New proposed Fannie Mae form

[Ray Christ]

New proposed Freddie mac form

Last week I posted a thread asking about a new Fannie Mae form. Since then I have come upon the proposed new form, but it is not Fannie, but rather Freddie. It came from an instructor at a AI class one of my appraisers attended. FYI the draft rule change(s) and draft form are attached.

Looks a lot like the RELS "Market Condition Summary" form.

 

[Randolph Kinney]

Thanks for the heads up.

 

[Rufus]

Good idea but they are making the same mistake they did at the top of page two on the 1004. Take the word comparable out! That way the information will give a good overview of what is really going on in the subject neighborhood. Because of the word comparable, the skippies will just select those sales and listings that support what they chose to report.

 

[CANative]

Crimony! More stupid form crap because of a bunch of lazy-formfilling-knownothing-amateur-skippy appraiser sh!theads.

I already do all that stuff but now I have to spend another hour of filling out a stupid form that won't work for rural areas anyway.

My fees are going up at least $100.

 

[Marcia Langley]

Good idea but they are making the same mistake they did at the top of page two on the 1004. Take the word comparable out!

Rufus,

I agree. The admonitions regarding the size of the neighborhood and the intent of the word 'comparable' are just as vague as they ever were. There remains the burden on the appraiser to define it for themselves and explain it in the report. This form is no help in clarifying those points.

I noticed at the bottom of the form that it will also be a Fannie Mae form.

IMO the biggest mistake in this form is lumping pending listings in with closed sales. This assumes the contract prices are known, otherwise the trending check boxes on that line will be greatly distorted by the list prices. I'll have to caveat all of my reports to see the market trending comments in the addendum because there is no way to depict even a good part of it in this form without lengthy explanations.

In other words, I'll still have to do what I've always done in the addendum and on top of that explain why that analysis is not reduceable to an accurate representation in the form.

The good news is that they acknowledge that some data will not be available in all markets. That's fair and easily explained.

The bad news is that skippies will arbitrarily run MLS reports and report that data without correcting flaws and reviewers will see that as some of the best reporting. Because commerce loves a computer printout and loves to take it as gospel and more professional.

Frankly, I think the concept of more room in the "form" for market discussions is a good one. But once again, the stated goal may not be achieved because the quality control will be based on check boxes and flawed databases.

 

[Rufus]

IMO the biggest mistake in this form is lumping pending listings in with closed sales. This assumes the contract prices are known, otherwise the trending check boxes on that line will be greatly distorted by the list prices.

Marcia,

Perhaps I am overlooking it, but the only place I see the sales and pendings together is in the Inventory Analysis section. They want the number of sales + pendings.

In the section below that, under the bold black divider, they do not mention pendings. It asks for median sales price and then median list price.

 

[Marcia Langley]

Rufus,

I see your point.

I guess I was ***-u-me-ing the term "comparable sale" to have been defined in the inventory grid and automatically carried through to the price grid. My mistake.

Even so, then, the inventory grid would, at least, be distorted because the quirks of my market have caused an unusually high number of pendings to fall through.

 

[Rufus]

Even so, then, the inventory grid would, at least, be distorted because the quirks of my market have caused an unusually high number of pendings to fall through.

Marcia,

I do agree with you on that. It's counting the chickens before they hatch. In my own, lengthy, market analysis I mention the number of pendings but do not use them in my calculation for absorbtion rate.

 

[CURT VAN HOOSER]

Marcia,

I do agree with you on that. It's counting the chickens before they hatch. In my own, lengthy, market analysis I mention the number of pendings but do not use them in my calculation for absorbtion rate.

Why? Not a challenge...just trying to understand... Thanks!

 

[Rufus]

Why? Not a challenge...just trying to understand... Thanks!

Call it a challenge it you want. :laugh: That's actually acceptable in debates.

Two reasons.

One, as mentioned first by Marcia, they may or may not actually happen.

Two, it skews the data when comparing to the same time frame in previous years. In other words it can make it appear that there were suddenly more recent 'sales' than there actually is. If you appraise in the same neighborhood next year, your analysis would show a different number of 'sales'.

I've done a great many retrospective reviews (yes, I know they all are but I'm using the term to mean years not days) and my method let's a potential review appraiser come up with the same numbers I did.

Those pendings are merely that, pending. They will be counted as solds when they are actually closed.