"Predominant 1-Unit Housing Value"

[George Hatch]

If the GSE form designers could loosen up on their habit of trying stuffing everything on the first 3 pages of their report, there's enough room at the top of what is now pg 2 to fit a summary of the market segment analysis.

 

[alebrewer]

No, everything on page 1 should be all properties. I like to know the range for all homes in neighborhood. What if subject is an outlier?

Incorrect. The One Unit Housing Trends apply specifically to 'comparable' sales per the Guide...

 

[alebrewer]

If the GSE form designers could loosen up on their habit of trying stuffing everything on the first 3 pages of their report, there's enough room at the top of what is now pg 2 to fit a summary of the market segment analysis.



View attachment 48896

Not sure the format of the 'new and improved' forms, but I do know these are going away. It's my understanding that the new forms will contain modules that will either be presented, or hidden, depending on the type of property being appraised. Either way - the 1004 is history...

 

[ZZGAMAZZ]

What are you talking about?

I was referring to your opinion about the use of 10 properties as a reliable indication of market activity. That might be true, although it's been said that appraisals are a blend of art and science, the latter of which typically cites "30" as a meaningful number that can be used as the basis of "significant" results. Ten might work for you but practitioners should rely on standardized protocol as often as possible to establish a body of knowledge shared throughout the industry (although the appraisal industry is like the Wild West). Prolly "much ado about nothing" but food for thought nevertheless.

If the GSE form designers could loosen up on their habit of trying stuffing everything on the first 3 pages of their report, there's enough room at the top of what is now pg 2 to fit a summary of the market segment analysis.



View attachment 48896

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I didn't practice actively from 2007 to 2019, but never understood why the 1004MC was implemented IN ADDITION TO the Page 1 Market Analysis, rather than merging the two sections.

 

[alebrewer]

I didn't practice actively from 2007 to 2019, but never understood why the 1004MC was implemented IN ADDITION TO the Page 1 Market Analysis, rather than merging the two sections.

I think the 1004MC was an attempt by the agencies to get appraisers to actually do some market analysis... a laudable attempt, but unfortunately, never appropriately implemented or adopted...

 

[LuckyDuck]

Hello everyone, newbie here. I just wanted to say thank you all for discussing this issue! Ive been so confused by this topic in particular and this thread was BY FAR the most comprehensive thing I could find. Kudos to you guys, but sort of scary for the rest of us! I wish there was an 'official' doc/cheat sheet that would sum it all up. Since I cant seem to find one, I'll just reiterate what you all have explained and seem to (mostly) agree on. I totally just copied Zzgamazz's post, but switched it around to match the final verdict. IF its wrong, I apologize and please let me know so I can erase it/fix it/stop following it. Anyways, I'll be lurking around these forums for a while so thank you in advance for the additional knowledge!

Thread Summary:

1. Page 1 Neighborhood Characteristics. ALL PROPERTIES
2. Page 1 One-Unit Housing Trends. COMPETING PROPERTIES
3. Page 1 One-Unit Housing. ALL PROPERTIES SPECIFIC PROPERTY TYPE (Single fam., 2-4 unit res., condo, co-op etc.) (Hint: What form are you using?)
4. Page 2 Top-of-Page Comparable data. COMPETING PROPERTIES
5. 1004MC Market Conditions COMPETING PROPERTIES

YAY!
_________________________
NEXT DAY EDIT:

Hi again!
I went down the rabbit hole and found more info which lead me to want to update the list above. The red was the group thread consensus, the green is what I'm leaning towards now (ha, lets see if that lasts), based on another thread from AF and the Fannie Mae selling guide, which I've quoted and provided the specific link to below. Everything else matched the guide 100%.

Fannie Mae​

Selling Guide​

Published December 16, 2020

B4-1.3-03, Neighborhood Section of the Appraisal Report (06/03/2020)​

Price Range and Predominant Price​

"The appraiser must indicate the price range and predominant price of properties in the subject neighborhood. The price range must reflect high and low prevailing prices for one-unit properties, two- to four-unit properties, condo units, or co-op units depending on the property type being appraised and the appraisal form being used. Isolated high and low extremes should be excluded from the range, which means that the predominant price will be that which is the most common or most frequently found in the neighborhood. The appraiser must state the predominant price as a single figure using whole numbers."

