1004MC & Neighborhood Section page 1

[Gerry Sauceda]

I am aware what the form says, but I agree with residentialguy. Isn't the 1004MC a specific sub-market of all sales in the Neighborhood, which is on page 1.

What about One-Unit Housing Price and Age? Does the predominant value only reflect the comparable market or the whole market? The same logic should be applied to the One-Unit Trend section.

This is the meat of the question- CAN THE 1004MC SHOW A DECLINING TREND AND PAGE 1 SHOW A STABLE TREND?

 

[Mr Rex]

I am aware what the form says, but I agree with residentialguy. Isn't the 1004MC a specific sub-market of all sales in the Neighborhood, which is on page 1.

What about One-Unit Housing Price and Age? Does the predominant value only reflect the comparable market or the whole market? The same logic should be applied to the One-Unit Trend section.

This is the meat of the question- CAN THE 1004MC SHOW A DECLINING TREND AND PAGE 1 SHOW A STABLE TREND?

From the instructions and the verbiage on the 1004MC, I would not. You certainly could add narrative that indicates that although properties comparable to the subject are declining, the overall neighborhood trend is stable. MHO

 

[residentialguy]

This is the meat of the question- CAN THE 1004MC SHOW A DECLINING TREND AND PAGE 1 SHOW A STABLE TREND?

Yes, absolutely!

.

 

[residentialguy]

Due to the errors on this form, you must point them out, no matter which way you decide to interpret.

If you say that form 1004mc is the same as page one, then you must make sure you make it clear that these are NOT comparable sales, like the form states. You are analyzing all one-unit properties.

If you say that the MC is analyzing Comparable Sales, as stated in the grid, then you must make sure you make it clear that these are not all one unit homes that page 1 is asking about, but rather homes like the subject.

Since the two analysis can and often are different, it is in the best interest of the client, imo, to do a MC on neighborhood and put the findings on page 1 under neighborhood section. Then do a MC on the comparables and place the results on the MC form where is specifically says "Comparables" and talk about the findings and any differences there might be from the neighborhood results.

If the MC Comparable sales include everything, then the active and sold comparables mentioned above the sales grid should be everything. It would then probably look something like this: "There are 397 comparable sales in the subj neigh within the past 12 months ranging in price from $5,000 to $4,500,000." :mellow:

Keep comparables, comparable...and neighborhoods, neighborhoods.

 

[Gerry Sauceda]

Due to the errors on this form, you must point them out, no matter which way you decide to interpret.

If you say that form 1004mc is the same as page one, then you must make sure you make it clear that these are NOT comparable sales, like the form states. You are analyzing all one-unit properties.

If you say that the MC is analyzing Comparable Sales, as stated in the grid, then you must make sure you make it clear that these are not all one unit homes that page 1 is asking about, but rather homes like the subject.

Since the two analysis can and often are different, it is in the best interest of the client to do a MC on neighborhood and put the findings on page 1 under neighborhood section. Then do a MC on the comparables and place the results on the MC form where is specifically says "Comparables" and talk about the findings and any differences there might be from the neighborhood results.

If the MC Comparable sales include everything, then the active and sold comparables mentioned above the sales grid should be everything. It would then probably look something like this: "There are 397 comparable properties in the subj neigh ranging in price from $5,000 to $4,500,000."

Keep comparables, comparable...and neighborhoods, neighborhoods.

I totally agree.

 

[residentialguy]

Many times there aren't enough comparable sales to even fill out the MC. In that case I use the whole Neighborhood analysis and explain that these are not comparables and the results may vary.

 

[residentialguy]

You know, I was looking over FNMA guidelines and I noticed something. Does FNMA consider any residential sale a comparable? Any sale could be a comparable, with enough adjustments.

Look at this; on page 2 http://www.metrowestappr.com/newsletters/docs/fanniemae_mh_appraisal_guidelines.pdf


Improper selection (or creation) of comparable sales -- appropriate comparable sales are available, but the appraiserselects comparable sales that are not comparable to the subject property; are located in superior, non-competing neighborhoods;

Comparable sales that are not comparable??? Why wouldn't they say "the appraiser selects sales that are not comparable?"

 

[james stephens]

I agree with residentialguy. The instructions to the 1004MC were not well thought out and are contradictory. Of the two schools of thought on the interpretation of the instructions I'm in the camp that the 1004MC should represent the sub-market of the Subject neighborhood and I end up running two MC's for every report I do; One for the sub-market and one for the entire neighborhood . I put a statement in the MC explaining what it represents and how to doesn't necessarily represent the Subject neighborhood as a whole.

From the Instructions:
"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."

 

[Mike Garrett RAA]

My analysis includes comparable properties not the entire neighborhood, subdivision, or marketing area. Was told the data on the 1004mc should relate to those properties shown on the top of page 2. No one has every questioned my analysis.

This brings me to another question. Should we, as appraisers, toss out the outliers? For example, there might be a sale of a terribly distressed property for, say, $90,000 when all of the typical sales within the neighborhood are, say, $250,000 and up? In another neighborhood the typical residence is, say, $500,000 to $750,000 but there is a sale of a very unusual property for $2,500,000. I find these tend to distort the data and are not meaningful or comparable.

We, as appraisers, need to analyze the data per USPAP? Does that include deciding which properties should be included and which should be discarded. Inquiring minds want to know?

 

[Mejappz]

My analysis includes comparable properties not the entire neighborhood, subdivision, or marketing area. Was told the data on the 1004mc should relate to those properties shown on the top of page 2. No one has every questioned my analysis.

This brings me to another question. Should we, as appraisers, toss out the outliers? For example, there might be a sale of a terribly distressed property for, say, $90,000 when all of the typical sales within the neighborhood are, say, $250,000 and up? In another neighborhood the typical residence is, say, $500,000 to $750,000 but there is a sale of a very unusual property for $2,500,000. I find these tend to distort the data and are not meaningful or comparable.

We, as appraisers, need to analyze the data per USPAP? Does that include deciding which properties should be included and which should be discarded. Inquiring minds want to know?

Mike, that's what I do. I just did one were I eliminated 5 homes that were ranging in price from $50,00-$90,00, when almost all of the homes that were comparable were from $165,00-$300,000 range. I also eliminated one that was $500,00 from the equation.