1004mc

[residentialguy]

You're mixing up "should" with "must"....

It is "must". Any questions with that?

which does not mean only the data on grid, if such limited data is present, but the conclusions from that lmited data and any related data of similar properties/comparable to is what Fannie wants on page one, not the general market

That's right. And it does not have come strictly from sales data...this can be supported with many means, including interviews with local RE Agents that specialize in the neighborhood, or changes that are happening in the neighborhood (gentrification), etc.

 

[residentialguy]

"Some UAD/FNMA "experts" here have skin in the game, whether it's FNMA classes they teach or they are tied to companies that sell to GSEs....and I find they may find it in their best interest to say things a certain way and not rock the hand that feeds them."

Are you referencing me in the last sentence above?

Do you fit the mold, Rich? Let's test it. Obviously you teach FNMA specific courses. So, let's find out if you are willing to rock the hand that feeds you: Do you find it misleading to label the form one thing and expect something completely different? e.g. "One Unit Housing Trends" yet want specific Comparable Housing Trends. How about asking for "Market Value" yet wanting a different value with different conditions of sale?

 

[J Grant]

It is "must". Any questions with that?


That's right. And it does not have come strictly from sales data...this can be supported with many means, including interviews with local RE Agents that specialize in the neighborhood, or changes that are happening in the neighborhood (gentrification), etc.

Exactly. Which is why the comment that the data is too limited on the grid or too weird aka seasonal etc is not valid...our conclusions are not supposed to be robotic, confined to a few numbers on a grid. Our conclusions coming from genuine interaction with market every day, such as interviews with agents, seeing the changes in neighborhoods etc is what differentiates us from an AVM. If we can't draw meaningful conclusions about a subject market, including what lack of sales might indicate , or a wide or fluctuating range of prices/conditions/ property types indicates, we are not competent for the assignment.

If markets were neat, tidy, predicable with data the only differential, we would not be needed. Even a homogeneous market with many sales needs analysis...if there are too many sales/homes listed, it means lots of properties competing , and its' an art to pick the best comps when there are almost too many around.

 

[Don Clark]

My work often takes me to neighborhoods with limited listing activity. There have been occasions where the 1004MC report had a lot of zeroes in the boxes. I have seen other appraisers prepare an addendum that includes adjoining neighborhoods that they consider competitive. My question is....

Do you prepare the 1004MC and if is has limited to no information so be it and you state that that there is insufficient information from which to draw conclusions?

Or,

Do you prepare an additional 1004MC Addendum that includes listings from competitive areas and include it in your report?

Thanks!

It depends. If it is a rural area then Fannie Mae guidelines apply based on a rural area. I have a county in North Carolina that does not even have a city. In that case, the entire county is included on the 1004MC. I have one in Virginia that I am doing Monday that has had 3 sales, 1 listing in past year. Yes I will puit that data on a 1004MC but also use comps from an adjoining comparable neighborhood. I also believe, and have "expanded" the area to include the adjoining neighborhood where additional comps came from and did so with full disclosure. I believe that is appropriate if you choose to do so.

 

[J Grant]

It depends. If it is a rural area then Fannie Mae guidelines apply based on a rural area. I have a county in North Carolina that does not even have a city. In that case, the entire county is included on the 1004MC. I have one in Virginia that I am doing Monday that has had 3 sales, 1 listing in past year. Yes I will puit that data on a 1004MC but also use comps from an adjoining comparable neighborhood. I also believe, and have "expanded" the area to include the adjoining neighborhood where additional comps came from and did so with full disclosure. I believe that is appropriate if you choose to do so.

It's appropriate when what we choose to do reflects what the market "chooses" . Would a typically motivated buyer for your subject in a rural area look throughout the entire county? Or would they look in certain segments of the county, that even if far apart in distance, share similarities to the subect area/location?

Your example of using comps from adjoining comparable neighborhood makes sense...I might add the two might be considered one "neighborhood", if comps are from both and a buyer would consider either

 

[residentialguy]

It depends. If it is a rural area then Fannie Mae guidelines apply based on a rural area. I have a county in North Carolina that does not even have a city. In that case, the entire county is included on the 1004MC. I have one in Virginia that I am doing Monday that has had 3 sales, 1 listing in past year. Yes I will puit that data on a 1004MC but also use comps from an adjoining comparable neighborhood. I also believe, and have "expanded" the area to include the adjoining neighborhood where additional comps came from and did so with full disclosure. I believe that is appropriate if you choose to do so.

Don, you can't put adjoining comp data on the MC form. The form strictly wants comps within the subject's neighborhood. You can add additional analyses to the comments and then base your overall trends on your complete analysis of subject and adjoining comp data.

 

[residentialguy]

I might add the two might be considered one "neighborhood", if comps are from both and a buyer would consider either

That's a stretch. Just because a buyer is willing to live in 2 different neighborhoods, doesn't make both of them one neighborhood.

 

[J Grant]

Don, you can't put adjoining comp data on the MC form. The form strictly wants comps within the subject's neighborhood. You can add additional analyses to the comments and then base your overall trends on your complete analysis of subject and adjoining comp data.

I responded on above post that the two actually might be considered one neighborhood...if the appraiser is using comps from both, they are one market area "neighborhood" for the subject, even if they are located in different subdivisions or adjoining counties or whatever the geo or legal name division is.

Additional analysis is data of lesser comparable properties to subject...useful for analysis but not the actual comps one uses in report (or on the MC grid). If one uses a comp in a report that sold within past year, why isn't it on the MC grid?

 

[residentialguy]

I responded on above post that the two actually might be considered one neighborhood...if the appraiser is using comps from both, they are one market area "neighborhood" for the subject, even if they are located in different subdivisions or adjoining counties or whatever the geo or legal name division is.

I already responded to your response

 

[Don Clark]

It's appropriate when what we choose to do reflects what the market "chooses" . Would a typically motivated buyer for your subject in a rural area look throughout the entire county? Or would they look in certain segments of the county, that even if far apart in distance, share similarities to the subect area/location?

Your example of using comps from adjoining comparable neighborhood makes sense...I might add the two might be considered one "neighborhood", if comps are from both and a buyer would consider either

That's the way I see it. Sorry Residential Guy but I use common sense. Never have had any underwriter challenge what I have done in that regard. Fannie Mae, living in their white tower has never comprehended that the most applicable term is not "Neighborhood" but market area. I have some local neighborhoods that are 1 block and 1 street long with fewer than 30 houses. Like Limbaugh, I live in Realville".