In new construction, especially in our market area, it is common for the Builder's to only list a few of their properties in the MLS.

Non-MLS sales provided for appraiser review are common. Typically they are provided by the Builder or the Realtor. These sales cannot be verified any further than reviewing the HUD-1 Statement (Closing Statement). This HUD-1 statement does not provide critical information such as incentives included by the builder, what type of upgrades the home has such as Granite counters or hardwood flooring throughout, etc.

These builder sales were NOT exposed to the open market as MLS listings are. It is a private sale between the builder and the buyer only.

All the appraisal forms list Certification Statement 10, which states:
I verified all information in this report that was provided by parties who have a financial interest in the
sale or financing of the subject property from a disinterested third-party source.

This means that it is unacceptable appraisal practice to use comparable sales data from the Builders, Sellers, or Brokers/Realtors who are involved in the sale of the subject without INDEPENDENT VERIFICATION as they are NOT disinterested third parties.

It has been common in some markets to get a HUD-1 closing statement for a comparable sale and consider that verification. With this standard (Certification 10), a HUD-1 statement from the seller or builder of the subject would NOT be adequate verification. This new statement, however, would not prohibit using a HUD-1 closing statement from a sale that did not include parties involved in the sale of the subject. The Builder, The Sellers and The Real Estate Agents involved in the transaction ALL have a financial interest in making the deal "work".

Texas is a Non-Disclosure State making it virtually impossible to verify a "builder" sale from a disinterested third party.