Sunshine in VA
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Neighborhood vs. Market area
- Thread starter Doug Wegener
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residentialguy
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Page 1 is not for comparables....as I'm sure you know. So, if there are no sales of any kind there in the neighborhood, it is what it is. Now, that does not mean you stop there. I would add in other market areas to get a meaningful report.
Terrel L. Shields
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Had it described once as the neighborhood is where I would let my kid go ride his bike. The Market area is where I get my comps from.
But OTOH, a neighborhood in a small town is likely going to include the parks, schools, and even small downtown areas. As a rural appraiser, I try to stay in the small town school district, but sometimes a dwelling is unique enough that I look in several nearby town school districts to find comps...and adjust as required...usually minimal or none.
It's a choice
OTOH, a "market area" for a poultry farm is pretty much wherever the chicken company has farms and that is an area that stretches from near Springfield, MO to Miami, OK and down to Tahlequah, and over to Green Forest, AR and back north to Springfield....roughly 80 miles x 50 miles.
But OTOH, a neighborhood in a small town is likely going to include the parks, schools, and even small downtown areas. As a rural appraiser, I try to stay in the small town school district, but sometimes a dwelling is unique enough that I look in several nearby town school districts to find comps...and adjust as required...usually minimal or none.
It's a choice
OTOH, a "market area" for a poultry farm is pretty much wherever the chicken company has farms and that is an area that stretches from near Springfield, MO to Miami, OK and down to Tahlequah, and over to Green Forest, AR and back north to Springfield....roughly 80 miles x 50 miles.
VolcanoLvr
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This discussion points out why the current GSE forms are not well suited to residential appraising, when the assignment is to evaluate and estimate (actually opine) value for the subject by using 'substitute' properties that directly compete with the subject being appraised, and are relatively close by.
The GSE forms are OK for urban areas .... much less so for suburban and rural assignments where land uses are much less homogeneous.
Plus, the terminology on the 1004 and the MC bounce back and forth, meaning they are inconsistent with the actual intent of the assignment.
While the OP's question relates to form page 1, my comment on the MC form relates to it:
Reported trends on this 1004MC Form and for the Neighborhood section on Page 1 of the major report form are analyzed from similar-to-subject comparable properties within the defined neighborhood, and/or from competing neighborhoods in the nearby market area if travel outside the immediate neighborhood was necessary. Since some appraiser-defined neighborhoods often contain a mix of properties that may not be comparatively similar to the subject, the trends of those neighborhood area dissimilar properties are not deemed directly relevant to the subject's appraisal assignment.
The GSE forms are OK for urban areas .... much less so for suburban and rural assignments where land uses are much less homogeneous.
Plus, the terminology on the 1004 and the MC bounce back and forth, meaning they are inconsistent with the actual intent of the assignment.
While the OP's question relates to form page 1, my comment on the MC form relates to it:
Reported trends on this 1004MC Form and for the Neighborhood section on Page 1 of the major report form are analyzed from similar-to-subject comparable properties within the defined neighborhood, and/or from competing neighborhoods in the nearby market area if travel outside the immediate neighborhood was necessary. Since some appraiser-defined neighborhoods often contain a mix of properties that may not be comparatively similar to the subject, the trends of those neighborhood area dissimilar properties are not deemed directly relevant to the subject's appraisal assignment.
residentialguy
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That's just wrong. I'm not going to have some instructions on a POS MC form dictate what is going on my 1004 form when the 1004 says something completely different. They can't make me produce a misleading report...and please people, don't spew that crap about "FNMA is the intended user and doing any other way than instructed would be misleading" That's like going thru a divorce and the wife instructs you to write 100% of everything goes to her because she handed you a note saying that even though you write 100%...it really means 50%. Honest.
:new_all_coholic:
VolcanoLvr
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Wrong...really?!
"analyzed from similar-to-subject comparable properties within the defined neighborhood"
What's wrong about that, and saying so?
After all, if we are appraising the 1,200 s/f ranch, 3 br 1Ba, why should any appraiser even mention any other properties in the so called 'neighborhood' that don't compete with this? Who cares about the condos, or the larger or much smaller homes nearby, or properties on an acre when the subject is on a .1 acre subdivision lot?
And by the way....the POS 1004 does not 'say' anything. Other than the words Characteristics, Boundary and Description. There are no mandated definitions as to what 'Neighborhood' really means on that form - thus appraisers all across the country have different viewpoints as to what it means.
Then the MC comes along and the GSE mix and match and mess up their intention, until one gets to the last part of their 'instruction comments' where they finally say that POS form applies to COMPARABLES only .... those properties that 'compete with' the subject.
So fine mama and papa GSE....if that's the kind of analysis you want, then my ENTIRE report will be built around that concept. To heck with the heterogeneous properties in the 'neighborhood' that don't directly compete with the appraised property. Been doing it this way since 2011 (remember what happened then?) and no one has peeped or ****ed about this methodology.
"analyzed from similar-to-subject comparable properties within the defined neighborhood"
What's wrong about that, and saying so?
After all, if we are appraising the 1,200 s/f ranch, 3 br 1Ba, why should any appraiser even mention any other properties in the so called 'neighborhood' that don't compete with this? Who cares about the condos, or the larger or much smaller homes nearby, or properties on an acre when the subject is on a .1 acre subdivision lot?
And by the way....the POS 1004 does not 'say' anything. Other than the words Characteristics, Boundary and Description. There are no mandated definitions as to what 'Neighborhood' really means on that form - thus appraisers all across the country have different viewpoints as to what it means.
Then the MC comes along and the GSE mix and match and mess up their intention, until one gets to the last part of their 'instruction comments' where they finally say that POS form applies to COMPARABLES only .... those properties that 'compete with' the subject.
So fine mama and papa GSE....if that's the kind of analysis you want, then my ENTIRE report will be built around that concept. To heck with the heterogeneous properties in the 'neighborhood' that don't directly compete with the appraised property. Been doing it this way since 2011 (remember what happened then?) and no one has peeped or ****ed about this methodology.
residentialguy
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Yes, wrong. The form says "One Unit Housing Trends" homes ...or "2-4 unit Housing trends", not comps. This is "NEIGHBORHOOD ANALYSIS" Why show the neighborhood?, you ask... Have you heard of Progression/Regression....or "Gentrification"???? What's going on in the neighborhood can play a huge factor in value of it's sub-markets. We already have a full analysis on the 1004MC. Why would you repeat the same analysis???
Would you put another value in the Market Value box if the 1004Mc said to put another value there??? Good luck to you if you answer yes.
To put any other answer than what the form asks for is misleading. If FNMA wants different information on the form, they'll need to change the form. They've already changed it...they could have changed it to say comps, but they didn't. Pg 1 and the 1004MC asks for 2 different analyses...and that's what they're going to get. I guess they'll have to sue me for giving them too much information.
Would you put another value in the Market Value box if the 1004Mc said to put another value there??? Good luck to you if you answer yes.
To put any other answer than what the form asks for is misleading. If FNMA wants different information on the form, they'll need to change the form. They've already changed it...they could have changed it to say comps, but they didn't. Pg 1 and the 1004MC asks for 2 different analyses...and that's what they're going to get. I guess they'll have to sue me for giving them too much information.
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