Information about the new Fannie Mae Form
Effective April 1, 2009 all residential appraisals require the new Fannie Mae 1004MC Market Conditions Addendum form. You must upgrade your software to be compliant.
ClickFORMS includes the 1004MC form in versions 6.5 through 6.7. However, Fannie Mae revised the form in late March 2009. The latest 2009 version was included in ClickFORMS 6.8 and all previous versions of the form may no longer be used. If you have any version of ClickFORMS prior to 6.8, your software is now out of date and must be updated.
Update ClickFORMSThe final 1004MC Addendum form requires ClickFORMS version 6.8 or above.
1004MC ServiceThe most comprehensive 1004MC market analysis, hassle-free and fully automated. Just click.
1004MC to AppraisalPort Update
This updated mapping file will allow the Case No. cell on the 1004MC to transfer to AppraisalPort properly. The file is a self-extracting ZIP file. When unzipped, the file will be placed in the default folder.
Fannie Mae Presentation on the 1004MC
Gain an understanding of and recognize the sources of market information necessary to analyze market conditions. Fannie Mae's new recorded training is organized to address the Market Conditions Addendum (Form 1004MC), effective April 1, 2009, section by section.
Henry Harrison's Guide to the 1004MC
A complete line-by-line analysis of the form, with comprehensive Author's Comments regarding implications, cautions and pitfalls to avoid. Includes a complete condominium case study and filled out 1004MC form, including CD-ROM. Now available from the AppraisalWorld Shopping Mall.
An update to this book regarding the March 2009 revision is available in PDF format.
Changes to the 1004MC
Fannie Mae has revised the 1004MC (Market Condition) Form in order to give more flexibility on what fields are mandatory. It is understood that not all historical data is available to an appraiser, so there are now certain fields that are only required if the information is available. Specific changes include:
- The bottom two lines in Inventory Analysis are now shaded except for the column "Current to 3 Months," as are the third and fourth lines of Median Sale & List Price, DOM, Sales/List %. (Shaded areas are not required, however if you can supply the info then you should)
- Fourth line wording is changed from "Median List-to-Sale Price Ratio," to "Median Sale Price as % of List Price." This change also affects the auto calculation provided by your forms software.
The March 2009 revision of the 1004MC is available in ClickFORMS 6.8.
Fannie Mae's Official Page
Fannie Mae's official web page featuring FAQs and recorded training for the 1004MC.
"Median Sales Price as % of List" Calculation
"Median Sales Price as Percent of List Price" is not automatically calculated in ClickFORMS. This ratio is measured by calculating the median from the list of ratios for the sold comparables chosen for analysis, and not by dividing the overall Median Sales Price by the overall Median List Price on the form. Because this list is not stored or entered into ClickFORMS, the calculation cannot be automated at this time.
Bradford Technologies is currently integrating other solutions with ClickFORMS to provide enhanced analytics.
Frequently Asked Questions
What is the purpose of the Market Conditions Addendum?
Due to the complexity of the current real estate market, Fannie Mae created the Market Conditions Addendum to capture additional information to enhance the transparency of the market trends and conditions conclusions made by the appraiser.
Will the Market Conditions Addendum be required with all appraisals?
Yes, the Market Conditions Addendum must be included with the appraisal report for all appraisals on one- to four-unit properties with an effective date on or after April 1, 2009. The addendum must be provided with Fannie Mae Forms 1004, 1004C, 1004D, 2055, 1073, 1075, 2090, 2095, and 1025.
What if requested data is not available to the appraiser? For example, what if comparable active listings from a previous time period are not available?
If the appraiser is unable to complete a portion of the addendum because data is unavailable or unreliable, the appraiser must provide an explanation of his or her efforts to obtain such data and why it is not available. Simply stating "not applicable" or "N/A" is not an acceptable response.
What is the absorption rate and how is it helpful in identifying market trends?
The absorption rate is the rate at which properties for sale have been or can be sold (marketed) within a specific area. It is helpful in determining supply and demand trends for a market area.
How is the absorption rate determined?
The absorption rate is determined by dividing the total number of sales for a given market by the time period being analyzed. Example:
If there were 60 sales during the 6-month time period being analyzed, the absorption rate would be 10 sales per month (60 divided by 6). If there are 240 active listings there would be a 24 month supply of homes on the market (240 divided by 10).This calculation may support an appraiser's conclusion that there is an oversupply of homes on the market. Anomalies in the data such as seasonal markets, new construction, or other factors must be addressed in the form.
Refresher on Mean, Median, Mode and RangeMean, median, and mode are three kinds of "averages". There are many "averages" in statistics, but these are, I think, the three most common, and are certainly the three you are most likely to encounter in your pre-statistics courses, if the topic comes up at all.
The "mean" is the "average" you're used to, where you add up all the numbers and then divide by the number of numbers. The "median" is the "middle" value in the list of numbers. To find the median, your numbers have to be listed in numerical order, so you may have to rewrite your list first. The "mode" is the value that occurs most often. If no number is repeated, then there is no mode for the list.
The "range" is just the difference between the largest and smallest values.
Find the mean, median, mode, and range for the following list of values:
13, 18, 13, 14, 13, 16, 14, 21, 13
The mean is the usual average, so:
(13 + 18 + 13 + 14 + 13 + 16 + 14 + 21 + 13) ÷ 9 = 15
Note that the mean isn't a value from the original list. This is a common result. You should not assume that your mean will be one of your original numbers.
The median is the middle value, so I'll have to rewrite the list in order:
13, 13, 13, 13, 14, 14, 16, 18, 21
There are nine numbers in the list, so the middle one will be the (9 + 1) ÷ 2 = 10 ÷ 2 = 5th number:
13, 13, 13, 13, 14, 14, 16, 18, 21
So the median is 14.
The mode is the number that is repeated more often than any other, so 13 is the mode.
The largest value in the list is 21, and the smallest is 13, so the range is 21 – 13 = 8.
Note: The formula for the place to find the median is "( [the number of data points] + 1) ÷ 2", but you don't have to use this formula. You can just count in from both ends of the list until you meet in the middle, if you prefer. Either way will work.