Comments on: Crystal Ball & PFA Techniques

By: Michael F. Ford, AGA, GAA, RAA, Realtor®

Michael F. Ford, AGA, GAA, RAA, Realtor® — Sat, 18 Aug 2018 00:21:57 +0000

We as appraisers have an absolute obligation NOT TO MISLEAD in our appraisals. The ONLY excuse for having ever used a 1004MC is “FNMA required it.”

CLIENTS may NOT impose conditions on us that in our opinion could or would result in a misleading appraisal report. That includes the mandatory use of 1004MC UNLESS it is one of those rare instances in which it does show relevant data.

IF you have data that you believe to be more relevant than 1004MC then THAT is the data that should be providing. UNLESS those moronic clients that still insist on it (1) either give you the leeway to use something else or (2) pay you a separate pre screening fee before you have to accept of reject the assignment, so you can tell whether you are permitted to accept their assignment or not; we should no longer be working for them!

By: don

don — Wed, 15 Aug 2018 19:53:12 +0000

Lots of great comments. IS the truth being told? In my vision I believe that the market is a big thing. Most MLS’s provide a download feature that enables us to past 150+ or – items into excel. Reading the Active, pending, contingent and closed listings using statistical and sorting methods. These methods do indeed illustrate that neighborhood are different. Simple sorting of the mean and medium illustrate whether the marketing is advancing or slowing. MLS has become the greatest boon to appraisers, allowing to prove in believable, readable information blocks that we are RITE.

Most appraisers learned their trade when lenders were mostly loaning on a sale, the refinancing changed the integrity of financing. Most sale had honest agents, and escrow people. Appraiser’s couldn’t go wrong. No wonder we were looked down. We were only told the information they wanted us to hear..

Modern competition among MLS’s is allowing us to write reports which insure we are believable.

We can still use these tools to write good reports regardless to demand made by self serving underwriters

By: Baggins

Baggins — Wed, 15 Aug 2018 19:48:35 +0000

In reply to TruthBTold.

Revision request. Appraiser to remove the MC form and use our proprietary analytic tools and print outs instead. Don’t forget to try out our typing services so you can get back to appraisal and not waste your time with appraisal. The free market takes care of fees but remember the lenders must quote the appraisers fee before consulting with the appraiser. It’s the law.

By: TruthBTold

TruthBTold — Wed, 15 Aug 2018 18:50:14 +0000

For me, given the time constraints I am put under to complete an appraisal report, the MC Report has been the best tool available. I am able to outline my specific neighborhood using the MLS tools, specify specific property characteristics unique to my subject (sq.ft., lot size, bed/bath etc…) and come up with enough data to support a trend (large metro area). Other options I’ve seen are much more time consuming, and a lot less specific, MSA data, data by zip code, all without the ability to be property specific. Without using the MC Report, it will take much more time, without compensation to fulfill my responsibility to report a credible trend analysis. For me, this is another slap in the face of appraisers. The Fannie Mae announcement generally states that it creates more work for them, therefore it is less profitable for Fannie and their new partners in crime, lending institutions. Just another statement of “we’re only interested in what benefits us and lenders, to hell with USPAP, accurate reports, public trust, or consideration for the appraiser and what it takes to produce a credible report”!

By: Baggins

Baggins — Wed, 15 Aug 2018 17:56:41 +0000

So like just winging it is now off the menu? I liked the MC, sometimes it was reasonable and it helped provide a good framework for effective research to identify consistency in market and comparing several MC’s, etc. There it is, that’s my final data set, this MC is working, I’ve got my 2 in 90, 2 actives, and it’s showing trending reasonably. A good final data set comes around with reasonable margin for high vs low value expectations, and MC is effective as a quick look tool to see if you’re there or not, along with 1 line market overviews. As long as my MLS provides this auto MC I’ll keep using it, although I change some items slightly.

By: Matt McCormick on Facebook

Matt McCormick on Facebook — Wed, 15 Aug 2018 17:18:25 +0000

In reply to Mike.

By: Matt McCormick on Facebook

Matt McCormick on Facebook — Wed, 15 Aug 2018 15:07:03 +0000

Excellent article

By: Mike

Mike — Wed, 15 Aug 2018 13:40:20 +0000

Dave, Don’t worry, I will not be hurling my perfectly good 20 year old clip board at you. Nor will I disagree about using charts graphs and spreadsheets in our reports. I will not even disagree with what Fannie Mae states in their selling guides.

What I will state is that Fannie Mae is not always correct. The 10-15 25% adjustment guidelines, UAD, Collateral Underwriter, and the 1004MC are all good examples of how Fannie got it wrong. Waivers and hybrids are another way Fannie is getting it wrong.

When it comes to market trends, entire neighborhoods do matter, probably more so than comparable properties. First rule of real estate is location, location, location. People buy homes based on school districts, access to amenities, interstates, employment and sometimes based on a perceived status of an area.

In many parts of my area (and I am sure others as well) we do not have homogenous properties. There are typically many different style and size homes within an area, sometimes we have newer homes being built on fill in lots. And what about the buyers whot tear down the old small home and build a mc mansion? All those sales are based on location. Does the value of the 2,000 SF home in a neighborhood of 1,000 SF homes compete with home in other neighborhoods? No. Isn’t the value of the oversized home impacted by the value of surrounding properties? Unless the subject is unique historic or just an odd., Fannie Mae is dead wrong here.

As Appraisers yes, we need to give our client what they want, but in reality it is our signatures, our opinions, and our licenses. The Appraiser must appraise to market value, in other words, the actions of a typical buyer, not Fannie Mae.