Would Adding A 1004mc To A Completed Appraisal Comply With USPAP?

[Terrel L. Shields]

If the 1004Mc is completed correctly, I fail to see how it could change the results

Using wider metrics and not the confines of the MC, which is what one can do and would do in the absence of the MC form as well as would do in a rural environment results in different indications. That is simply the result of too small a sample within the MC constraints. When the MC results are meaningless, then common sense should dictate the judgment of the appraiser. The MC form contemplates the opposite of common sense and assumes everything can be quantified into neat little packages - an AVM with a signature. It's not appraising as I understand it rather is best for the book "Form Filling for Idiots". When the sparse inputs of the MC show some suspect or simply wrong conclusions simply due to lack of data, then the MC and the "real" analysis may require considerable analysis and emphasis on why the MC form fails. In an urban setting, perhaps not so much.

 

[CANative]

In my turf, a neighborhoods can defy meaningful boundaries or areas. There may be 1 or 2 sales each year and nothing is conforming and nothing is consistent. The 1004MC using the FNMA instructions/metrics produces no meaningful results and without explanation can portray trends in a terribly misleading manner. Using an off-label approach by preparing another 1004MC using multiple cities that might also attract a buyer can be a bit better because there might be 10 or 20 sales and listings. Using an off-off-label approach by including the entire 3,500 square mile county on the presumption that market trends and conditions are about the same in one area as another might produce enough data points for a really good statistical analysis and have mahybe 100 sales and listings (or more.)

This can be summarized in the narrative section of the reports market analysis and the report becomes credible and understandable. I can retain these static MC pages (detail reports have a spreadsheet of all the data) in my work file. Sometimes I import a pdf into the report and present it as an exhibit addendum under the active MC addendum.

Nothing prevents an appraiser from using the MC function in this way as long as there is the obligatory Neighborhood only, competing property only format.

 

[TRESinc]

Using wider metrics and not the confines of the MC, which is what one can do and would do in the absence of the MC form as well as would do in a rural environment results in different indications. That is simply the result of too small a sample within the MC constraints. When the MC results are meaningless, then common sense should dictate the judgment of the appraiser. The MC form contemplates the opposite of common sense and assumes everything can be quantified into neat little packages - an AVM with a signature. It's not appraising as I understand it rather is best for the book "Form Filling for Idiots". When the sparse inputs of the MC show some suspect or simply wrong conclusions simply due to lack of data, then the MC and the "real" analysis may require considerable analysis and emphasis on why the MC form fails. In an urban setting, perhaps not so much.

go back and read the instructions printed on the form itself. all of your "concerns" have already been met.

 

[Have Laser-Will Travel]

As a follow up, you cite housing supply. Well, that is addressed on page 1 of a URAR. So, analysis of that would have already been required Adding a 1004MC should not have any affect on that. it would just change how (the format) it is reported.

That’s actually not the same thing, hence the creation of the 1004MC in the first place. But you can choose a different example if you like.

 

[TRESinc]

That’s actually not the same thing, hence the creation of the 1004MC in the first place. But you can choose a different example if you like.

 

[Have Laser-Will Travel]

i suggest you go back and re-read the 1004MC form. it has nothing to do with the subject's market. it's only concern is the neighborhood. taken directly from the first line of the form itself:

Yes, it’s different analysis. That was the basis of my question.

 

[TRESinc]

Yes, it’s different analysis. That was the basis of my question.

so you only analyze the subject's market when performing an appraisal, not the neighborhood?

 

[DWiley]

That’s actually not the same thing, hence the creation of the 1004MC in the first place. But you can choose a different example if you like.

LOL. Now we have identified the problem - the first step in solving any appraisal problem. . I suggest reading the instructions printed on the 1004MC. They are supposed to be the same thing. If you think otherwise, that explains this thread.

 

[DWiley]

Yes, it’s different analysis. That was the basis of my question.

If it is different, then why do the instructions on the 1004MC explicitly state that the data in the 1004MC MUST be the basis for what is reported on page 1? Inquiring minds want to know.

 

[Have Laser-Will Travel]