Seller agent is the Borrower

[Tom D]

It's arms length. The seller had some unusal requiremenrs. The agent figured out how to do it the way the seller needed, and the seller got to stay there for 2 more years. The agent got the sale price and the seller sold it with a 2 year lease.

You have to label it as tenant occupied, but it was probable a somewhat distressd seller needing a specific way to close it. Not a typical sale, there is a reason. Why not ask the home owner when you inspect the house. I would be asking questions. You have to analysis the agreement of sale, especiaaly being non typical. There is a hidden seller motivation.

Arm length, but maybe some unusual seller motivation or ditress. Underwriter will ask why you appraised value is higher.

 

[Fernando]

When I worked for the bank, some shady stuff happening I suspect.
A foreclosure and the dad who is a shareholder is buying it.
Another foreclosure being bought by brother of a head department in the bank. I wanted to buy it but overruled because I was a subordinate.
Arms length, I don't know. Kept quiet doing my job.

 

[Mark K]

Remember, NAR members follow a strict Code of Ethics.

LOLOLOLOLOLOL!!!!!!

 

[Fernando]

LOLOLOLOLOLOL!!!!!!

I went to an open house this weekend wearing my appraisal hat. Talked with the listing agent about the prices in area.
When I left, another agent who was looking at the open house there gave me his business card solicitating my business.
Don't blame him. Rather smart of him. I'm always looking for good Realtors or vendors in case I sell my properties. Never know.

 

[Mark K]

Just appraise the property and report what you know and let your client speculate.

From the info provided I'd call it arm's length but it likely doesn't meet the definition of a "market value" sale as we know it due to some apparently high motivation on the part of the seller. So what? Our appraisals are for market value and hence, its likely that your appraised value will be higher than the sales price.

The sale and lease back? Again, no big deal. Put that info into the report and let the lender decide if its owner occupied or tenant occupied. The loan terms may vary depending O-O or a rental property. Include the lease amount being provided back to the seller in the appropriate section. Everything being discussed here has no effect on the appraised value, or at least it shouldn't. The property speaks for itself, the rest is background noise.

And NEVER use this sale as a comp.

 

[Fernando]

Can't recall when agent won't tell me the details of the sale. Ever.
I tell the agent that the appraisal requires details and circumstances of the sale. Knowing the information, I can determine if sale is arms length.

 

[Tom D]

You have the owner for a direct source of info you might need. Don't need no stinking agent.

It essentially is a sale between to separate parties, one of whom is an agent, but not for this sale. Probable didn't charge a fee, a private sale in fact. Got a price discount to make it up, etc.

That is for the analysis part of the agreement of sale, and to explain your higher appraised value.

 

[Elliott]

The contract price is significantly below market value.

Is the contract price about 6% below MV?

 

[sputnam]

Doing a home that is not listed in the MLS database.. According to a phone conversation with the listing agent, the seller did not want to go through process of showing and marketing. Fine. Then I look at the contract and realize that the seller agent is the borrower. The contract price is significantly below market value. I sent an email to the agent/borrower asking if the Seller was atypically motivated and asked him how he got to his valuation on the property. No response. Report the facts that the borrower is the seller agent and that the contact price is below market value, right? I cannot assume a less than arm's length transaction. Nor am I going to speculate in the report about the Borrowers motives, right?

As the appraiser, you should report what you know. Make it more professional... but put what you posted in the report. Your assignment is to find market value, right? Any shennigans around the contract/financing of the subject are reporting issues. They don't impact the market value of the subject.

 

[paperasir]

It's arms length. The seller had some unusal requiremenrs. The agent figured out how to do it the way the seller needed, and the seller got to stay there for 2 more years. The agent got the sale price and the seller sold it with a 2 year lease.

You have to label it as tenant occupied, but it was probable a somewhat distressd seller needing a specific way to close it. Not a typical sale, there is a reason. Why not ask the home owner when you inspect the house. I would be asking questions. You have to analysis the agreement of sale, especiaaly being non typical. There is a hidden seller motivation.

Arm length, but maybe some unusual seller motivation or ditress. Underwriter will ask why you appraised value is higher.

Why would I label it tenant occupied? It will be after closing, but not currently.