Understanding USPAP: Three Year Sales History

Three quarters of the way through the year, some appraisers are still unsure about how to deal with the change in reporting requirements that took effect January 1, 2003 (USPAP 2003). Some appraisers are going back three years on the subject and on the comparables; some on the subject only. What’s required? What’s prudent?

In effort to help put the breaks on “flipping,” USPAP rules now require appraisers to analyze all prior sales on the subject property going back three years. While most appraisers go back at least one year for the comps, technically, it is not spelled out anywhere in USPAP. Many appraisers make it a practice to go back at least three years on the comps, where possible, for several reasons; the supplemental standards of Fannie, Freddie, HUD and others do have requirements regarding the reporting of comps (and to violate these standards is to violate USPAP), and seasoned appraisers understand that incomplete reporting can come back to bite you later.

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