasoning and methodology.

Bottom-line, there is no rule or law that compels an appraiser to select comparable no more than a mile from the subject.  This is a guideline established by underwriters/lenders and has nothing to do with good appraisal practice.

* A real estate market place is where forces of supply and demand operate, and where buyers and sellers interact to trade real estate for money.  Market places have mechanisms or means for (1) determining price of the traded item, (2) communicating the price information, (3) facilitating deals and transactions, and (4) effecting distribution. The market for a particular property is made up of buyers who need a home and have the ability and willingness to pay for it.

The Coyle Group’s team of Philadelphia Real Estate Appraisers are a leading provider of appraisals for Estate/Probate, Divorce, Bankruptcy, Tax Appeal and Pre-Listing. If you need a guest speaker at your next sales meeting, please give us a call. We would welcome to opportunity to speak to your group and field any appraisal related questions you may have. For more information please visit our website at You can also contact The Coyle Group at 215-836-5500 or