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The Appraiser Coach Podcast

Listen while you drive to and from appraisal inspections as Dustin Harris, The Appraiser Coach, gives you helpful tips, tricks, ideas, and principles which will make you a better appraisal business owner. Dustin has been a successful real estate appraiser for many years. As the Appraiser Coach, he has made it his life’s mission to teach other appraisers across the country to also succeed and thrive as real estate appraisal business owners. Join Dustin each week as he keeps you informed with the latest in the appraisal profession, interviews movers and shakers, talks to your peers about what is important to them, and shares with you his secrets to incredible success.

Dec 27, 2015

You probably hate the MC Addendum, but do you dislike it as much as Dave?  Listen in as we discuss the common mistakes appraisers are making with the MC Addendum.  Our discussions centers around this WorkingRE article:

If you want to join Dave's email group, just drop him note at

laurie adams= ca certified residential
over eight years ago

Please add me to your group as well. thank you,
laurie adams

John M. Pratt
over eight years ago

There are several problems with the MC form and it starts with the 3rd line from the top, “Total # of Comparable Active listings”. The instructions for completing the form tell us that this is the “Active listings” on the last date of that time period. Lets say the “Current – 3 months” period, if we only show those active listing on the last day of month it may be 0, 2 or 3 when in fact there could have been 10 properties that were listed and sold in that 3 month period and none of these would show in this box. Also the active listings on the last day of the month(current period) may have been listed in the 3-6 month time frame. This is very misleading.
You brought up a good point, on page # 1 the appraiser defines the neighborhood, what if none of the comparable sales cited in the report are inside the defined neighborhood, do you put “0” in the Comparable sales and Comparable sales price on the MC form. I do not believe that it would be proper to change the neighborhood boundaries to include competing neighborhoods where you found your comparable sales.
Also either Fannie or FHA, I think it was Fannie, stated that the “Housing Price” high, low & median on page # 1 of the URAR should reflect, correspond, with the information on the MC. I think that this is incorrect since the MC form only shows properties which have sold during that period or are currently listed as of the last day of the reporting period. This leaves out all of the similar “comparable” properties which were not listed and/or did not sell in the prior 12 months. This may not reflect the true makeup of the properties in the neighborhood.
This form is very confusing to the reader and may not reflect the neighborhood as described on page # 1 of the URAR

Jane Borton
over eight years ago

I would like to join your e-mail group.

Joyce J. Potts, SRA, AI-RRS
over eight years ago

First, there has to be uniformity of the understanding of the definitions between MARKET AREA, NEIGHBORHODD, DEVELOPMENT and SUBDIVISION. Secondly, there has to be uniformity in the understanding between the MICRO vs. MACRO market. These definitions have too many 'Shades of Grey' within the appraisal community. As such, it's really up to the appraiser to define them within their report with specificity. Example: See Mid-Florida (Orlando) Regional Market Pulse for residential macro trends by county. The One-Unit Housing Trend information & Present Land Use % above (Page 1) is based on the micro market as defined by the Appraiser's Delineated Boundaries and Market Area Map attached. The Inventory/Absorption at the top of the Sales Comparison Approach has additional filters to reflect homes having similar physical characteristics within the micro area and deemed to be competitive, alternative substitutes to the subject property. See Inventory and Absorption Analysis on Page 3, above the Cost Approach:

Inventory Levels and Absorption Rate are based on the following search criteria: (State search criteria):

Absorption Rate: XX Solds / 12 Months = XX.X sales per month.
Inventory Level: XX Listings / XX sales per month = X.XX months of inventory.

Do what you say and say what you do.

Everyone demonizes the 1004MC, however few like myself, see some benefit. If my value is $100,000 via the SCA, and the median price for the last two quarters of the 1004MC are $230K and $220K respectively, it commands an explanation as to why my subject property's value is so far below the median price. That is ONE example of what I think the 1004MC was designed to flag. The other main purposes are value trends based on the prior year and median DOM. Great workfile data. The 1004MC certainly is NOT optimal, but I think if serves a purpose, especially for larger markets. Rural and/or semi-rural markets, i would agree, it's usually not useful due to that lack of data to make it statistically significant. I use it to support trends, market condition adjustments in many cases and use it to MY ADVANTAGE in writing a better, compelling report.