1004MC Addendum Error

[tim midgards]

I do each one manually and find it acceptable and not too time consuming. As far as pendings, I count those as part of the active listings. Until it closes...it's not a sale.

One of the things I am finding is insufficient data for meaningful trend analysis. There might be 12 sales in the 7-12 month period, 6 in the 90 to 180 day period, and only one or two in the current 90 day period due to slower sales during the winter months. The raw data would indicate a declining market when that really isn't the case.

Also, my MLS won't give me the number of listings for past periods...only what is current now. Got a stip from an underwriter saying I must include that data even if it isn't available. I just laughed.

I always note these inconsistencies in the 1004MC, I guess I "refuse" to determine a trend then.

 

[George Hatch]

We could play devil's advocate and say there haven't been complaints because appraisers have been diligent in their own research


I use the MLS generated 1004MC for cookie cutters or to "determine" trends within a zip code (i.e. loose support of what I've already stated in the report through other sources), but it is worthless for active listings due to MLS limitations, so I complete that part manually.

An alternative to the 1004MC is to independently research the market through MLS and public records, that way you can actually stay within the neighborhood boundaries, as the MLS generated 1004MC is unable to do so.

The 1004MC really only works once in a while.

Of all the MLS systems I've seen that had data export capabilities, I've only seen a couple of them where I couldn't figure out how to get the listing counts. The only reason a system becomes unworkable is if the data itself has holes in the info, particularly blank date fields for listings, off market (exp, cancelled,, withdrawn or pending) and closed sales.

If a system can accurately export those dates then those records can be sorted and analyzed by one or more of the worksheets. I've had to customize my worksheets for several stubborn MLS systems with wonky data quality, but I've only run into a couple where the data quality was so bad I couldn't get it to work.

With all that said, I still don't think the statistical analysis comes to mean much unless/until you get enough data that's of sufficient comparability to run it. GIGO. Datasets of less than 10 records per period don't usually return very usable results.

BTW, you can't get the number of actives as of the last day of a period (per Fannie's instructions) without sorting through all the expired, withdrawns, cancelled and closed sales data that were active during those periods. I don't believe the idea that because it's often impractical to do it by hand justifies skipping that portion of the analysis altogether if there are automated solutions that are readily available to you that can do it.

A few of these worksheets are available to appraisers from different providers for FREE - so that availability guts the "too expensive" objection. OTOH, if the objection is that the individual cannot or will not take the time and effort to learn how to use the tool then at that point we're starting to get into a discussion about whether that person has the requisite competence in the "recognized methods and techniques that are necessary to produce a credible appraisal."

 

[residentialguy]

George,

What do you think of SFREP's approach? It seem more straight forward the our Matrix MLS 1004MC. http://www.sfrep.com/1004MC/calc/
I find the biggest variance between them is the 0-3 months active results. I think MAtrix uses only currently active.

 

[RSW]

The MC spreadsheet offered by the local Tempo MLS system has 2 errors when used according to the directions provided. If does not include any active listings over 12 months (if there has not been a status change in the past 12 months, price can be reduced etc and it will not be included unless the status is changed from active to withdrawn, pending, expired, closed,etc) and it does not properly populate the 0-3 month field per Fannies latest instructions. When I pointed it out to the IT guy @ the local MLS he told me how to quickly find the proper numbers, but to date no corrections or even a heads up to other appraisers of the shortcomings.:new_smile-l:

I use David Brauns' "Total Solution" progam. David recommends going back 3 years using the off market feature to get all of the listings. It works well for me.

 

[David Mescon]

Makes you wonder why appraisers don't construct their own 1004MC download and their own spread sheet to assemble the data in summary 1004MC format.

That's what I've always done. I also embed a copy of the spreadsheet in each report with an MC form. It includes, among other things, the Hawaii equivalent of an APN, so the reader has the option of verifying the appropriateness of the data, should they so choose.

