Is The 1004mc Really All That Important?

[J Grant]

The trend conclusion is not limited to the tiny amount of sales on the MC form when there are limited comps/sales, the trend conclusion is to come fron analsis of subject market and comp influences, which if you can't provide that, how can you appraise the subject? Provide the immediate to subject analysis augmenting your knowledge of the area and activity to supplement the scarce data, that is what you do to develop an opinion . Augment it with comments on larger overall market and how subject market immediate comps and recent past months/year activity follows or differs from overall/larger market.

 

[The Bob]

Yes, but oftentimes the 1004MC is statistically meaningless, where an analysis of all properties in the neighborhood gives better trending information. I can cherry pick info to make the 1004MC say anything that i want, but pulling all residential sales in a given neighborhood is just that. So I do a market analysis on the first page and it is different from the 1004MC, 146 sales over the past year paints a better picture regarding market trends than 12 similar sales over the past year. I analyze both, I put both in the report. The user can read it and make any necessary determinations from the data. If I'm doing it wrong, then so be it.

Could not agree more. The last few 1004mc's I've filled out have "N/A" in over half the spaces. Every single 1004MC I've done has a paragraph about the broader market used to supplement what little data there is on true comparables. But that doesn't change the fact that the 1004MC should match page 1, whether you have enough comparable data or you had to use supplemental data.

 

[Restrain]

I was there when it was designed. It was created for REO work, to help the REO dept in evaluating the competing market. Then someone got it in their heads in Washington to incorporate it into all appraisals.

In regards to Q17...that ain't necessarily so. Wife got into it over this same issue. Overall market was increasing, but average home was 1700 SF. Subject was a custom 5000 SF home in an enclave. Inventory level was over 1.5 years based on absorption rate vs 4 months for the average home. She showed that for the submarket for the subject, the MC showed a 'Stable' market whereas the overall neighborhood was 'Increasing'. Both were correct, and the appraisal discussed this issue. They finally agreed.

 

[bnmappraisal]

the MC showed a 'Stable' market whereas the overall neighborhood was 'Increasing'. Both were correct, and the appraisal discussed this issue. They finally agreed.

(my bold) ... key word being FINALLY.
BTW, I appreciate your insight Restrain, regarding the history of the MC form. I didn't know all that