Can off-market or private sales be used as comps in an appraisal?

A sale is a sale, if you can prove it

The question I care about is not where a house was marketed. It is whether the sale tells me something true about what buyers pay for homes like the subject.

A private sale between a motivated buyer and a motivated seller, with both sides represented and nobody related or pressured, is market evidence. It did not need a yard sign to count. Plenty of good sales in high-end and tight markets never see a public portal.

What a private sale does need is proof. Off-market deals leave a thinner trail, and appraisers are only as good as what they can confirm. A comp I cannot verify is a story. Stories are great at open houses. They do not belong on an adjustment grid.

How an appraiser verifies a private sale

When information comes from a party with a financial interest in a transaction, it has to be verified by disinterested third-party sources. NAR's appraiser independence brief describes that requirement under Freddie Mac's guidelines, and it is how I treat any sale an agent hands me.

For a private sale, verification usually means:

• Public records: the recorded deed and transfer, the date and, where available, the price.
• The MLS: private sales are sometimes entered after closing so they show up in the data.
• The terms: concessions, credits, whether the buyer and seller were related, and whether anything other than the house was included.
• The property itself: size, condition and features, confirmed through records, photos or the parties to the deal.

Fannie Mae has a specific version of this for one case. For builder sales from competing projects that are not in traditional data sources, the appraiser must verify the sale from the settlement statement and say so in the report.

The "for comp purposes only" MLS entry

You have seen these. A listing goes into the MLS with zero days on market, the same list, pending and close dates, a sale price that matches list to the dollar, and a remark that says "for comp purposes only."

In my view, that pattern usually means the home was pre-sold through the agent network and entered after the fact so the sale is on record. That is an off-market arm's length transaction, not a red flag by itself. Zero days on market is not suspicious when the house was never really on the market. It is just honest bookkeeping.

I still verify it like any other sale, and I still look for anything that would make it not arm's length, like a family relationship or a seller under pressure. But I do not throw it out because of how it was entered. Excluding real sales because they look unusual is how a report ends up with less evidence than the market actually produced.

What private sales cannot tell you

Private sales come with blind spots, and a good report says so.

• No marketing history. Redfin notes that its Private Exclusive and Coming Soon listings do not display insights like days on market or price drops. I cannot tell how many buyers saw it or how long it would have taken on the open market.
• Less exposure. Fewer buyers means fewer chances to find the top one. A private price may land above or below what open marketing would have produced, and the record alone usually cannot say which.
• Hidden terms. A side deal, a leaseback or a credit may not appear anywhere public. If the parties will not confirm the terms, the sale gets less weight.
• Office exclusives in progress. Under NAR's 2025 policy, an office exclusive listing is not shown to other MLS participants. Until it closes and records, there is no comp to use.

How private sales fit with lender rules

For Fannie Mae loans, the sales comparison approach needs at least three closed comparables. A verified private sale can be one of them. Pending sales and current listings can be added as supporting data, but they do not count toward the three.

Fannie also says comparables that closed within the last 12 months should be used, with older sales allowed when the report explains why. A private sale from 14 months ago is not automatically out. In my view, an older sale can still be useful when it is adjusted to the house and indexed forward to today, as long as the report shows that work.

Other lenders, government loans and private assignments can have their own rules. When the loan type matters, ask the lender.

What agents can do to get a private sale considered

1. Make sure it is on record. If your brokerage closed a private sale, enter it in the MLS after closing as your MLS allows.
2. Give the basics: address, close date, price, concessions, size, bed and bath count, condition notes and photos if you have them.
3. Say how it sold. Pre-sold through your network? Buyer's agent involved? Any relationship between the parties? Being upfront saves a round of questions.
4. Explain the comparison in a sentence. Why would a buyer have weighed this house against the subject?
5. Expect verification. You have a financial interest, so I will confirm what you provide. That is the rule, not a judgment about you.

Private sales are real evidence when they are verified and explained. Facts over feelings, even when the feelings are about a sale nobody else got to see.