And here we go with Revisions requested on Time Adjustments

[Tom D]

Interesting post, here is my concerns:
1. you do have to be consistent with data, or info, that you put or change in the report. Does that info, or change, match another part of the report where it is mentioned.
2. your 1004mc is totally skewed by the lack of data, or some outlier sale in that middle period. At worst i would have said stable. You might have also used too wide a sale price range in your comp search. Too wide of a range with too few sales really skews the 1004mc. Would have been better to have zero sales, or take out the high sale, in that middle time period. Then it looks more stable than going down. You have too be very careful with outlier sales. Was it to high, or to low, and why. A market can have fluctuations, but still be stable. I always look at the 1004mc to make sure it don't look goofy.
3. Did you go back and use all the sales in the neighborhood which doesn't necessarily give you the right %, as would similar sales in any period such you used in the 1004mc. And you went back to a time period where values were increasing very differently than the last 12 months.

We have a appraiser trainee asking this question. You supervisor is a total dope to have let it go this far. You are going to have future problems from the lack of proper training. This blog will help you, if you can take the slapping around sometimes. I have learned many things here from better appraisers. And better things about what not to do, cause then it's too late. I like you post as to now we are in the new derangement of time adjustment perfection phase.

 

[Dale Floyd]

To OG80 - It speaks well of you to try so hard to find compliance and justification. I think all of the elders out here appreciate that you've done what so many should - ask for advice...

Regardless of the tone, there is a ton of wisdom in this blog that is based on reality, not some program nor the talking heads who pretend they understand more about analysis and valuation than the appraiser who has inspected and reviewed the applicable market information.

In rural areas with limited data, you really need to use macro data of a larger swath rather than a smaller set of boundaries. Going past 12 months becomes irrelevant as well, unless your comparable sales require a longer timeframe than 1 year (which has happened historically, but not in a minute.)

Just take a very deep breath, and rethink what you are trying to achieve. This really isn't about a trend from 2+ years, as that's irrelevant. This is about what's real in the timeframe of your sale activity which is likely limited to 12 months. Broaden your search and, if necessary, eliminate the outliers. Say and support what you know - It's also okay to say what you can't know.

 

[Tom D]

Like Dale said above, when there are fluctuations with very limited data, then you can say 0 based on there isn't enough data to determine a time trend, so no adjustments were made. That's less getting into trouble then getting the wrong time trend with the wrong information. Especially now, if that changes your final value. Your lender, if wanting to be mean, would send it to the state.

 

[Zoe]

To OG80 - It speaks well of you to try so hard to find compliance and justification. I think all of the elders out here appreciate that you've done what so many should - ask for advice...

Regardless of the tone, there is a ton of wisdom in this blog that is based on reality, not some program nor the talking heads who pretend they understand more about analysis and valuation than the appraiser who has inspected and reviewed the applicable market information.

In rural areas with limited data, you really need to use macro data of a larger swath rather than a smaller set of boundaries. Going past 12 months becomes irrelevant as well, unless your comparable sales require a longer timeframe than 1 year (which has happened historically, but not in a minute.)

Just take a very deep breath, and rethink what you are trying to achieve. This really isn't about a trend from 2+ years, as that's irrelevant. This is about what's real in the timeframe of your sale activity which is likely limited to 12 months. Broaden your search and, if necessary, eliminate the outliers. Say and support what you know - It's also okay to say what you can't know.

Absolutely. You have been in the business a long time. Give grace.

Always focus on competing properties with the subject.

 

[The Bob]

That 1004MC doesn't look that bad to me. In fact in my market that would pretty good assuming those are true comps. So what has the last 3 months included? Maybe some seasonal slow down around the holidays? What was going on in the prior period? Maybe the normal slowdown as we get into late summer vacation season and close to the new school year? And finally, what was going on 7-12 months ago? Maybe your market has a strong spring market like mine. Look at your absorption rates. Pretty stable. Look at your DOM. pretty typical with lower DOM in the Spring early Summer. Typical ebb and flow on prices too.

The main thing I see is you took the raw data too literally. And then you applied that to your adjustments. I agree with another poster that that looks like an overall stable market to me with some seasonality.

