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  #1  
Old 10-24-2009, 09:23 PM
ockyappraiser ockyappraiser is offline
 
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Default 1004 MC. . .must relate to comps on sales page?

I have done many of the 1004 MC forms since May. I also took training from Appraisal Institute, and two other organizations. All advised that the data sample should include ALL sales and listings within the subject area. . .not just those that are the comparables noted above the sales/comp section.

I have an AMC that is insisting that the number of sales and listings noted on the 1004 MC form must match the number on the top of the comps page in the report. If this was true, the sample base would be far to small in the 1004 MC to draw valid market trends.

I was taught that a large sample base was necessary to gain valid market trends, and that the 1004 MC form related to the boxes in the neighborhood section, not the sales and listings lines on the comps page.

Have I missed something?
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  #2  
Old 10-24-2009, 11:49 PM
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Duckey Duckey is offline
 
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The training we took indicated we should use any homes that a buyer of the subject would also consider. i.e. Specific Market Segement.
  #3  
Old 10-25-2009, 12:54 AM
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Quote:
I was taught that a large sample base was necessary to gain valid market trends, and that the 1004 MC form related to the boxes in the neighborhood section, not the sales and listings lines on the comps page.
I (of course) have no idea what you were taught.

My reading of the instructions at the top of the 1004MC page
is that Fannie & Freddie want "comparable properties".

If the whole neighborhood is full of comparable properties,
I'd include all the sales that I might use as comparables
(those within 1 mile??),
if it somehow happens that that's not the case, (hard to believe, eh?)
I would include only the properties that I would use as comparables.

AFAIC, if there are a grand total of 13 possible comparables sold
in the last year, those are what go into the 1004MC.

What?!, 13 are too few for a statistically significant sample and
thus no reliable trend is discernible?
Tough, they made up the rules, and they get what they ask for.

On other pages are MY analyses, and those are what I depend upon and quote in the report.

Quote:
Have I missed something?
So...have you missed something???
..
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  #4  
Old 10-25-2009, 08:32 AM
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Mike Garrett, RAA Mike Garrett, RAA is offline
 
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I often state..."sample is too small for meaningful trend analysis". I then go on to add narrative comments about the market. It appears to me the form and it's instructions have caused a major problem for the appraiser and readers of the report.
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  #5  
Old 10-25-2009, 10:40 AM
Diego Lopez Diego Lopez is offline
 
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Default

Quote:
Originally Posted by markroberts View Post
I have done many of the 1004 MC forms since May. I also took training from Appraisal Institute, and two other organizations. All advised that the data sample should include ALL sales and listings within the subject area. . .not just those that are the comparables noted above the sales/comp section.

I have an AMC that is insisting that the number of sales and listings noted on the 1004 MC form must match the number on the top of the comps page in the report. If this was true, the sample base would be far to small in the 1004 MC to draw valid market trends.

I was taught that a large sample base was necessary to gain valid market trends, and that the 1004 MC form related to the boxes in the neighborhood section, not the sales and listings lines on the comps page.

Have I missed something?
As already stated, they want you to use comparable properties, read the instructions section.
With that said, you are also correct in that unless you have over 30 +/- comparable sales within the last year, the sample base is to small to draw any valid market trends conclusion.
This is why the form is flawed.
  #6  
Old 10-25-2009, 11:53 AM
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DMZwerg DMZwerg is offline
 
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Quote:
Originally Posted by Diego Lopez View Post
With that said, you are also correct in that unless you have over 30 +/- comparable sales within the last year, the sample base is to small to draw any valid market trends conclusion.
This is why the form is flawed.
During a break at a recent CE class this came up, namely what sample size is statistically significant and yes 30+/- is roughly "the magic number". If somebody else wants to go into details fine but basically around 30 is where the chance of error starts dropping in a fairly homogeneous sample. Just thought I would mention it again.

On the other hand if you see a smaller number hitting VERY close then that can be significant as well and is basically what an appraisal does (aka, looks at the 3 most similar to show significance). Remember that the original sample size is actually MUCH larger and it is pared down to the most similar and/or most significant few OR if the sample is too small an appraiser generally mentions why the more diverse were used and how the credible opinion is derived from a less than significant sample.

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  #7  
Old 10-25-2009, 12:52 PM
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30 is enough?

If the market was exactly consistent that would mean 15 in the first six months and 7 or 8 in each of the previous 3 month market segments. That's two or three sales a month.

I wasn't taught anything but it doesn't take much mental horsepower to realize this is not enough information to have any statistical meaning.
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  #8  
Old 10-25-2009, 12:56 PM
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That's what I believe too...thus my statement on the form.
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  #9  
Old 10-25-2009, 01:24 PM
MDAPPR MDAPPR is offline
 
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Considered the source and credibility from fat Fannie who is in current government rehab for consuming too many tinkies and hohos (no disrespect to the junk snack food industry or the big 4 US banks) at the cost American people's dollar. Of course they made the 1004MC ambiguous. I can't wait for the day when we'll never ever see a GSE appraisal form again, or a carcinogenic AVM or a BPO for that matter.
  #10  
Old 10-25-2009, 01:33 PM
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Quote:
Considered the source and credibility from fat Fannie who is in current government rehab for consuming too many tinkies and hohos (no disrespect to the junk snack food industry or the big 4 US banks) at the cost American people's dollar.
They traded their houses they bought on the GI Bill
for flag draped Ski-Doos to stuff Sam Walton's till.


My apologies to John Prine.
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