 

[George Hatch]

George,

What do you think of SFREP's approach? It seem more straight forward the our Matrix MLS 1004MC. http://www.sfrep.com/1004MC/calc/
I find the biggest variance between them is the 0-3 months active results. I think MAtrix uses only currently active.

One thing I'm not in tune with is their approach to calculating median sale price / listing price.

This field shows the median sale price as a % of list price for the properties that actually sold (have a sold status) during each time period.

It is calculated by finding of the Median List Price of the Closed Sales and dividing it by the Median Comparable Sale Price.

This is not calculated by dividing the Median Comparable List Price by the Median Comparable Sale Price.

http://sfrep.com/support.php?s=online&id=1056

There are a couple different ways to read the line on the MC form that says:

"Median Sale Price as % of List Price".

One way is to read it as "Median Sale Price as % of (median) List Price (for those sales)". By their description, this appears to be the way the SFREP program has approached it. Hence their line "It is calculated by finding of the Median List Price of the Closed Sales and dividing it by the Median Comparable Sale Price"



The other way to read that line on the MC form is like this:

"Median (Sale Price as % of List Price)"

(my bold). This refers to calculating a separate SP/LP ratio for each sale and identifying the median % of the dataset. That's the way my worksheet and several others does it.

One could argue that the latter method produces a nominally more meaningful result in that the relationship being examined is that between (the one listing price) and (the one selling price that resulted from that listing),

as opposed to (the median list price for the entire dataset) being compared to (the median sale price for the entire dataset).

We actually queried Fannie on this issue at the time I was working on the worksheet and as I recall this was their stated preference at the time. If that (reported) preference has changed during the interim I'm not aware of it. If someone proves that Fannie's position on this is different I'll be happy to make the necessary correction posthaste.


Now it's been a couple years since I built this worksheet and I seldom use it myself. But to date my download site has logged over 14,000 downloads of the various versions of the worksheet, not to mention the direct adoption of my worksheet directly into a couple of the MLS software platforms that are in use by various MLS boards across the nation. Nobody has complained about this approach being in error yet, although that may change in the next 20 minutes.

FYI, the Matrix system was a real PITA to work with in the beginning because of the lack of flexibility with their download/export formats and the fact that each MLSA board was using a somewhat different column order in their downloads. I also had some problems with the way some of the boards count their days on market. I think they may have tweaked their software since then because I'm not getting requests for customized worksheets any more. Thank goodness for that because the amount of time I spent on those modifications cost me. "Free" always costs somebody.

 

[Delta85]

Same here. The 1004MC feature on our MLS is also unreliable. I pointed out the two errors that myself and my partner discovered shortly after it came out. We have spoken with the IT folks at the MLS and they have always been very polite and let us know that they "would look into it". Finally, after calling over a period of 15 months or so, the IT guy became very frank with us. He said that myself and my partner are the only ones who have ever pointed out the inadequacies of the feature. He also told us, bluntly, that the MLS is mainly concerned with keeping the Realtors happy and it was likely that the shortcomings of the MC feature would never be fixed. I had always kind of expected that we were just getting lip service, but at least he was kind enough to finlly comfirm that suspicion.

Appraisers should not lose sleep over the accuracy of MLS data when completing the 1004mc form. We are not responsible for this data base and have no control what is posted or not. I add comments on the form itself that the MLS data is often incorrect or that certain data is often not included and that I am not liable for the effect this has on my results and reporting.

 

[Elliott]

Since Fannie and AMCs paid $0 for the MC, its value is what they paid for it.
I could cull 50 listings to be more meaningful, but everybody is happy with
the numbers that fill it in. Its guidelines baby, not meaningful analysis.

 

[residentialguy]

George,

Your worksheet is very close to Matrix 1004MC. SFREP's is much different

Here is your worksheet



Here is Matrix



Here is SFREP's

 

[residentialguy]

I don't know why the total active listings are so off with SFREP....same with median comp sale DOM. Maybe I screwed up on a couple of the exports