1004 Mc ?

[Jason S]

This form is supposed to show trends in the neighborhood. If it is for the neighborhood why does it ask for "comparable information"? Everything in the grid is based on a comparable.


I am torn on what information to provide in this form for a particular report.

I have a home where the "comparables" are in the $1,000,000 range. But in another zip code less than 1/2 mile there are homes selling in the $600+K range. Now these homes are not "true comparables".


How far out do you consider a "neighborhood". WOuld you include the other zip code for your search for this form? If so would you comment that this form is inaccurate because it takes into consideration information from MLS on properties that are not true comparables.

 

[Tom Woolford]

I define my neighborhoods fairly closely, and do not expand them to accomodate putting useless data into the MC form. For comparables sales, I will go outside the neighborhood if required, adjusting accordingly, but that data is not included in the MC. If there is insufficient data in your neighborhood to populate the MC, so be it. Explain why the data is useless and move on.

 

[Mike Garrett RAA]

Consider the top of page II and make th 1004mc similar

 

[Jason S]

Consider the top of page II and make th 1004mc similar

But the top of page 2 asks for comparable sales not "Neighborhood" sales.

I don't think the form is clear enough on the information they are looking for.

I have asked many appraisers I know & everyone has a different answer.

IMO the neighborhood can be totally different then comparables & they need to either ask for one or the other. It just feels they made the form that way so if the S*** hit the fan again they can put the blame on the appraisers.

 

[VegasWayne]

The 1004MC instructions state "Sales and listings must be properties that compete with the subject property, determined by applying the criteria that would be used by a prospective buyer of the subject property." Even though you 600K and 1,000K properties are within a half mile of each other, they probably don't compete with other in the market.

 

[Mike Kennedy]

Fannie's New Video Training - Learn How to Use the New Market Conditions Addendum

Gain an understanding of and recognize the sources of market information necessary to analyze market conditions. Our new recorded training is organized to address the Market Conditions Addendum (Form 1004MC), effective April 1, 2009, section by section. Also review the FAQs for additional information about the form and other appraisal topics.

• View Recorded Training
• FAQs (.pdf)

 

[TennMan]

my $0.02

I think everyone gets a bit confused on the neighborhood/sub-neighborhood/market area stuff. Whatever you do, be consistant and comment towards what your interpretation is.

I would suggest that what FNMA wants for the competing area is made up of whatever would be considered by a consumer when shopping for a home. In my area, the sub-market consists of the entire city limits, when the subject is within the city, of course. The reason being is that the school district for the City is a major contribution to what a consumer would buy. The slow volume of available sales also dictates that I need to consider this large area (my city is a very small city) vs. just using the actual subdivsion. You need a volume of data to run stats and get back credible results.

Neighborhood- A group of complementary land uses; a congruous grouping of inhabitants, buildings, or business enterprises. (The Dictionary of Real Estate Appraisal 4th Edition, Appraisal Institute)Real Estate Market- The interaction of individuals who exchange real property rights for other assets such as money; a group of individuals or firms that are in contact with one another for the purpose of conducting real estate transactions. (The Dictionary of Real Estate Appraisal 4th Edition, Appraisal Institute)Market Segmentation- The process by which submarkets within a larger market are identified and analyzed. (The Dictionary of Real Estate Appraisal 4th Edition, Appraisal Institute)Subject's Sub-market- The total pool of comparable properties from which a potential set of purchaser might (in the case of closed sale) have considered purchasing , or (in the case of an on-the-market property) might consider purchasing. Implicit in this definition is that this particular set of purchasers has both the desire and ability to purchase the properties. If a specific set of purchasers would consider the "Subject Property", but not Property B, then Property B, would not be in the Subject's Sub-market. The Subject's Sub-market may be all or only a segment of its neighborhood. (1004MC Total Solutions, Automated Valuation Technologies, Inc. 2009)

 

[Mike Garrett RAA]

This should be left up to the individual appraiser who knows his/her market(s). IN MY MARKET, as an example, there are two subdivisions separated by a street. Different schools districts, different HOAs and dues structure, and definitely different value. These are not competing subdivisions!

My community is approaching 1/2 million people...using the entire city would be totally misleading. Still think the issue is "comparable properties". Do they need to be in the same neighborhood, subdivision, or MLS marketing area?

Inquiring minds want to know.

 

[Lloyd Bonafide]

This should be left up to the individual appraiser who knows his/her market(s). IN MY MARKET, as an example, there are two subdivisions separated by a street. Different schools districts, different HOAs and dues structure, and definitely different value. These are not competing subdivisions!

My community is approaching 1/2 million people...using the entire city would be totally misleading. Still think the issue is "comparable properties". Do they need to be in the same neighborhood, subdivision, or MLS marketing area?

Inquiring minds want to know.

Mike - your problem is that you are trying to make sense of this form, and of the instructions. That's very admirable, but it just isn't possible. Give it up. :icon_mrgreen: