One-unit Housing Trends In Neighborhood Section

[The Bob]

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. Market Conditions Addendum to the Appraisal Report (Form 1004M

Section addresssing Neighborhood starts on page 581

https://www.fanniemae.com/content/guide/sel093014.pdf

Link does not work, can you re-post or redirect me to the source, Thanks

Try this, starts on page 581

https://www.fanniemae.com/content/guide/sel093014.pdf

 

[Deleted member 134708]

Only thing I know is my reports are intended for ABC Bank, where they go after that is not of my concern. I follow the pre-printed instructions and state exactly what data is where.

 

[TRESinc]

"The above information is based upon a search of "Comparable" LISTINGS (i.e. Active, Pending, Sold, Cancelled, Expired, and Withdrawn) specific to the subject property within the subjects Neighborhood/Market Area as reported by the local MLS. The conclusions in the Neighborhood section of the 1004 are based upon a search of all SALES of ALL one unit residential property types within the subjects Neighborhood/Market Area. As such the trends indicated can be different. ":

i would not put that statement in my report. you are telling the reader you took the easy way out and let the MLS calculate the data for you and that you are excluding any non-MLS sales. just because a property did not sell via the MLS/realtor does not mean it should be excluded from your market data on the 1004MC.

 

[Rich Heyn]

Thanks Richard! Can you point me to where specifically in the FNMA selling guide or other publications where it spells out "The One-Unit Housing Trends are Submarket specific. That is, they apply only to neighborhood properties that are comparable to the subject." It is confusing that the form says "One-Unit Housing Trends" and not "Comparable One-Unit Housing Trends". The 1004MC does use the word "Comparables" through out the form.

The underlined items in the blog are hot links to the versions of the selling guide.

 

[Rich Heyn]

Also is it possible to report the Predominant Price in the One-Unit Housing section as a range when using UAD format? My software (ACI) does not appear to.

I believe Fannie Mae wants a single number in that field.

 

[Frederick R. Ruffell]

i would not put that statement in my report. you are telling the reader you took the easy way out and let the MLS calculate the data for you and that you are excluding any non-MLS sales. just because a property did not sell via the MLS/realtor does not mean it should be excluded from your market data on the 1004MC.

Not so. Here in San Diego it is VERY questionable that a property not listed on the MLS was exposed to an Open Market. Therefore not an arms length transaction nor meeting the definition of Market Value.

 

[Frederick R. Ruffell]

I believe Fannie Mae wants a single number in that field.

Rich, in that BLOG article you quote FNMA as "...The appraiser may state the predominant price as a single figure or as a range, if more appropriate." form the September 30th 2014 Selling Guide.
Is this no longer their stance?

 

[Frederick R. Ruffell]

I personally state in my reports the 1004 pre-printed language conflicts with Fannie selling guide and Fannie FAQ. I state page 1 is all 1 unit housing trends. 1004mc is comparables only. I state to not mislead reader of report, report directions followed since that's what they are reading and I know 100% they have in front of them at the time.

I sleep just fine at night doing it this way as it's fully explained why.

Change page 1 to say "comparables trends" and problem solved.

Hey Nottrav,
after reading the Appraisal and Property Related Frequently Asked Questions (FAQs), February 12, 2016, #16 & #17, I think I am going to start using the same trends in the One-Unit Housing Trends section of the 1004, 2055, and condo forms.
There is guidance from FNMA that is published and we as appraisers have to use and abide by it. Take a look at it and let me know your thoughts.

https://www.fanniemae.com/content/FAQ/appraisal-property-report-faqs.pdf

cut and paste above into your browser

 

[Deleted member 134708]

Well aware what Fannie Mae says. Not concerned.

I couldn't care less how an appraiser does it, as long as explained within the report. I state I follow the 1004 instructions and not FNMA. I state why, what, who, where data is.

Or if I wanted to follow FNMA,

I'd state I DID NOT follow the 1004 forms instructions but followed FNMA instead.

Either way fine by me as you explained to the reader. You could do a 4 unit complex on a 1004 for all I care, just explain.

 

[gregb]

Well aware what Fannie Mae says. Not concerned.

I couldn't care less how an appraiser does it, as long as explained within the report. I state I follow the 1004 instructions and not FNMA. I state why, what, who, where data is.

Or if I wanted to follow FNMA,

I'd state I DID NOT follow the 1004 forms instructions but followed FNMA instead.

Either way fine by me as you explained to the reader. You could do a 4 unit complex on a 1004 for all I care, just explain.

Would you care if you saw a 5 unit apartment completed on a 1004?