Stable Market

[Fernando]

Just about everything Fernando does raises a red flag. Going outside the neighborhood is how he makes sure the 1004MC has sufficient data points to look credible

Obviously, expand the neighborhood if need be. Do I have to tell you how to analyze?

 

[Fernando]

Good point.

What stinks is when I fill out the 1004mc with zeros, this makes the AMCs go crazy. I actually have one AMC that says it cannot be "0" in their LOE.

I agree. Can't be zero. Learn to be creative.

Then, when the top of page 2 is all zeroed out and I used three comps sales....this really baffles them. How can it be 0 listings and 0 closed sales but you have three closed sales in the grid?

Because I didn't expand the neighborhood boundaries just to be able to fill out the top of page 2?

And the GSEs wonder why appraisers are the way we are.

What's wrong with you appraisers? I know it wasn't taught in the textbooks but appraisers need to think for themselves.

 

[Fernando]

B4-1.3-08, Comparable Sales (06/04/2025)

This topic contains information on selection of comparable sales, including:

selling-guide.fanniemae.com

When choosing comparable sales, the appraiser should examine the market area of the subject property, assess its characteristics, and identify similar comparable sales. Market area is defined as the geographic region, for a subject property, from which most demand comes and in which most of the competition is located. This does not mean comparable sales must be identical to the subject property, but instead should be competitive and appeal to the same market participants that would also consider purchasing the subject property. If the available comparable sales are not similar, the appraiser needs to decide whether an expansion of the market area search is appropriate. If this occurs, the appraiser must provide commentary to explain the rationale for selecting comparable sales outside the subject's market area and make location adjustments if warranted.

Comparable sales from within the same market area (including subdivision or project) as the subject property should be used when possible and must be used in certain instances (see below). Sale activity from within the neighborhood is the best indicator of value as sales prices of comparable properties from the same location should reflect the same positive and negative location characteristics.

Fannie Mae does allow for the use of comparable sales located in competing market areas, as these may simply be the best comparables available and the most appropriate for the appraiser’s analysis. If this situation arises, the appraiser must not expand the neighborhood boundaries just to encompass the comparables selected. The appraiser must indicate the comparables are from a competing neighborhood and address any differences that exist. The appraiser must also provide an explanation as to why they used the specific comparable sales in the appraisal report and include a discussion of how a competing neighborhood is comparable to the subject's neighborhood.

It doesn't apply to Fernando using 1004MC form. Try not to get out of the neighborhood but if need be, so be it. Never had a problem.

If a property is located in an area in which there is a shortage of truly comparable sales, either because of the nature of the property improvements or the relatively low number of sales transactions in the neighborhood, the appraiser might need to use properties that are not truly comparable to the subject property. In some situations, properties that are not truly comparable may simply be the best available and the most appropriate for the appraiser’s analysis. The use of such sales is acceptable if the appraiser adequately documents the analysis and explains why they were used. (For additional information, see B4-1.3-03, Neighborhood Section of the Appraisal Report

I agree. There is the exception allowing a leeway to justify what we did if we explain.

 

[Fernando]

And therein lies the problem, or at least part of it.

And some wonder why the lenders are moving to Waivers and AVMs.

Yes, that's the problem with time adjustments.
Reviewers should not give much weight to time adjustments.

 

[J Grant]

Its informative th refresh ourselves on how the URAR asks teh question. It does not ask whether values have increased or declined. (past tense )

It asks if values are increasing, or decreasing, as in present tense. They ask if the trend is continuing. To support that, it also asks about DOM and supply/demand. Which means the last quarter, and the present listings and spending, deserve special analysis.

 

[Mark K]

Yes, that's the problem with time adjustments.

No, the problem is with an "appraiser" that "need to bump up the appraised value" by not doing it correctly in the first case.

 

[TerryRohrer]

Its informative th refresh ourselves on how the URAR asks teh question. It does not ask whether values have increased or declined. (past tense )

It asks if values are increasing, or decreasing, as in present tense. They ask if the trend is continuing. To support that, it also asks about DOM and supply/demand. Which means the last quarter, and the present listings and spending, deserve special analysis.

How the URAR asks the question is irrelevant. The reporting of neighborhood trends has changed in the last 6 months and the form didn’t change. When the 1004MC was introduced, reporting on neighborhood trends changed and the form did not change. The assignment conditions, in the form of selling guides and handbooks and engagement letters, dictate what is reported, not (mis)interpretation of what the form “might say.”

 

[chad hampton]

I guess this agent was just lazy. Before you try to weasel anything....the home has not changed.

1149 Rosecliff Dr, Waxhaw, NC 28173 | Zillow

1149 Rosecliff Dr, Waxhaw NC, is a Single Family home that contains 4019 sq ft and was built in 2025.It contains 5 bedrooms and 4 bathrooms.This home last sold for $1,490,000 in June 2025. The Zestimate for this Single Family is $1,490,300, which has increased by $54,040 in the last 30...

www.zillow.com

Closed 06 25 for $1,490,000
Sold 01 25 for $1,383,288.

Darn that stable market lol.

That’s new construction, assuming Zillow is right. When was the contract signed? I wouldn’t use new construction to determine market trends. Not sure why they sold in June, but I bet if they signed that contract a year earlier, which is typical in Waxhaw, they certainly expected to have it make more than 100 K in 12 plus months.

New construction, especially in Waxhaw, is a mess to appraise. That’s in my backyard and I avoid those new builders down there at all costs.

 

[J Grant]

That’s new construction, assuming Zillow is right. When was the contract signed? I wouldn’t use new construction to determine market trends. Not sure why they sold in June, but I bet if they signed that contract a year earlier, which is typical in Waxhaw, they certainly expected to have it make more than 100 K in 12 plus months.

New construction, especially in Waxhaw, is a mess to appraise. That’s in my backyard and I avoid those new builders down there at all costs.

New construction is its own submarket.
Appraisers need to comment, such as the general market is stable, but new construction is seeing rising prices ( or whatever applies)

 

[Fernando]

Its informative th refresh ourselves on how the URAR asks teh question. It does not ask whether values have increased or declined. (past tense )

It asks if values are increasing, or decreasing, as in present tense. They ask if the trend is continuing. To support that, it also asks about DOM and supply/demand. Which means the last quarter, and the present listings and spending, deserve special analysis.

Good point.
Appraiser can interpret trend based on past year or 6 months?
Or regardless in the past, current price trend which can be different. Appraisers have so many ways to interpret.