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What is purchase price

Discussion in 'Urgent - Help Needed' started by zhencai, Oct 14, 2011.

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  1. zhencai

    zhencai Sophomore Member

    0
    May 27, 2003
    Professional Status:
    Certified Residential Appraiser
    State:
    California
    Short sale, contract price $500,000. However, buyer agrees to pay $30,000 to 2nd lien holder. I'm going to explain this but what should I put on page 1, under Contract Price? $500,000 or $530,000? I would think $530,000. Any thoughts?
     
    Last edited: Oct 14, 2011
  2. Obsolescent

    Obsolescent Senior Member

    9
    Jul 6, 2004
    Professional Status:
    Certified Residential Appraiser
    State:
    Illinois
    Contract price is $500,000. The $30,000 is a buyer concession.
     
  3. NORTON

    NORTON Senior Member

    0
    Oct 10, 2007
    Professional Status:
    Certified Residential Appraiser
    State:
    California
    I was of the opinion a concession could reduce payment from borrower and or reduces net proceeds to seller...if so, neither of those situations occurred in this example.
     
  4. Obsolescent

    Obsolescent Senior Member

    9
    Jul 6, 2004
    Professional Status:
    Certified Residential Appraiser
    State:
    Illinois
    I'm thinking a concession can go either way. A seller concession or buyer concession.

    From Webster: Concession: something done or agreed to in order to reach an agreement.
     
  5. NORTON

    NORTON Senior Member

    0
    Oct 10, 2007
    Professional Status:
    Certified Residential Appraiser
    State:
    California
    I see your point now, didn't at first. I'm thinking this situation hasn't experienced any concessions....it merely requires the approval of 2 note holders (sellers) who will grant their approval for 500k & 30k, no concessions involved.
     
  6. Obsolescent

    Obsolescent Senior Member

    9
    Jul 6, 2004
    Professional Status:
    Certified Residential Appraiser
    State:
    Illinois
    Aaah, I see. Point taken.
     
  7. Blueprint

    Blueprint Senior Member

    0
    Aug 25, 2005
    Professional Status:
    Certified Residential Appraiser
    State:
    Oregon
    Contract price is $500K and this is what you report on the appraisal. The concessions need to be reported as buyer concessions and taken into consideration when valuing the property.
     
  8. AnonApprsr

    AnonApprsr Elite Member

    0
    Jan 21, 2008
    Professional Status:
    Certified Residential Appraiser
    State:
    Massachusetts
    What does the P&S list the total price payed, and in what manner? That would be your answer, in my opinion. Either way I think you're ok as long as you explain it. If you're doing this on a 1004 there is enough room to briefly note the situation and point the reader to the addendum. By putting such information on the first page I think you'll be fine whether you put 500 or 530 on the actual line.
     
  9. airphoto

    airphoto Senior Member

    0
    Jan 15, 2002
    Professional Status:
    Retired Appraiser
    State:
    Pennsylvania
    Clarify .. is buyer paying $500,000 and $30,000 of that goes to pay off the second mortgage or is (s)he paying $500,000 to the seller in addition to paying off the second mortgage?
     
  10. BRCJR

    BRCJR Senior Member

    8
    Sep 20, 2005
    Professional Status:
    Licensed Appraiser
    State:
    Virginia
    The above is the question that must be answered.

    Is the second portion of this equation in writing? Are there actually two contracts? or a clause in the first, possibly?

    Typically, leinholders do not just shake hands, in todays world, for an agreement such as indicated.

    I do not see any concessions in this transaction, as presented.

    I see either a sale of 500 or sale of 530 and that appears to be the 64,000 dollar question.

    If I were the buyer, would I be out a total of 500 or 530? If the latter the "contract" is misleading.

    What will be recorded as sale price, legally?
     
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