This is the first in a four-part series dealing with the new 1004MC form (MCF) by David Braun, MAI, SRA. In this series, David begins with a discussion of where appraisers are NOW . . .and gives some direction on where we're headed. In Part 2, David's looks a appraiser frustration with the 1004MC and in Part 3, gives us a "What Goes Where and Why" look at the 1004MC.
April first has come and gone; and the mandate to use the 1004MC-71 form (MCF) is firmly in place. Much like in a horse race appraisers are accelerating out of the blocks- with a few still stuck in the gate. The form appears to have been primarily designed by Fannie Mae, with some input from Freddie Mac, and the Appraisal Institute. The intent of this writing is to discuss the progress of appraisers to adapt to the form and to begin a converging of the various opinions of how the analysis should be completed.
The players in this scenario are the designers of the MCF, solution providers, appraisers, and reviewers. My personal expertise is as one of the solution providers, but also as an appraiser and fee reviewer. I have 30+ years of appraisal experience, am a certified USPAP instructor, the author of APPRAISING IN THE NEW MILLENNIUM, Due Diligence & Scope of Work, designed and developed the USL Documenter II software, and the Regression Plus; for Real Estate Professionals. I did not help design the MCF, nor have I interviewed those that did.
I feel the MCF is too restrictive (perhaps to keep it one page), but otherwise I believe it is a positive progression in the evolution of the appraising industry. Now that most appraisers have access to spreadsheets they can assemble and analyze hundreds of records at one time. This is a stock pile of raw resources that appraisers can no longer afford to ignore. In fact, appraisers like in every other industry in America must exploit every asset at their disposal and evolve their research and development to a higher degree of efficiency.
Appraisers should begin to grasp the MCF as a tool to help them and not a hurdle to jump over. In this new millennium...”appraisers must evolve from form-fillers and template masters to problem solvers.” At this time most appraisers are simply trying to fill out the form with little recognition of its potential role in the appraisal process.
Over time, this will change and appraisers will recognize that when a good market condition analysis is performed, the appraisal is half way complete. In the mean time industry leaders such as instructors, writers, and reviewers should keep pounding the message that the MCF is a viable tool that can provide significant insight and lead to a credible appraisal.
I have found that many appraisers are hung up on how get their MLS search results exported to a spreadsheet and if necessary converting that data to a standard spread sheet format which will allow for organization of the data and analysis. This is not to imply that every appraisal market will require the use of a spreadsheet. Many rural markets with few properties will simply be done by hand.
Appraiser’s coming out of the gates are like the early stage of a race for a human sprinter; their heads are mostly down right now, but shortly their heads will look up and they will be searching for points of reference to guide them.
These points of reference include books, seminars, automated tools, and the designers of the form. The successful appraiser will have to expend the energies to absorb information from all of these sources. Those that ignore this wealth of information and are content to merely fill in each blank on the form will find that the users of appraisals will intentionally and systematically begin to remove them from their approved appraisal lists.
Once appraisers make the effort to learn and evolve they will need automated tools in order to meet the budget constraints that they operate under. Most of the commercial form providers have integrated the MCF into their software packages. But, they have built in little automation. I have been offering automated solutions to appraisers for almost a decade. But, as an appraiser it is difficult to appraise and develop software. I have been delighted to see appraisers besides myself offering commercial report writing software and MCF tools. Many appraisers have developed tools, but most never make it to market. These efforts represent a significant shift in how automated tools reach appraisers.
It is my hope that these appraiser/developers will unite and support one another to better provide appraisers with the automated tools they need to do their job.
Watch for Part Two! David gives us a "What Goes Where and Why?" look at the new 1004MC Form!
Author: David A. Braun, MAI, SRA (President, Braun & Associates, Inc.) has been actively engaged in real estate appraisal, review, and consulting since 1976. David is also the author of Appraising in the New Millennium - Due Diligence & Scope of Work, 3rd Ed. All of his products can be found on http://www.ScoopGear.com
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