 

[Zoe]

Always focus on the subject and real property rights on MV appraisal............Everything else can be in peripheral vision.

On the 1004mc, you need properties that are most competitive with subject. Always.

 

[GWISC]

Your MC report lacks data (too few sales to generate a reliable trend). The trend, albeit with too few sales, indicates a decline in your subject's submarket within the past year. Your upward adjustments for market conditions (time) is contradictory to trend indicated in your MC table. Your property, like all others, are part of a more specific submarket within the broader market. If you need to go out more than a mile to find more similar sales within the subject's submarket, then do so. The 1 mile Fannie and Freddie requirement was something from long ago that is no longer a guideline or rule. Buyers routinely search wide areas for the type of home they want.

If your submarket is too specific and has too few sales no matter how far and wide you search, then utilize the data from the broader market (include everything) to create a new Market Conditions Table. I would exclude certain types of houses. For example; if your property is non-waterfront or non-water access, then exclude waterfront and water access comps in your search. The larger data dump should at least give you a ballpark idea on the overall trend going back 12 months.

Unless you have a comp from 3 years ago, there is no reason to go back 800 days. That does not populate more sales in each month. It just spreads out more sales over a longer time period. The trend they are looking for is from the past 12 months.

 

[Zoe]

Your MC report lacks data (too few sales to generate a reliable trend). The trend, albeit with too few sales, indicates a decline in your subject's submarket within the past year. Your upward adjustments for market conditions (time) is contradictory to trend indicated in your MC table. Your property, like all others, are part of a more specific submarket within the broader market. If you need to go out more than a mile to find more similar sales within the subject's submarket, then do so. The 1 mile Fannie and Freddie requirement was something from long ago that is no longer a guideline or rule. Buyers routinely search wide areas for the type of home they want.

If your submarket is too specific and has too few sales no matter how far and wide you search, then utilize the data from the broader market (include everything) to create a new Market Conditions Table. I would exclude certain types of houses. For example; if your property is non-waterfront or non-water access, then exclude waterfront and water access comps in your search. The larger data dump should at least give you a ballpark idea on the overall trend going back 12 months.

Unless you have a comp from 3 years ago, there is no reason to go back 800 days. That does not populate more sales in each month. It just spreads out more sales over a longer time period. The trend they are looking for is from the past 12 months.

On complex assignments, the market conditions could be different based on the individual subject property vs closet proximity properties.

 

[Sadie]

I never heard of the 1 miles constraint?

Nor have I.

 

[togatour]

Why are you limiting your search to a mile?

The search on the MC form is for the market area a buyer would consider and where your comps come from - in some cases, it is 3 miles, in other cases, 1/2 mile. If there is a shortage of sales, for analysis purposes, then search a few similar areas ( a map search on MLS can do it ) for enough comps - imo 10 might be light and 100 too many - but any trend should show itself by the listings, pending, DOM, etc.

As far as 800 days back, it can confuse things. The quesion on page one is, are prices IncreasING? Or DeclinING? ( happening now, present tense into the future ) they are not asking to have prices Dedlined or have prices increased ( past tense though the past contract and sale dates are used if we make a time/market condition adjustment to bring the past sale equivalent to current market condtions ) res frames what is happening now for a market condition adjustment, we usually try to use as recent sales as possible, hopefully, that closed within a year )

Good advice here.

Whatever you do going forward, get the "one mile" criteria out of your thinking. Get out your manuals from your first appraisal classes and re-familiarize yourself with the principle of substitution. Would a potential buyer of the property you are appraising stop at 1 mile? Would you? Suppose a very similar neighborhood existed a mile and a half or two miles away, are you saying the a potential buyer would not consider homes here. I do homes very close to State borders where I would effectively be using half of a mile radius using your criteria.

Certain markets I have covered in the city may cover as little as 10 blocks.

Define your market by considering what the market participants are doing. Get to know some experienced RE Agents in the areas you cover and ask questions, lots of questions. Find out what their buyers are considering when they are searching for homes and what they consider comparable. Sounds to me like you are trying real hard to fit the round peg in a square hole and the underwriters are confused.