How Many Comparables Do You Need For An Appraisal?

How does an appraiser decide how many comparables are needed for an appraisal? To know that, you need to understand what an appraisal does. 

An appraisal expresses an opinion of value. Litigants rely upon expert testimony of real estate appraisers in marital property division cases, condemnation cases, and distribution of decedents’ estates.

More commonly, the results of appraisals shape the decisions of parties in real estate transactions. Sellers and buyers use them for pricing and negotiating. A lender wants assurance of enough value to back a buyer’s mortgage. So that appraisals can do their jobs, appraisers compare the sales prices of other properties to appraise the subject.

People often wonder how many comparables they need for an appraisal and how appraisers select them. Below we dig more into how many comparables are needed for an appraisal.

So How Many Comparables for an Appraisal on a Mortgage is Needed?

FannieMae, or the Federal National Mortgage Association, purchases loans originated by lenders to aid homebuyers. Lenders participating in Fannie Mae’s program must meet certain standards, including those related to appraisals.

For such loans, the appraiser must use at least 3 comparables for appraisals with the sales approach. These comparables must feature closed, or completed, transactions. We look for a deed from seller to buyer or other evidence of the actual transfer.

Appraisers may select a fourth property to buttress an opinion of value. FannieMae permits the appraiser to select the property being appraised if it had a recent closing.

If the Federal Housing Administration or another government agency backs the loan, other comparable requirements may apply. For instance, FHA (in the absence of waivers), calls for appraisers to have comparables with active listings or pending (not yet completed) sales.

Are Three or Four Comparables Really Enough?

Customarily, appraisers will pick three or four comparables for their appraisal. In certain cases, you might find it worthwhile to go beyond this number. If you’re a buyer, you might want more to avoid overpayment. Appraisers might include one to two transactions still waiting for closing.

A larger sample size gives the appraiser more data to consider. Remember that appraisals are not the products of exact science. We use comparables in appraisals to have as much information to arrive at a reliable opinion of value.

Also, with many comparables, appraisers adjust for the unique characteristics of the property or even the sales transaction. For example, some sales may come with discounts or sellers agreeing to eat closing costs to make the deal happen. The idea is to have as much quality information as practicable.

What Appraisers Look for in Comparables for Appraisals for Home Sales

Answering the question of how many comparables do you need for an appraisal goes beyond a mere number. Appraisers who do not find comparables that share characteristics of the subject will not produce a reliable appraisal. These include physical and legal attributes, locations, and recent sales data.

In reality, no trio or quartet of properties will match. You’ll have some variation. As such, your appraiser aims for sufficient similarity, not carbon copies, in the process. These similarities include, but are not limited to:


Appraisers consider as comparables for appraisal houses and properties with the same or almost type of structure that include:

  • Condition
  • Age
  • Size of home and lot
  • Number of rooms
  • Gross square feet
  • Stories
  • Floor plans
  • Building exterior (Vinyl, brick, log)
  • Style (e.g. French Countryside, Two-Story, Ranch, Split-Level)

Generally, the size of the comparable square footage should range within 20 percent, up or down, of the subject of the appraisal.

Do not forget the legal, along with the physical, characteristics. These may encompass zoning regulations, restrictions in private covenants or deeds, and the nature of the interest sold. For instance, your appraiser would not use a sale in which the buyer was not guaranteed full title or obtained only lifetime rights.


FannieMae prefers, when possible, that appraisers seek properties in the same neighborhood. Sales of fellow subdivision properties make great candidates. Homes in a subdivision share the same access and proximity to parks, schools, shopping, areas, utilities, amenities, and other features that shape demand for a home. Properties in the same development face a common scheme of restrictions and often have the same lot sizes.

Competing subdivisions or neighborhoods may suffice if the appraisal report notes differences among the comparables in the competing subdivision and that of the subject. In the absence of neighborhood or subdivision comparables, distance considerations may arise.

Appraisers will get as reasonably close as possible to the subject when selecting comparables. Generally, in urban areas, comparables should sit within a mile of the subject. No set distance restriction exists for properties in rural areas or suburban areas.

Timing of Sales

As a rule of thumb, FannieMae likes appraisers to use sales no more than 12 months out. However, even as FannieMae recognizes, staying in the 12-month window does not always serve appropriate. Often, rural areas lack the volume or frequency of sales such that appraisers cannot find the minimum number of three sales without going beyond a year.

The Parties

The concept of “fair market value” relies upon the arms-length transaction. To that end, appraisers avoid supposed sales between family members – especially parents and children. With the close relationship of the seller-buyer may come the seller’s lack of emphasis on maximizing value or gain.

Where Does an Appraiser Find Comparable Sales Data?

Comparables for appraisal come from a multitude of sources. Traditionally, appraisers would consult MLS. In the real estate appraisal and realty world, MLS stands for “Multiple Listing Service.” Participating brokers and real estate agents list characteristics of the property and sales prices.

The MLS does not always yield the required number of comparables, especially in places with a smaller inventory of homes or frequency of sales. In 2020, roughly one in every 14 sales came via “For Sale By Owner” (FSBO) rather than with a realtor. The growing practice of non-realtor sales has given rise to Zillow, Trulia, and other online portals. Appraisers might even find sales prices on Facebook or other social media posts.

In many states, you can get the sales price from the deed. You can divide the stated excise or transfer tax on the deed by the tax rate.

Utah does not afford this avenue. For one, the state currently does not tax real estate transfers. If you try the tax office, bear in mind that Utah does not mandate reporting of sales prices. Chances exist that you won’t know the sales price of a home from a governmental source.

What Are The Comparables in Appraisals For a Rehabilitated Home?

If you have purchased or may purchase a foreclosed, abandoned, or other property at a quick sale, likely you see investment potential. The sales approach can also prove appropriate for appraisals for distressed properties.

As with home loans and more conventional sales, appraisers typically use three to four comparables on homes that need work. With these fixer-uppers, criteria for comparables will draw from “as is” sales. Finding the right candidates requires special focus on the level of disrepair and defects.

Finding comparables for appraisals of properties to be repaired involves examining the extent of the repairs or renovations on those properties and the subject. Bring to your appraiser copies of contracts or other documents describing the scope of work for your property. Your appraiser will search for properties with similar work performed.

Let Us Appraise For You

Our appraisers at ExcelAppraise have expertise and experience in finding the comps and preparing reliable appraisals for your real estate needs. Call us at 1-801-882-2292 or request a free quote today!

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