Should the number of sales and listings reported on the 1004MC be the same as the number of sales and listings reported on the top of page 2 of the URAR?

Yes, because the two forms are asking for the same thing. The appraisal report forms ask for the number of comparable properties currently offered for sale in the subject neighborhood. The 1004MC asks for the number of properties offered for sale as of the last day in the “Current-3 months” column. Fannie Mae clarified this in Announcement SEL-2010-09 on June 30, 2010, which stated:

"…when completing the “Current – 3 Months” column for “Total # of Comparable Active Listings,” the number should reflect the listings on the most recent date in the 3-month period (which is also the effective date of the appraisal), and not the cumulative number of listings for the entire 3-month time period."

Likewise, the appraisal report forms ask for the number of comparable sales in the subject neighborhood within the last 12 months and the 1004MC asks for the same thing, broken down into three different time periods. So if you add up the boxes in the top row of the 1004MC grid, it should total what you are reporting on page 2 of the URAR. Don’t be confused by the fact that the 1004MC uses the term “properties that compete with the subject property” and the URAR uses the term “comparable sales.” A Fannie Mae spokesperson at a recent industry event confirmed that the terms are synonymous.

In other words, do NOT report all transactions in the subject neighborhood and do NOT expand the neighborhood boundaries just to obtain more data. The key to answering the question accurately are the words “comparable” and “compete.” While it may be that all of the properties in the subject neighborhood may be “comparable” to or “compete” with the subject, that is often not the case. Most neighborhoods (or larger market areas in rural locations) have submarkets with which the subject is associated. Therefore, it is typical that only a select or specific group of sales are actually comparable or compete in the neighborhood with the subject directly.

The questions at the top of page 2 of the URAR also ask for a “price range” from low to high. The range represents the results from the data search for comparable or competing properties in the subject neighborhood. Remember, a search for comparable or competing properties to the subject must be based on relevant characteristics determined by the market and reflected in the appraiser’s judgment of the market’s reaction to those characteristics. Searches for comparable or competing data to the subject should NOT be based on price or price ranges. USPAP is clear in the Management Section of the ETHICS RULE, that developing an opinion of value based on a predetermined range of value is unacceptable.

It’s important to recognize the intent of asking for both the number of, and price range of listings and sales in the report is to provide an analysis of supply and demand for comparable (or competing) properties to the subject in the defined neighborhood. As a result, the search parameters used to complete both the 1004MC and the top of page 2 of the URAR must be consistent with your Neighborhood Boundaries stated on page 1 of the report form.

Being clear in completing the 1004MC and the top of page 2 of the URAR will result in the intended user understanding what neighborhood data (if any) is competitive with the subject. Early in the report, this allows the intended user to understand the amount and quality of data from which you have to choose in the subject neighborhood for developing an opinion of value. It also explains why, if necessary you will have to leave the subject neighborhood due to limited or non-existent comparable data to derive a credible opinion of value.