VA Clarification on Comparable Sale Properties
On May 19, 2017, the Department of Veterans Affairs (VA) published Circular 26-17-14 clarifying that there is no maximum standard for the distance between the subject property and related comparable sale properties. Rather, the appraiser should specify why in a certain market, rural or suburban, whether extended distances are normal for that market and how they appraiser determined how and which comparable sale properties were used.
The VA issued this clarification after noting that the current policy in the VA Lender’s Handbook chapter 11, section 7, subsection e, states: “Comparable sales should be located as close to the subject as practical," was causing confusion in terms of acceptable comparable sale properties in rural and suburban markets. If there is a sale property closer to the subject property that was not used, the VA urges appraisers to include a discussion why the closer property was not used in the appraisal report.