Appraisals coming in much higher than comps for flips

[Aaron Jenin]

I'm in the Philadelphia area where the flip market is pretty crazy right now.  I've noticed a lot of newly remodeled homes are selling for way over what the market comps are justifying.  How is this happening?

For example, a property sold for $45,000.00 in November 2016.  It now sold for $189,000.00.  The closest comps in .25 miles are $95,000.00. How are these flips appraising for such a high amount over the current comps? And how are the banks lending so far over the market value of a particular neighborhood?  I always thought an appraiser went off current comps to help get to a price.  I get that high end upgrades and all the best trimmings adds significant value for the retail market, but not that high over market.  What am I missing?

[Russell Brazil]

It is likely 1 of 2 reasons.  Appraisal is either waived, or all cash.  The other, is comps that are further away from the subject property than you are looking.