Privacy issues vs. seller concessions

[Doug Leedy]

How do other appraisers handle seller concessions? Some members of our local MLS will not divulge seller concessions citing privacy issues. Seller concessions are becoming more and more prevalent in our market and can significantly effect the appraised value, but it gets real tough if you can't get the info. A neighboring county puts these concessions in the MLS sold book. What is the proper response to those realtors who will not disclose that information? Thanks in advance for your help.

 

[Marcia Langley]

Doug,

You must live in a non-disclosure state (as I do). You will need to document in your report what efforts you have made to verify concessions. If all your efforts have failed, then that is the best you can do.

More directly to your question, I agree with the agent (regretfully) that they have a confidiality issue with disclosing the terms of the contract on a comp.

However, if you wanted to further explain your need to the agent, you can explain that they would hope for the most complete analysis if you were doing an appraisal on a house they themselves were buying. Lack of reliable concessions data makes for an uneven market analysis for everyone.

It is very hard to continue to make those phone calls to verify data when you know you will either be denied or lied to. I struggle with myself to meet Fannie Mae's requirements in the face of such odds. I have been known to use less than the otherwise optimal comp due to the inability to discover the actual concessions on a sale that shows evidence of having some (ie: FHA financing with a sales price far above list). Sometimes there are not enough sales to have that luxury.

We can only do our best to meet all the needs of the development and then document our efforts.

 

[Webbed Feet]

Mr. Leedy,

You say you understand and thank you very much. Then you call the other agent involved and then call the buyer and seller if you have to until someone coughs it up. If all that fails, the list price is less than the sale price and nobody said it was bid up with competitive offers, invoke a extraordinary assumption the difference was financing concessions and adjust for it. Other than the above about all you can do is follow Ms. Langley's advice and document your efforts on each comparable to obtain the information.

By the way, I often ask such agents just how in the world are they performing accurate CMA analysis for their clients without this information? I'll point out they have to have it just like I do and suggest they consider start placing in their listing contracts the right to disclose sales concessions to real estate professionals for appraisal purposes.

Barry Dayton

 

[xm72mhd]

I encountered an odd situation. MLS sales price $364K, assessor $399.9K. Seller concessions is what they were. Mentioned in the MLS they were not. Heads up guys! $35.9K! That's kind of a lot, I think. I don't think privacy sanctions were ever intended to limit publication of accurate real estate transactions, but that war is not yet over, and I really don't see how the issue can avoid a court's judgment. If we could just get agents to report accurately it would be big help. Then we could argue about who can use the info for what.

Remember the biggest AVM competition will come from MLS and title companies and they have all of that information that the agents are calling "private", and as has been pointed out, they will, and are, using it to their own benefit, which is the very essence of a privacy invasion. 'Course we want to do the same thing. Remember back when appraisers had proprietary info to sell? Going, going, gone and now in the name of privacy. How deep and slimy is the hypocricy of an agent who has what they consider to be private infomation that if withheld misrepresentd ther transaction and that Gramm-Biley prohibits them from divulging it? Talk about ego and clandestine combined. There I go again.

This needs to be fought folks. Along with this idiotic non-disclosure stuff. "course I guess in the non-disclosure paradie appraisers still have a commodity of value to sell. This is nothing more than seemy underside of the agents taking advantage of one more opportunity to fool ya so they can save ya. At their price.

 

[Walter Kirk]

The privacy issue is nonsense, responsible brokers should report the major factors of any transaction. If you can't determine the concessions(if any) you can't use the comparable.

 

[William Casewell]

I think that even in states with "privacy laws" a licensed agent cannot use that as an excuse to not disclose to a licensed appraiser. The agent may not disclose to the general public. There is no realtor client priviledge in any state.