1004MC Form Explanation
What each field on Fannie Mae's Market Conditions Addendum (Form 1004MC) means and how DataMaster calculates it.
The past 3 month period. For example, if the effective date is 7/9/2010 the period would be 4/10/2010 through 7/9/2010.
The 3 month period of time between 6 months ago through 4 months ago. For example, if the effective date is 7/9/2010 the period would be 1/10/2010 through 4/9/2010.
The 6 month-period between 12 months ago and 7 months ago.
For example, if the effective date is 7/9/2010 the period would be 7/10/2009 through 1/9/2010.
The sum of all of the sales that have happened at any point in the specified period. It includes only “closed” sales transactions.
Total # of Comparable Sales divided by the time period in months.
The properties that were “active” listings on the last day of the period.
More specifically, including only properties that were still available to be shown to prospective buyers. Other properties such as expired, sold, pending sales, under contract etc are excluded from this calculation.
A difficult question arises concerning “contingent sales”. These are treated differently from one MLS to the next. Fannie Mae gave us the following guidance and instruction. “If contingent sales are still considered active listings then include them. If not, then don’t include them.” As the appraiser, you must reflect what is common and customary for your area.
DataMaster does NOT include “contingent sales”.
The Total # of Comparable Active Listings divided by the Absorption Rate for the specified period.
The middle (median) sale price for all sold properties within the specified period. If there are two middle values, the median is the average of the middle values.
If Days on Market (DOM) is available, the median Days on Market value for all sold properties for the specified period.
NOTE:
- Some MLSes only provide the DOMs for the current listing contract.
- Others provide CDOM (Cumulative DOM) which includes the number of days for all previous listing contracts for that property.
- Some MLSes provide both DOM and CDOM.
- Some MLSes have other descriptions.
- Some do not provide DOMs. In those cases, we calculate the DOM by comparing the original list date with the date you pulled the data from the MLS. This method DOES NOT include previous listings on the same property.
The middle (median) list price of all end-of-period listings for the specified period. If there are two middle values, the median is the average of the two values.
Where Days on Market data are available, the middle (median) Days on Market (DOM) value for all end-of-period listings for the specified period.
The median value for all properties when they are sorted on their individual sale price-to-list price ratio.
For example, if you have 3 properties
Property 1: lp 70,000; sp 70,000; sp/lp 100%
Property 2: lp 200,000; sp 160,000; sp/lp 80%
Property 3: lp 80,000; sp 40,000; sp/lp 50%
Median Sale Price: 70,000 (the middle of 160, 70, and 40)
Median List Price: 80,000 (the middle of 200, 80, and 70)
Median SP/LP Ratio: 80% (the middle of 100%, 80%, and 50%)
Information about the trends of seller concessions, if available.
In many areas it is very difficult to accurately determine the distressed status of a listing.
DataMaster makes every effort to accurately determine if a property is distressed.
If the MLS has fields that specifically indicate when a property is bank-owned, such as a short sale flag or REO flag, then DataMaster uses this to determine its distressed status.
In many cases the only available indicators that a property is distressed is from agent remarks or ownership information. DataMaster searches all available remarks (private and public) and ownership information for the following key words: REO, Bank Owned, Foreclosure, Short Sale, Bank Approval, Lender Approval, and Auction.
Current – 3 Months: The past 3 month period. If the effective date is 7/9/2010 the period would be 4/10/2010 through 7/9/2010.
Prior 4 – 6 Months: The 3 month period of time between 6 months ago through 4 months ago. If the effective date is 7/9/2010 the period would be 1/10/2010 through 4/9/2010.
Prior 7 – 12 Months: The 6 month period of time between 12 months ago through 7 months ago. If the effective date is 7/9/2010 the period would be 7/10/2009 through 1/9/2010.
Total # of Comparable Sales: This is calculated by summing all of the sales that have happened at any point in the specified period.
Absorption Rate: The number from the “Total # of Comparable Sales” section divided by the length of the period in months.
Total # of Comparable Active Listings: This is calculated by summing all of listings that have been listed at any point in the specified period. No matter what the current status is (expired, sold, active, etc…) it will be counted if it had been an active listing at any point during the specified period.
Months of Housing Supply: This is calculated by taking the “Total # of Comparable Active Listings” and dividing it by the “Absorption Rate” for the same specified period.
Median Comparable Sale Price: This is calculated by taking all of the sold properties for the specified period and finding the median (middle) sale price. If there are two middle values the median will be the two values averaged together.
Median Comparable Sales Days on Market: If the Days on Market data are available this will be calculated by getting the median Days on Market value for all sold properties for the specified period.
Median Comparable List Price: This is calculated by taking all of the listings for the specified period and finding the median list price. If there are two middle values the median will be the two values averaged together.
Median Comparable Listings Days on Market: If the Days on Market data are available this will be calculated by getting the median Days on Market value for all listings during the specified period.
Median Sale-to-List Price Ratio: This is just the median value for all properties when they are sorted on their individual sp/lp ratio. Example: Let’s say you have 3 properties
Property 1: lp 70,000; sp 70,000; sp/lp 100%
Property 2: lp 200,000; sp 160,000; sp/lp 80%
Property 3: lp 80,000; sp 40,000; sp/lp 50%
Median Sale Price: 70,000 (the middle of 160, 70, and 40)
Median List Price: 80,000 (the middle of 200, 80, and 70)
Median SP/LP Ratio: 80% (the middle of 100%, 80%, and 50%)
Seller Concessions Explanation: When seller concession information is available to DataMaster this section will include some information about the trends of these concessions.
Foreclosure Trends: In many areas it is very difficult to accurately determine the foreclosure status of a listing. DataMaster makes every effort to accurately determine if a property is bank-owned or in foreclosure. If the MLS has fields that specifically indicate a property is bank-owned, such as a short sale flag or REO flag, then DataMaster will use this to determine its REO status. In many cases the only available indicators that a property is REO is from the agent remarks or ownership information. DataMaster searches all available remarks (private and public) and ownership information for the following key words: REO, Bank Owned, Foreclosure, Short Sale, Bank Approval, Lender Approval, and Auction.