Neighborhood Info Section

[elindsey]

Hello,

I am new to this forum and new to appraisals.
I have a question that you might can help with. Regarding neighborhood information, how do YOU come up with this? I have top to several different appraisers and gotten several different answers. I was originally taught that this should come from MC report and pool of comparable properties. However, I had another guy to say " to read this section closely, it doesn't say neighborhood values that sold within a year", "just because it isn't in the comparable pool, doesn't mean that it is not in the neighborhood". "Just because a property hasn't sold in 5-10,15, or 20 years...doesn't mean that it isn't part of the neighborhood." When I mentioned this to guy one, he said that he doesn't get paid enough to do that over a 10 year period, for example...that we perform only a summary report. Guy 2 uses blanket values like 0-200, for age. He uses blanket numbers for price. (1-300) for example of neighborhood price range. I have been looking at 4150 for answers, but I didn't really see anything on it. What is your take on this?

Do you have any other courses that you recommend? I figure that since no one has the time to invest in me, I will just have to invest in myself.

All comments are welcome. Thanks

 

[Terrel L. Shields]

I have been looking at 4150 for answers, but I didn't really see anything on it

you mean 4150.2? Like in FHA? Superseded by 4000.1.

The MC form is badly flawed. There are many instances where the defined neighborhood has insufficient sales to make any determination of much of anything. So many appraisers expand that "market area" to a much greater area so to garner sufficient sales to be statistically significant. It is another idiot box created by Fannie Mae and why some, like myself, quit doing secondary market. The MC form provides nothing for anyone except when you have so much data that the answer is intuitive anyway.

The "neighborhood" and the "market area" are two different things. And often in areas of sparse sales, sales may come from areas that are similar but not even in the same "market area". I think that comment would apply to virtually every town of under 15,000 population. Very few "neighborhoods" per town and a "market area" that might cover several towns when they are small and proximate.

 

[RSW]

That about sums it up!

 

[bnmappraisal]

Guy 2 uses blanket values like 0-200, for age. He uses blanket numbers for price. (1-300) for example of neighborhood price range.

This sounds like a Skippy

 

[bnmappraisal]

Regarding neighborhood information, how do YOU come up with this?

I'm in a mostly urban/suburban location, so my assignments deal with said type properties. I generally search back about 1 yr and then another search of 6 months regarding "low, high, predominant" sales ranges.
I agree with this guy, though:

I had another guy to say " to read this section closely, it doesn't say neighborhood values that sold within a year", "just because it isn't in the comparable pool, doesn't mean that it is not in the neighborhood".

 

[Deleted member 128537]

The 1004MC is a confusing mess, and as a rural appraiser should be one form that is eliminated. So when I describe the neighborhood I largely ignore it. Otherwise the report would be misleading.

 

[444nutman]

http://www.aciweb.com/1004mc-revisi...edominant-price-and-age-rangepredominant-age/
The author of this is a poster on the forum.
The neighborhood is all homes in the boundaries.
The MC form is comparables only. Some neighborhoods lets say have homes that range being built from 1900 to new, then that would be reflected on page 1. If the subject was built in 1990 then the MC search would be for example all homes built between 1980 to 2000.
I state in my report all values on page 1 is based on the last year. My MLS purges data every 10 years. The market in 2006 in totally different from todays market, so why include values from 2006 on page 1. Heck in some of my markets, 6 months ago is a different market.

 

[Evincere]

Hello,

I am new to this forum and new to appraisals.
I have a question that you might can help with. Regarding neighborhood information, how do YOU come up with this? I have top to several different appraisers and gotten several different answers. I was originally taught that this should come from MC report and pool of comparable properties. However, I had another guy to say " to read this section closely, it doesn't say neighborhood values that sold within a year", "just because it isn't in the comparable pool, doesn't mean that it is not in the neighborhood". "Just because a property hasn't sold in 5-10,15, or 20 years...doesn't mean that it isn't part of the neighborhood." When I mentioned this to guy one, he said that he doesn't get paid enough to do that over a 10 year period, for example...that we perform only a summary report. Guy 2 uses blanket values like 0-200, for age. He uses blanket numbers for price. (1-300) for example of neighborhood price range. I have been looking at 4150 for answers, but I didn't really see anything on it. What is your take on this?

