Flooring allowance in purchase contract

[RSW]

I still belive that it is a cosmetic issue. If the seller were to give an allowance for the buyer to install the floor coverings would it not be a sales concession? The floor coverings are agreed by the buyer and seller that they are not in average condition. Then why is not the installation a sales concession also. The only difference is, the concession is beng paid before the closing.

 

[Mr Rex]

I still belive that it is a cosmetic issue. If the seller were to give an allowance for the buyer to install the floor coverings would it not be a sales concession? The floor coverings are agreed by the buyer and seller that they are not in average condition. Then why is not the installation a sales concession also. The only difference is, the concession is beng paid before the closing.

You are getting there. Forget the fact that its because the old carpet is worn. Instead, the buyers don't like the sellers perfectly maintained almost new red carpet and want blue. If the seller agrees to an allowance for blue carpet, then the appraisal is subject to new carpet, in this hypothetical case blue. In this case, no difference in market value, but it is part of the contract.

The only difference if the carpet is worn and there is an allowance, is that your value would be based on the new carpet.

 

[RSW]

I see your point but I still have to disagree.

 

[Alexx]

Thank you for all of your comments… I understand that worn flooring is a cosmetic issue, but this flooring is badly soiled. The previous owners had pets that they did not take care of, and the animals urinated all over the house which caused considerable staining and a foul stench. This makes this a sanitation issue, and sanitation issues call for remediation.

Mr. Rex, I believe that you hit the nail on the head. As for the car incentive, I wouldn't include personal property in my appraisal report.

 

[Mr Rex]

I see your point but I still have to disagree.

Scott, you simply need to forget that its FHA, because that is not an issue. The issue is that the buyer has agreed to buy a house with new carpet.

 

[Mary Tiernan]

I guess my biggest question is is the flooring allowance enough to replace all the carpet and tile in the house?

I have seen where sellers will give a couple thousand toward roof repairs, but, it is not enough for the whole roof to be redone.

The purchase agreement gives a seller concession of $XXXX toward new carpet and floor coverings, ok, but does the purchase agreement then state that the new floor coverings will be installed on or before the date of closing?

If the cost of the new carpet and tile is larger than the seller contribution, you have a purchaser who must contribute toward the repair out of their pocket. Now, I would not go to the carpet store and install new carpet and tiling in a house I have not taken ownership of, would you?

I think this is a concession, and should be noted that the purchase agreement said it was for new floor covering.

I also agree the buyer does not tell you how to do the appraisal, you develop a scope of work based on what you and your client discuss.

 

[RSW]

I have been thinking about what you said. I am starting to see your point of view. But, I have a few questions. If the contact says the seller is to replace the floor coverings, is it a sales concession? If it is, is it recorded in the contract section of the appraisal? I may be convinced of your point of view.

 

[Alexx]

I will disclose everything I know about the contract in the appropriate section of the appraisal report.

As for the carpet allowance, the flooring "concession" amount was generated from a flooring contractor's bid, which has been provided to me, and the bid gives a description of what type of flooring will be put where and how much it will cost.

Mary, I'm not trying to cover all the "what ifs". I spoke with the bank, they want a subject to. If the flooring isn't replaced, then it's not my problem. My job is to fill out the appropriate form, and that form will indicate if the required repair has been completed, or if it hasn't.

 

[CANative]

We appraise the property not the contract. If the property needs to have replacement floor covering to meet MPR then subject to. If not then we appraise as is and disclose the terms in the contract.

 

[Alexx]

Man, Greg sumed this thread up in three sentences.