Selling Guide Updates "Appraisal Market Area Analysis"

[Kevin L]

I am guessing many of you have seen this: https://guide.freddiemac.com/app/guide/bulletin/2024-15

Soooo what do they mean by "illustration"? Am I drawing a picture here? So helpful lol. Don't see a single example anywhere...
Also, the last bullet is something I think most of us already do with the 1004MC and would be supported by the illustration?

"To promote consistency and transparency in appraisal reports, Freddie Mac, in collaboration with Fannie Mae, is updating our requirements related to the Market Area analysis of the appraisal report and implementing standardized definitions for the terms “Neighborhood” and “Market Area.” The Guide is being updated to include these new definitions in the Glossary."

Additional guidance and requirements are included for the following:

• Selection of comparable sales
• Establish a minimum time frame (12 months) from which the overall market trend must be derived,
• Identify that the overall market trend may be different from the adjustments applied to individual comparable sales,
• Include an illustration of the methodology used to determine specific comparable sale time adjustments for changes in market conditions, and
• Include a new requirement that the appraiser must report the market analysis that supports both the indicated overall market trend and market derived time adjustments for changes in market conditions

 

[DWiley]

I am guessing many of you have seen this: https://guide.freddiemac.com/app/guide/bulletin/2024-15

Soooo what do they mean by "illustration"? Am I drawing a picture here? So helpful lol. Don't see a single example anywhere...
Also, the last bullet is something I think most of us already do with the 1004MC and would be supported by the illustration?

"To promote consistency and transparency in appraisal reports, Freddie Mac, in collaboration with Fannie Mae, is updating our requirements related to the Market Area analysis of the appraisal report and implementing standardized definitions for the terms “Neighborhood” and “Market Area.” The Guide is being updated to include these new definitions in the Glossary."

Additional guidance and requirements are included for the following:

• Selection of comparable sales
• Establish a minimum time frame (12 months) from which the overall market trend must be derived,
• Identify that the overall market trend may be different from the adjustments applied to individual comparable sales,
• Include an illustration of the methodology used to determine specific comparable sale time adjustments for changes in market conditions, and
• Include a new requirement that the appraiser must report the market analysis that supports both the indicated overall market trend and market derived time adjustments for changes in market conditions

You are looking at the bulletin, not the actual policy. The announcement notes that the bulletin includes an illustration related to time adjustments. There actually policy does not require an illustration.

The requirement is:

The appraisal report must contain the market analysis that supports the indicated market trends and any adjustments made for market conditions.

Freddie Mac Single-Family Seller/Servicer Guide

The new, user friendly Seller/Servicer Guide will make it significantly easier for you and your team to find, understand and share critical information.

guide.freddiemac.com

 

[alebrewer]

And yet the bulletin is what the direct sellers are going to focus on. This should be interesting.

 

[Non Sequitur]

And yet the bulletin is what the direct sellers are going to focus on. This should be interesting.

And honestly I don’t blame them. It’s the old AOs aren’t a part of USPAP, but we know better.

 

[sputnam]

The really big question is... why do we keep letting Lenders tell us how to appraise? Do we tell them how to make loans?

 

[TerryRohrer]

The really big question is... why do we keep letting Lenders tell us how to appraise? Do we tell them how to make loans?

If you find the assignment conditions unacceptable, you don't have to accept the assignment.

 

[DWiley]

The really big question is... why do we keep letting Lenders tell us how to appraise? Do we tell them how to make loans?

Nothing in the recent GSE announcements is telling anyone how to appraise. The USPAP already requires appraisers to conduct market analysis and not assume things about market conditions (SR 1-3).
.

 

[Tom D]

As recently noted in a 2025 FHA newsletter, we are not inspectors anymore, period. We are now observers. That includes the market. We actually are reporting on what we are observing. Or in some cases, the lack of not observing it where they get your as*.

 

[Essexfenwick]

Uhhhhh…

2004mc form

Illustration done

 

[RustyTapeMeasure]

I am guessing many of you have seen this: https://guide.freddiemac.com/app/guide/bulletin/2024-15

Soooo what do they mean by "illustration"? Am I drawing a picture here? So helpful lol. Don't see a single example anywhere...
Also, the last bullet is something I think most of us already do with the 1004MC and would be supported by the illustration?

"To promote consistency and transparency in appraisal reports, Freddie Mac, in collaboration with Fannie Mae, is updating our requirements related to the Market Area analysis of the appraisal report and implementing standardized definitions for the terms “Neighborhood” and “Market Area.” The Guide is being updated to include these new definitions in the Glossary."

Additional guidance and requirements are included for the following:

• Selection of comparable sales
• Establish a minimum time frame (12 months) from which the overall market trend must be derived,
• Identify that the overall market trend may be different from the adjustments applied to individual comparable sales,
• Include an illustration of the methodology used to determine specific comparable sale time adjustments for changes in market conditions, and
• Include a new requirement that the appraiser must report the market analysis that supports both the indicated overall market trend and market derived time adjustments for changes in market conditions

I think your first step is fully understanding the basic and clear definition of what 'illustration' means.