Properties used to Complete Form 1004MC

[Webbed Feet]

Jacob:

You know that's bad advice! The appraiser cannot talk to him as he was not the client.

That is correct. However, USPAP does not prohibit LISTENING.....

 

[Webbed Feet]

Tends, not market extraction for adjustments.

I'll let my comments go at this gang. The 1004MC is not a "Market Condition (time) Adjustment" extraction form. That was never it's purpose. It is a trend reporting form only, and so is all the data on it is to be for, used only to report trends as far as the form is concerned.

 

[Doug Meyer]

Web is correct it is a reporting form. Appraisers usually utilize other data in order to determine the market condition (time) adjustment.

Also, most underwriters and lenders are also confused about the 1004MC form as are many appraisers. Good luck.

 

[AndrewBiz]

AndrewBiz - please understand that we are located all around the United States with varying markets and sales.

Also understand that each and every appraiser has been trained by someone else - whether each of us is trained correctly is the question. Some appraisers have no idea how to perform a market analysis, hence, the 1004MC form - an attempt to have the appraiser provide more than just a few words like "stable market values" or "declines noted."

Each report should contain enough analysis and summary to allow the reader of the report to come to the same conclusion, however, each report is typically prepared for a lender whose use of the report, and understanding of the report, may be different than that of the casual reader.

Your concerns appear to raise red flags, however, there is only one way to deal with this. You need to discuss your issues with the lender. You can ask for another appraisal or review of the original.

If your lender refuses to comply, hire your own appraiser then discuss with your lender the results of that report. Remember, though, that an appraisal performed for a homeowner typically cannot be utilized in a lending transaction.

Good luck to you.

Mary - Thank you for your comments. As you have suggested I plan on taking it up with the lender and if I need to further validate my position I will hire an appraiser.

 

[RSW]

AndrewBiz,

I tend to agree with you that the data set may not have been filtered or scrubbed correctly (as we like to call it in the appraisal business). I most likely would not have used the three sales that you mentioned. As you said in your OP, "garbage in, garbage out!" The results of the 1004mc can be manipulated in a positive or a negative direction depending on the data set used. I would recommend you send all of your information to your lender and request them to send it to the appraiser for clarification. I would then wait and see if he/she responds to the lender's request before I sent a complaint to the State Board.

 

[AndrewBiz]

AndrewBiz,

I tend to agree with you that the data set may not have been filtered or scrubbed correctly (as we like to call it in the appraisal business). I most likely would not have used the three sales that you mentioned. As you said in your OP, "garbage in, garbage out!" The results of the 1004mc can be manipulated in a positive or a negative direction depending on the data set used. I would recommend you send all of your information to your lender and request them to send it to the appraiser for clarification. I would then wait and see if he/she responds to the lender's request before I sent a complaint to the State Board.

Thanks for your opinion. I plan on taking up the issue with the lender.

Thank you.

 

[DWiley]

The 1004MC is not a "Market Condition (time) Adjustment" extraction form. That was never it's purpose.

Too many appraisers are misusing the grid at the top of the 1004MC. Many are expanding search parameters in order to have enough pieces of data to draw some kind of trend conclusions form the grid at the top of the 1004MC and avoid having to provide supplemental data.

Assuming the information provided by AB is correct, I have two initial impressions:

1. It appears that the MC grid was not completed using appropriate data. The homes used range in size from 1,144 square feet to 4,100 square feet, and the prices range from $255K to $810K. It is difficult to imagine that these homes would all be competitive with any subject property.

2. For the last two time periods there is limited data. It may be too limited for trend analysis. If my data set of competing properties contained only 3 or 4 pieces of data for the last two time frames then I would supplement the grid with analysis of a broader data set.

 

[The Bob]

Too many appraisers are misusing the grid at the top of the 1004MC. Many are expanding search parameters in order to have enough pieces of data to draw some kind of trend conclusions form the grid at the top of the 1004MC and avoid having to provide supplemental data.

Assuming the information provided by AB is correct, I have two initial impressions:

1. It appears that the MC grid was not completed using appropriate data. The homes used range in size from 1,144 square feet to 4,100 square feet, and the prices range from $255K to $810K. It is difficult to imagine that these homes would all be competitive with any subject property.

2. For the last two time periods there is limited data. It may be too limited for trend analysis. If my data set of competing properties contained only 3 or 4 pieces of data for the last two time frames then I would supplement the grid with analysis of a broader data set.

What "broader data set" would you have used?

 

[DWiley]

What "broader data set" would you have used?

Since I don't work in the the area of the subject property, I cannot answer specifically. However, I can give an example of what I did in a local situtaion.

I appraised a home in a golf course community in the Middle Tennessee city of Murfreesboro. I first analyzed sales of similar homes in that golf course community and used that data to complete the grid on the top of the 1004MC. However, there were only 3 or 4 sales per time period, which I didn't think was sufficient for trend analysis. So, as Fannie has directed, I analyzed broader data sets to supplement the 1004MC grid.

I analyzed the trends for all homes (not just similar homes) in the development, trends for similar homes within 2 miles, and trends for similar homes in the entire zip code. All data sets shows price declines of 6% to 8%, so I had relatively strong support for the market condition adjustment that I applied.

In the report I included graphs showing trends for these data sets. Using the SMART software package the total time to analyze all these data sets was less than 15 minutes.

 

[Carnivore]

AndrewBiz,

I have to make a comment about one of your earlier post that raised red flags with me almost immediately. You had said something about using MLS and that your search results were identical to the original appraisers results and you stated there were three(If I recall correctly) improper sales used in the MC analysis by the original appraiser.

I am calling shannigans on you. You could only know if your MLS search results were identical to the original appraisers results if; 1. you had access to his work file and 2. you are more then the general public but a member of that specific MLS system.

Please state the real purpose of your orignal post and your true intentions.

What ever they are, I for one am not playing.

Have a good July fourth.