1004mc And Comps

[Tim The Enchanter]

If you are in the Land of Plenty, it may work; it has never worked in my area

Yeah, it usually works in town, but not in BFE or on Fantasy Island.

 

[Meandering]

Connect the dots?

Now that's badddddddddddd


.

 

[DWiley]

I vote no as well.
Indeed, in a CE presentation I give, I argue that the lack of data to populate the 1004MC provides reason and supports the decision for going (a) further back in time, (b) farther out in distance, or (c) using properties that would not normally be categorized as comparable to the subject.

So I'd populate the 1004MC with the 2 sales and zero listings that the comparable search captures (of course, like you, I clearly state what the search criteria is... in fact, I'd argue this is required information on the form). Then, I state that it is evident from the 1004MC analysis that ideal sales to use as comparables do not exist. Therefore, I did blah, blah, blah; the result is the 4-sales in the grid which represent the best comparables to consider and analyze for this assignment.

Exactly !! In the case dscribed, the lack of data in the 1004MC grid and the Inventory section on page two adds credibility and supports the need to use sales that are dated, dissimilar, etc. MC can stand for Meaningful Content if one just follows the directions

 

[gregb]

I vote no as well.
Indeed, in a CE presentation I give, I argue that the lack of data to populate the 1004MC provides reason and supports the decision for going (a) further back in time, (b) farther out in distance, or (c) using properties that would not normally be categorized as comparable to the subject.

So I'd populate the 1004MC with the 2 sales and zero listings that the comparable search captures (of course, like you, I clearly state what the search criteria is... in fact, I'd argue this is required information on the form). Then, I state that it is evident from the 1004MC analysis that ideal sales to use as comparables do not exist. Therefore, I did blah, blah, blah; the result is the 4-sales in the grid which represent the best comparables to consider and analyze for this assignment.

Manufactured home recently completed, on 16 acres, included one 1004MC with no sales, no listings as well as a pile of zeroes. Information stated on page one of appraisal was not based on the 1004MC.

 

[DWiley]

Manufactured home recently completed, on 16 acres, included one 1004MC with no sales, no listings as well as a pile of zeroes. Information stated on page one of appraisal was not based on the 1004MC.

The grid at the top is just part of the 1004MC form. In a case where the data in the grid is too limited for trend anlysis the appraiser should use that big comment field in the middle of the form to add more data/analysis. Do that, and then the trends on page 1 will match the 1004MC - which is what Fannie requires - and the grid will support the use of sales that are dated, dissimilar, distant, etc. Just following the simple directions helps create a report that is credible and internally consistent.

 

[Meandering]

I use the middle of the form to say,

See the attached 7 page market condition addenda for the market conditions in the neighborhood.

Even when there are comps in the neighborhood, there usually isn't enough of them in each reporting period to ascertain a trend. One does not make a trend.

 

[DWiley]

I use the middle of the form to say,

See the attached 7 page market condition addenda for the market conditions in the neighborhood.

Even when there are comps in the neighborhood, there usually isn't enough of them in each reporting period to ascertain a trend. One does not make a trend.

I used to do a very similar thing. i would put a brief summary in the comment field and refer to an addendum - usually created using the SMART software

 

[gregb]

The grid at the top is just part of the 1004MC form. In a case where the data in he grid is too limited for trend anlysis the appraiser should use that big comment field in the middle of the form to add more data/analysis. Do that, and then the trends on page 1 will match the 1004MC - which is what Fannie requires - and the grid will support the use of sales that are dated, dissimilar, distant, etc. Just following the simple directions helps create a report that is credible and internally consistent.

Thanks. That comment field in the middle of the form was not large enough to add what needed to be included. Used it to refer to the appraisal addendum commentary as well as graphs and market data to support the conclusions relating to market conditions.

 

[Meandering]

I built an excel program, export the MLS into it and it graphs and comments to:
Sales and Listings volume,
Financing as a pie chart for types used including cash,
It separates REO, Shorts and Owner Occupied and trends prices, square footage, listings.
It forecasts out 45 days based on historic sales and pending sales.
It gives the spread sheet summaries of the high, low, median and averages of the sales and listings in total, and by REO, shorts and owner occupied.
3 minutes to upload the MLS into it, print it to PDF and attach it in the report.

I might screw up some other part of the report, but they'll never say I did not completely analyze the market.

.

 

[Terrel L. Shields]

It is a screwed up form that is a poor substitute for a real analysis

If you had two like buttons, I'd give you both of them

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

...but back to the original question

Since we cannot define "truly comparable" (??? can we???) then to me, the "neighborhood" is almost always a mixed community of complimentary uses - retail, multi family, single family and "the rest" (small large ag, commercial, industrial, whatever)

If mixed, then the people are likely mixed income and demographic. So why would the MC NOT consider the entire mix of property? Steamboat Spg., CO has a lot of rich folks, but even there the difference in the demographic is obvious. Those waiters and bartenders come from somewhere, and yet are part of the community.

People with cash may live in $1,000,000 homes, but they may also be a significant buyer of $50,000 homes to rent out. And most appraisals I have seen indicate rental rates of 10-20% when the census clearly states 30-40%?? So 40% of the market may be the same buyer pool as that of the few million dollar properties in the community.

For small towns, I consider the entire town as a "neighborhood"...trying to dissect them into parts is little more than wild-eyed redlining without a purpose.