B4-1.3-03, Neighborhood Section of the Appraisal Report (06/03/2020)

selling-guide.fanniemae.com

 

[ZZGAMAZZ]

Hello everyone, newbie here. I just wanted to say thank you all for discussing this issue! Ive been so confused by this topic in particular and this thread was BY FAR the most comprehensive thing I could find. Kudos to you guys, but sort of scary for the rest of us! I wish there was an 'official' doc/cheat sheet that would sum it all up. Since I cant seem to find one, I'll just reiterate what you all have explained and seem to (mostly) agree on. I totally just copied Zzgamazz's post, but switched it around to match the final verdict. IF its wrong, I apologize and please let me know so I can erase it/fix it/stop following it. Anyways, I'll be lurking around these forums for a while so thank you in advance for the additional knowledge!

Thread Summary:

1. Page 1 Neighborhood Characteristics. ALL PROPERTIES
2. Page 1 One-Unit Housing Trends. COMPETING PROPERTIES
3. Page 1 One-Unit Housing. ALL PROPERTIES
4. Page 2 Top-of-Page Comparable data. COMPETING PROPERTIES
5. 1004MC Market Conditions COMPETING PROPERTIES

YAY!

IMO your mini-table above reflects the concensus of the Forum although that much give-&-take was required to reach this perspecive reveals considerable confusion throughout the appraisal community; and IMO you will eventually rely upon the AF for much for your appraisal acumen.

 

[J Grant]

----------------------
Oh Oh. A major disconnect exists . . . and whenever I encounter that scenario inevitably I'm wrong. (No denial here.)

Point being is that my understanding is that--although I don't agree with the premise--the "neighborhood" should be comprised only of competing properties rather than the entire 'hood.

[Consequently, my page 1 "neighborhood" data is based upon data reported in the 1004MC, as well as the top of page 2.]

If so, your comments about the disparity of neighborhood improvements--condition notwithstand--does not pertain.

Please advise.

The point of the MC form is it forces the appraiser to show the median and range for the most competitive properties for the subject, as opposed to page one which asks for the neighborhood area sales. Though I agree fannie verbiage is confusing ..but it s explained what they want on page one and what they want to see on the 1004 MC ( or other exhibit)

For example, neighborhood sales range was 290k-800k - explain why ( a wide range of age and size of properties ) median or average on page one neighborhood section is is 500k but your subject OMV is 340k, then explain why the two differ.

" Subject opinion of market value is below the predominant price of $500,000 on page one, because the predominant price represents newer, larger houses. There is marketability and demand for older houses of subject smaller size range, therefore the subject is not an under improvement "

 

[ZZGAMAZZ]

The point of the MC form is it forces the appraiser to show the median and range for the most competitive properties for the subject, as opposed to page one which asks for the neighborhood area sales. Though I agree fannie verbiage is confusing ..but it s explained what they want on page one and what they want to see on the 1004 MC ( or other exhibit)

For example, neighborhood sales range was 290k-800k - explain why ( a wide range of age and size of properties ) median or average on page one neighborhood section is is 500k but your subject OMV is 340k, then explain why the two differ.

" Subject opinion of market value is below the predominant price of $500,000 on page one, because the predominant price represents newer, larger houses. There is marketability and demand for older houses of subject smaller size range, therefore the subject is not an under improvement "

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I hated the thought of the 1004MC forever but now that the results are calculated and the form populated electronically (by Spark For Apprasers based on my selection of competing properties) I find that it's a great tool to enhance my understanding of the market dynamics . . . and one can't very well indicate that the local market is "increasing," for example, if the 1004MC doesn't reflect that status (although I don't support the protocol that relies on data at the end of each of the three periods as the basis of the results, rather than a protocol that more accurately depicts the market standard during each period...).

 

[J Grant]

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I hated the thought of the 1004MC forever but now that the results are calculated and the form populated electronically (by Spark For Apprasers based on my selection of competing properties) I find that it's a great tool to enhance my understanding of the market dynamics . . . and one can't very well indicate that the local market is "increasing," for example, if the 1004MC doesn't reflect that status (although I don't support the protocol that relies on data at the end of each of the three periods as the basis of the results, rather than a protocol that more accurately depicts the market standard during each period...).

The problem with programs electronically populating is did the appraiser or understand it ?

The point of the MC form is provide a way for appraiser to analyze and understand, for themselves and then to explain to client/users, any differences, between the way the smaller group of property comps most competitive to the subject might preform vs the larger, more generic market and neighborhood.