1004mc And Comps

[CANative]

We all know the problem with the 1004MC especially in rural markets or markets with little activity. We're advised to only use truly comparable sales which often leaves us with an inadequate sampling. But A Fannie FAQ talks about using comps that are not truly comparable.

Does this perhaps mean that we can use more sales to populate the 1004MC?

Q32. Is it acceptable for an appraiser to use sales that are not truly comparable to the subject?

Yes. If there is a shortage of truly comparable sales in the area where the subject property is located, either due to the nature of the property improvements or the relatively low number of sales transactions in the neighborhood, the appraiser might need to use as comparable sales, properties that are not truly comparable to the subject property. In some situations, sales of properties that are not truly comparable to the subject may simply be the best available and the most appropriate for the appraiser’s analysis. The use of these sales is acceptable provided the appraiser adequately documents the analysis and explains why these sales were used. This may often be the case in rural locations where the best and most appropriate sales may not be truly comparable to the subject being appraised.

 

[Meandering]

Does this perhaps mean that we can use more sales to populate the 1004MC?

No.

You use only truly comparable sales, unless you don't have any truly comparable sales, then you use other sales that you used for comparison and comment.

Do not expand your comparables.

.

 

[Peter LeQuire]

Re: #1- wouldn't be surprised if it moved to that (more sales in the MC addendum) immediately, if not sooner, because you bring it up. :~)

It would be a (probably necessary morphing of the confusion built into the tortured using of the MC"s trends MC into the one-unit trends, unless, of course, there isn't sufficient information to develop supported trends on the MC addendum, in which case we're supposed to still complete the on-unit trends, but explain the information we base the one-unit trends on, putting the basis on the MC addendum. All of which is different from P 2 listings and comps..................

Milo Minderbinder couldn't have done it any better.

RE #2 - No, you don't expand your boundaries or criteria of comparability or neighborhood in order to populate the MC, but at what point does that put an appraiser in the position of having to decline/withdraw from an assignment because of the second sentence of Cert. #4?

 

[CANative]

You use only truly comparable sales, unless you don't have any truly comparable sales, then you use other sales that you used for comparison and comment.

So if there is only one "truly comparable sale" then that's the only one that goes in, but if there are "no truly comparable sales" then we can use whatever?

Do not expand your comparables.

That's not the metric. It says don't expand the neighborhood. I'm talking about sales in the same neighborhood that are not truly comparable.

 

[Meandering]

Actually p2 listing and comps are all the solds, and only the listings in the most recent 3 months column.

Clear as mud, shows nothing, but hey! how else they gonna get you to say the market is improving?

Did you ever wonder why..........

FHFA never says prices are going up based on appraisers 1004MCs?

Naw, let corelogic make those statements.

.

 

[Mr Rex]

I fill the MC form with data from the "neighborhood" or immediate market area as per Fannie edict which often results in all fields 0 or N/A. I print out another MC that is from the extended search parameters(the area required to provide" comparable" sales) include it as the next page after the MC and use that info to identify the trends on the MC. Top of page 2 like wise is often 0s

 

[J Grant]

Taht is a good idea Mr Rex I may copy it!

 

[CANative]

I've done the same as Rex since there was a 1004MC.

 

[Peter LeQuire]

This may lead to another Wiley intervention, since P1 is intended to reflect the neighborhood, not whatever larger area is necessary to capture sufficient activity to support conclusions about trends.

Neighborhood = neighborhood - or does it? I'll probably be deported to the concertina-wired re-education area behind the palace at 3900 Wisconsin Av, NW.

 

[Lee Lansford]

There's 2 sections (above & beyond the condo section at the bottom) to the 1004MC.

The very top section--the grid--is specific to those properties that are comparable to the subject. We're all aware that, very frequently, there are too few data populating each of the fields and from which to credibly opine to an "overall trend" (and "trends"). For this reason, the 2nd-half of the form allows (requires) for the appraiser to provide supplemental data--as best appropriate--and analysis as the support for the appraiser's opinions of the trends.

It is never correct to expand the search parameters for the sole purpose of populating the fields at the top section of the form.