Comparable Selection in Appraisals 2026: What Drives the Number and When to Flag Issues

Appraisers are required to select the most recent, most proximate, and most similar sales available in the market. When that does not happen, the appraised value suffers. MLOs who pull their own comps before the appraisal is ordered are positioned to identify inferior comparable selection immediately rather than scrambling after the report is returned.

GSE Preferences for Comparable Selection

• ✦Closed sales within the past 12 months; six months or fewer preferred for the primary comps
• ✦Within one mile in suburban and urban markets; rural markets allow wider geographic search when supported
• ✦Similar gross living area (GLA); differences larger than 20% require significant adjustments
• ✦Similar age, style, and condition rating as the subject property
• ✦Active listings and pending sales can be used as supporting comps but closed sales are primary

Red Flags That Warrant an ROV

Distressed sales (REO, short sales, estate sales) used as primary comps when arm's length sales were available in the same market. Comps with a significantly inferior condition rating compared to the subject (for example, using a C4 or C5 sale as the primary comp for a C2 subject). Bypassing a directly comparable sale that closed at a higher price in favor of older, more distant comps without explanation.

MLO Workflow Before the Appraisal

Before the appraisal is ordered, pull five to seven closed sales from the MLS that represent the strongest support for the contract price. Note the address, closing date, GLA, lot size, and sale price. When the appraisal comes back, compare the appraiser's comp grid to your list. If the appraiser used materially inferior comps while ignoring stronger ones you identified, that is the basis for an ROV.

Market Condition Adjustments

In rising markets, the appraiser should apply positive time adjustments to older comparable sales to reflect appreciation between the comp's closing date and the effective date of the appraisal. If the appraiser uses comps from six to twelve months ago in an appreciating market without time adjustments, the value opinion will be understated. This is a legitimate ROV point if supported by market data.