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  #11  
Old 04-25-2012, 06:29 PM
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NC Appraising NC Appraising is offline
 
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From the Appraisal Foundation:

Warning: This will go over Skippy's head and will make it spin. Professional appraisers only.

https://appraisalfoundation.sharefil...ce8786d814836b
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  #12  
Old 04-25-2012, 08:58 PM
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Thanks guys. This was extremely enlightening. I have always thought seller concessions should be adjusted for and do so regularly. And yes I have come up short on the purchase price more than once on new construction homes. My job is to give an honest opinion of value for the lender, not to make the deal work. This is the best data anyone has ever "shared" with me on the subject. I appreciate it very much.
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  #13  
Old 04-26-2012, 02:59 AM
Pat Butler Pat Butler is offline
 
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It all starts with the definition of seller concessions. I think what Fannie is trying to do is to deliniate between expenses that are ordinarily paid for by sellers in a particular market-- like perhaps paying for a survey or termite inspection, versus flat out paying a lump sum to the buyer to assist with financing or affordability.
  #14  
Old 04-26-2012, 09:41 AM
Scott FL Scott FL is offline
 
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A perfect description of typical, traditional seller paid closing costs is offered by the original poster followed by a plea to support an incorrect position for analysis of concessions.

The definition of “concessions” is not equal to the definition of “typical, traditional seller paid closing costs.”

Concessions may be numerically equal to “seller paid closing costs” but concessions do not equal “typical, traditional seller paid closing costs” numerically or by definition.
  #15  
Old 04-29-2012, 11:57 AM
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Quote:
Originally Posted by Scott FL View Post
A perfect description of typical, traditional seller paid closing costs is offered by the original poster followed by a plea to support an incorrect position for analysis of concessions.

The definition of “concessions” is not equal to the definition of “typical, traditional seller paid closing costs.”

Concessions may be numerically equal to “seller paid closing costs” but concessions do not equal “typical, traditional seller paid closing costs” numerically or by definition.

Scott. I respectfully disagree. IMHO, the builder/seller is offering settlement assistance and it does impact the price a potential buyer would pay for the property.


288
Settlement Assistance or Seller Contributions

289 The most common type of seller concession is settlement assistance to the buyer. Settlement

290 assistance exists when the seller pays any fees or costs other than what is generally paid by a

291 seller as a result of tradition or law and are found on virtually all sales transactions. The sellers
292 payment of items such as: loan origination fees, appraisal fees, attorney fees, loan application
293 fees, credit report fees, survey fees, fees for preparation of loan documents, fees for
294 photocopying easements and restrictions, mortgage title policy, loan-related inspection fees, and
295 recording fees, would all be considered concessionary in nature. These fees, when paid by the
296 seller, are considered to be concessionary in nature if they are not paid by the seller as a result of
297 convention or law on virtually all sale transactions.






298 Settlement assistance is similar to “loan discount points paid by the seller” as it is a sum-certain

299 amount generally agreed upon during contract negotiations. It is reasonable to conclude that
300 payment of this type concession or lack thereof would have been a deciding factor and most
301 likely impacted the price the seller was willing to accept. As such, the impact of said concession
302 may be at least equal to the actual dollar amount of the concession.






303 To determine the impact of settlement assistance on the contract price of a comparable sale, the

304 appraiser may rely on deductive reasoning (along with the appropriate verification) or an





305 interview with one of the agents or other parties to the sale.






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  #16  
Old 04-29-2012, 02:18 PM
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Last edited by residentialguy : 04-29-2012 at 09:17 PM.
  #17  
Old 04-29-2012, 03:38 PM
melissa995 melissa995 is offline
 
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http://www.hagarinstitute.com/index....e-classes.html- Defining Market Value and How to adjust for concession.
Reporting "Market Value" is at the core of every appraisal. Failure to appraise at this value is a felony. Understanding Concessions are a critical part of determing value. This class will help the appraiser understand the process and how to properly create an appraisal.

Well worth $25.00 on line. and if you look up the instructor he is heavily involved with appraisal fraud investigation
  #18  
Old 04-29-2012, 07:19 PM
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Renee Healion Renee Healion is offline
 
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Agents here have been counseled that revealing concessions is a violation of confidentiality so that door is now shut. Closings here are done with attorneys and they aren't talking. The best you can get now is when the MLS shows the closing price to be lower than the sales price in the land records. That happens because some agents only "see" the amount their commission is based on (no commission on concessions). That is a clue, not something to hang an adjustment decision on.

If we are returning to times of private financing, then the good thing is those notes are recorded in order to be enforceable and we can read the terms. If there are unusual terms in institutional notes then the same research would reveal it.

But that is about it for sources. No one is requiring disclosure of the information we need from those who are privy to it and there is legal advice for some of the sources NOT to report it. But it would be our felony?
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  #19  
Old 04-29-2012, 09:15 PM
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Quote:
Originally Posted by melissa995 View Post
Well worth $25.00 on line. and if you look up the instructor he is heavily involved with appraisal fraud investigation
So what did Hagar have to say about it?
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  #20  
Old 04-29-2012, 09:29 PM
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Richard Hagar will be in Phoenix this coming Weds and Thurs May 2nd and 3rd. His seminars are always very interesting and he provides good information. The weather is beautiful right now--come see us!
Attached Files
File Type: pdf Special Appraiser Education-Arizona.pdf (79.7 KB, 2 views)
File Type: pdf Guest Speakers for next week.pdf (79.3 KB, 1 views)
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