Difference Between Neighborhood Section/1004mc

[Terrel L. Shields]

I love forms that make liars out of yourself.

 

[Deleted member 134708]

This is what I put in my 1004MC comment section long ago.

"Fannie Mae selling guide part B4-1.3-03 and appraisal FAQ (09/2014) conflict with the language in the neighborhood section and this form. As to not mislead the client/reader of this report, the language and instructions of this report have been followed. The neighborhood section of the appraisal report contains information specific to all sales and listings within the subject's market area. The data on this form is specific to comparable properties in the subject's market area.

The data on this form is taken by specifying the market area as described in the neighborhood section of the 1004, neighborhood boundaries. Limitations are input to pull only comparable sales. The data is exported into an excel spreadsheet where it is sorted into the required time periods based on the effective date. Comparable sales are defined as xxxxxxxxxxxx"

90% of time trend matches but when it doesn't, above is the answer.

 

[Vivian Koester]

"1004MC FAQ MAY 2015
See Qs 16 & 17

Q16. What type of properties are to be analyzed for the data reported in the One-Unit Housing Trends portion of the Neighborhood section of the appraisal report form?
The data regarding trends to be reported in the One-Unit Housing Trends section must be
reflective of those properties deemed to be competitive to the property being appraised.
Additional commentary should be provided on the other segment(s) of the neighborhood when segmentation is present to aid in understanding the overall neighborhood dynamics.

Q17.Are the trends that are reported on the Market Conditions Addendum to the Appraisal Report (Form 1004MC) the same trends that are to be reported in the One-Unit Housing Trends section of the appraisal report (Form 1004)?
Yes.
The conclusions regarding trends that are obtained from the Form 1004MC must be the same trends reported in the Neighborhood trends section of the Form 1004.

The information reported on both forms must be consistent to provide the lender with a clear and accurate understanding of the market trends and conditions present in the subject neighborhood,
based on properties that are considered competitive with the subject being appraised."
.
https://www.fanniemae.com/content/FAQ/appraisal-property-report-faqs.pdf

The way I interpret this is....Property values (increasing, stable or declining) and demand/supply (shortage, in balance, over supply and marketing time (under 3 months, 3-6 months, over 6 months) should match the trend boxes checked on the MC form, but the predominant value age and land use do NOT have to match the MC.

 

[Mike Kennedy]

The way I interpret this is....Property values (increasing, stable or declining) and demand/supply (shortage, in balance, over supply and marketing time (under 3 months, 3-6 months, over 6 months) should match the trend boxes checked on the MC form, but the predominant value age and land use do NOT have to match the MC.

Suggest re-reading the FAQ.

 

[Mike Garrett RAA]

I still contend page 1 data is not comparable specific and, therefore, may be different than that found at the top of page 2 and the 1004mc sheet. I have a comment on my mc page that states that and it hasn't been a problem...so far.

So, here is a question for you experts. What do you do when there are no comparable listings? Is it better to expand the search area? Is it better to go back further in time? Is it alright to just say..."no comparable listings or offerings found"?.

Quite honestly I believe the powers to be are more concerned with a perfect appraisal report rather than an opinion of value.

 

[Vermonter]

I still contend page 1 data is not comparable specific and, therefore, may be different than that found at the top of page 2 and the 1004mc sheet. I have a comment on my mc page that states that and it hasn't been a problem...so far.

So, here is a question for you experts. What do you do when there are no comparable listings? Is it better to expand the search area? Is it better to go back further in time? Is it alright to just say..."no comparable listings or offerings found"?.

Quite honestly I believe the powers to be are more concerned with a perfect appraisal report rather than an opinion of value.

Exactly.

FAQ suggestion- "If my 1004MC is all zeros (which happens quite often), what do I put on page 1?"

 

[Peter LeQuire]

Fannie can direct that the forms be completed any way they want them completed. What Fannie cannot do is direct an appraiser to do something that is - on its face - misleading. If there is not enough data to compete the trends portion of the MC addendum I don't indicate trends. I provide my search parameters on the MC addendum: there are (for the most part) the same parameters I used in my comp search for the SC approach. For the one-unit housing trends of the URAR, I re-search the neighborhood, without regard for the characteristics used for my search for comparable properties, and describe what I've done on my comments in the market condition section of the report: I actually prepare a MC addendum for my work file.

Do any of you, when confronted with a lack of comparable listings information, put more than one MC addendum into the client's report, and if so, how do you identify it?

 

[DWiley]

If there are no comparable listngs (or sales) in the subject neighborhood, then one should report 0. I have done reports where there no sales or listings of comparable homes in the neighborhood in the past year. Not all that uncommon in rural areas. In fact, reporting this factual information serves to reinforce the need to use sales that are older, farrher, etc. in the comparison approach, so one section of the report helps support another.

About 70% to 80% of my reports had data in addition to the 1004MC data grid. I used market analysis software to generate graphs whatever relevant info I needed to include.

 

[Peter LeQuire]

If there are no comparable listngs (or sales) in the subject neighborhood, then one should report 0. I have done reports where there no sales or listings of comparable homes in the neighborhood in the past year. Not all that uncommon in rural areas. In fact, reporting this factual information serves to reinforce the need to use sales that are older, farrher, etc. in the comparison approach, so one section of the report helps support another.

About 70% to 80% of my reports had data in addition to the 1004MC data grid. I used market analysis software to generate graphs whatever relevant info I needed to include.

I report the number of listings/sales, but, if there is not enough data, I don't check the trends boxes. But whether there is enough neighborhood comparable information or not, I generally discuss trends of all SF properties in some area larger than the neighborhood, the object being to see (and report) how consistent the comparables' trends with the broader area, be it town, city or county.

 

[DWiley]

As one has to indicate trends on page 1, I always indicate trends in the 1004MC data grid. However, the trends may be based on data other than the data in the 1004MC data grid (if the grid data is very limited).

As I have said many times, the data grid is only PART of the 1004MC form.