Do you have any other courses that you recommend? I figure that since no one has the time to invest in me, I will just have to invest in myself.

All comments are welcome. Thanks

Do you do Appraisals?

 

[Tom D]

the 1004mc may only be a subset of a neighborhood. the neighborhood may only be a subset of a marketing area. that's different from page 1 info.

the subject neighborhood lacking sufficient sales may find the buyer looking for a potential substitute in the subject's marketing area. in my urban area the 1004mc is a subset of the neighborhood maybe encompassing a radius of several street blocks. i don't know how rural appraiser function with those issues.

on page 1 with FHA the ranges are from the neighborhood. with fannie a subset of similar homes, that's been discussed here frequently. you can only prove the numbers that have actually happened. i go back 1 year at most.

 

[Meandering]

Hello,

I am new to this forum and new to appraisals.
I have a question that you might can help with. Regarding neighborhood information, how do YOU come up with this? I have top to several different appraisers and gotten several different answers. I was originally taught that this should come from MC report and pool of comparable properties. However, I had another guy to say " to read this section closely, it doesn't say neighborhood values that sold within a year", "just because it isn't in the comparable pool, doesn't mean that it is not in the neighborhood". "Just because a property hasn't sold in 5-10,15, or 20 years...doesn't mean that it isn't part of the neighborhood." When I mentioned this to guy one, he said that he doesn't get paid enough to do that over a 10 year period, for example...that we perform only a summary report. Guy 2 uses blanket values like 0-200, for age. He uses blanket numbers for price. (1-300) for example of neighborhood price range. I have been looking at 4150 for answers, but I didn't really see anything on it. What is your take on this?

Do you have any other courses that you recommend? I figure that since no one has the time to invest in me, I will just have to invest in myself.

All comments are welcome. Thanks

Fannie Mae Selling Guide
Published July 26, 2016
has not changed since
(09/30/2014)

B4-1.3-03: Neighborhood Section of the Appraisal Report
https://www.fanniemae.com/content/guide/selling/b4/1.3/03.html

Trend of Property Values Supply of Properties in the Subject Neighborhood Marketing Time for Properties

The appraiser’s analysis of a property must take into consideration all factors that affect value. Because Fannie Mae purchases mortgages in all markets, this is particularly important for neighborhoods that are experiencing significant fluctuations in property values including sub-markets for particular types of housing within the neighborhood. Therefore, lenders must confirm that the appraiser analyzes listings and contract sales as well as closed or settled sales, and uses the most recent and similar sales available as part of the sales comparison approach, with particular attention to sales or financing concessions in neighborhoods that are experiencing either declining property values, an over-supply of properties, or marketing times over six months. The appraiser must provide his or her conclusions for the reasons a neighborhood is experiencing declining property values, an over-supply of properties, or marketing times over six months.

When completing the One-Unit Housing Trends portion of the Neighborhood section of the appraisal report forms, the trends must be reflective of those properties deemed to be competitive to the property being appraised. If the neighborhood contains properties that are truly competitive (that is, market participants make no distinction between the properties), then all the properties within the neighborhood would be reflected in the One-Unit Housing Trends section. However, when a segmented or bifurcated market is present, the One-Unit Housing Trends portion must reflect those properties from the same segment of the market as the property being appraised. This ensures that the analysis being performed is based on competitive properties. For example, if the neighborhood contains a mix of property types not considered competitive by market participants, then a segmented or bifurcated market is present. Additionally, the conclusions reported in this portion of the appraisal will be supported by the analysis contained in the Market Conditions Addendum to the Appraisal Report (Form 1004MC). The appraiser should also provide commentary on the other segment(s) of the neighborhood when segmentation is present.


.