Concessions - What % do you adjust?

[Lee Lansford]

...

Lee, you should quote your article on this matter more often. It's relevant and a good read. "Today, tomorrow, and yesterday"; concessions apply in whole. Or something along those lines.

...

By popular demand :

http://www.idfpr.com/dpr/re/Appraisal.asp

Once there, scroll down the middle menu to "Illinois Appraiser/AMC Newsletter", click-on.

Next, click-on "Archived..."; next, look for the December 2010 edition; see page 6, "Concessions".

 

[Mike Garrett RAA]

On the other hand...do you really need to adjust at all?

 

[Lee Lansford]

On the other hand...do you really need to adjust at all?

EVERYTHING is adjusted.

It's just that, at times, the adjustment is 0.

 

[Michigan CG]

Sale price $120,000, $0 concessions and the seller gets $120,000 while the buyer pays $120,000.

Sale price minus funny math of $5,000 "concession" and the seller gets $115,000 while the buyer pays $115,000.

Not a hard concept. $4$.

 

[William K]

What Can said. A concession is just that. A buyer might say if they had the cash they would buy anyway, but if a frog had a pocket to carry a pistol in he wouldn,t be afraid of snakes. Without the concession the deal don,t happen

:laugh::laugh::laugh:







(The frog better stay out of Illinois, we still don't have conceal carry)

 

[Pilgrum]

So. If 3% is paid for NRCC cost for the subject and ALL the comparables do you still make a $4$ adjustment? Or a percentage adjustment? Or none at all?

 

[CANative]

I look at each sale. If comp 1 sold for $200,000 and there was a 3% concession for financing I'd adjust downward by $6,000. If comp 2 sold for $250,000 with a 3% adjustment for NRCC I'd adjust downward by $7,500.

 

[Kim Whiting]

If the seller gives 3400 in concessions they evidently didnt mind their net being 3400 less. without the concession then, the seller would have taken 3400 less than offered if they had any sense and could do math. it works out the same. it's 100%.

 

[CANative]

2%, 3%, 4% concessions. What difference does it make? It's probably less than the margin of error caused by market noise and the skills present in the negotiation stage of buying and selling a home.

The adjustment is to make Fannie happy so you have to make it. Might as well use the stated amount of the concession because it is an easy to understand and easy to explain adjustment and it's very defendable.

 

[George Ellerman]

What Can said. A concession is just that. A buyer might say if they had the cash they would buy anyway, but if a frog had a pocket to carry a pistol in he wouldn,t be afraid of snakes. Without the concession the deal don,t happen

frogs? pistols? snakes?

:new_smile-l: