The low grades come from a variety of issues (many identified in prior parts of this series) and a few that I will revisit here.

• Trends are only valuable when placed in perspective as to the events (employment, credit, migration, consumer confidence, etc.) that influenced the trend. Without tying the catalyst to the data, there is no basis for what caused the trend or its future direction. Who cares about what happened last year, if it will not be repeated this year? The 1004MC does not address current "market forces" that may influence the trend.

• "Overall trends" would seem to imply that the "selected trend" requires comparison of the results from the "prior 7-12 months column" to the "current to 3 months column". The market may be stabilizing (as indicated by a combination of similar results in two consecutive periods and improving employment, migration, and credit conditions); however, the indicated "overall trend" will be declining on the 1004MC.

• The influence of "seasonality" is a required observation, but the 1004MC does not seem to consider that most markets (let alone resort or college towns) are seasonal in nature, with the housing market more active during the spring and summer (March - August) and fewer sales in the fall and winter (September - February), generally attributed to buyers with "school-age children". Higher or lower sales numbers will be posted in some periods, not as a result of positive or negative shifts, but rather family needs.

The 1004MC - Things to consider

"It's not over until it's over" and I for one do not think, "the fat lady has sung yet" on this one. You can expect amendments to the form or instructions. In the meantime (and until we hear a voice in the rafters), there are several factors to consider.

• The 1004MC compliments the trends in the URAR Neighborhood section. It does not replace them. The trends for "competitive to the subject", are "a basis" (point of beginning) for the URAR to compare and contrast the subject to the neighborhood.

• The focus of the 1004MC is to "document the trend", not doing the math. Do not read too much into DOM vs. CDOM, original list date vs. current list date, original price vs. current price, etc. Stay consistent and the trends will likely be the same.

• The phrase "overall trend" implies beginning to end and does not seem to allow for a shift over to consecutive periods. How many months, quarters, periods determine a "shift in the trend" in your market? If "overall" is the only consideration, it could take up to three periods of improving activity before you can report a shift in the trend. Would this be accurate or misleading?

• USPAP requires you to observe and to communicate to the client in a way that is "not misleading" and that is "credible". While the 1004MC documents "statistics and observations", do not let it replace "good appraisal practices". Trends are, "reflected in the numbers", however the numbers "are influenced" by economic factors (employment, credit, migration, consumer confidence) not considered in the 1004MC.

• Revisit the differences between market areas and neighborhoods, homogeneous and heterogeneous, because those differences affect the statistics. Consider how buyers define the neighborhood and competitive to the subject. Go beyond :street boundaries" to reflect on the many factors that shape a neighborhood, such as school zones, economics and physical characteristics of the housing.

• Virtually all markets are seasonal. Chart 5 to 6 years of "monthly sales data" in your market to observe and document seasonality and be prepared to explain it.

• The 1004MC is an "underwriting tool" completed by the appraiser, not an appraisal form. USPAP requires you to know the difference and supplement your report to make it meaningful and to avoid being misleading. Sometimes, you will not have enough data to complete the 1004MC.

You will need to develop and addendum to this "addendum" and a "clarification of your scope of work" to communicate what you considered and how you addressed the elements of the 1004MC, including any explanations on the limitations of the data, etc.

"Just the facts ma'am"

Mark Twain said it best, "gather the facts first and distort them as you like". The absence of clear directions for the 1004MC and standards for measuring various elements of the form and its parent, the URAR, remain the primary impediment to producing something credible, the underlying purpose of any appraisal.

The statistics reported in the 1004MC may work well in "balanced market conditions", however, the "reality of realty" is such that the market is rarely in balance/ Real estate is highly dependent on the influence of market forces, especially employment, migration, credit availability and consumer confidence, none of which are factored into the "overall trends".

What you determine as "the neighborhood" will set the stage for the "trends". When the numbers are subject to "selective interpretation" (based on how you define the neighborhood and competitive to the subject), the results can be a function of GIGO - "garbage in, garbage out".

Take the time to segment the data. "If it wouldn't be on your market grid", is it competitive to the subject and should it be in your statistics on the 1004MC?

Author's Note: This is the final installment in the series "First Impressions of the 1004MC", but not likely my final words on the new form. I expect changes and I will have more thoughts and feedback as I present workshops for a la mode, Inc. in 25 cities over the next two months.

For anyone interested, I will be creating a 1004MC Group on The Appraiser's Water Cooler, where we can post questions, raise issues and share ideas. If you are interested in attending one of the 1004MC Workshops, e-mail Kaitlin.Dove@alamode.com or Adam@alamode.com for cities and dates.