Fannie's Own Statement About Waiver /value Acceptance;

[DWiley]

I do not make an adjustment to a cash sale simply because it is a cash sale!

I only adjust if the fact that they paid cash affected the price. I might ask the RE agent for their input as part of the analysis- did the seller take less, or did the buyer pay more, in their opinion becaue of a cash offer. Some sellers will sell for less because of a fast closing or a sure thing to close. If they paid a reasonable amount less or more using cash, I would not adjust. Only if the price is notably affected.

How does one apply an adjustment for special or creative financing to a cash sale (i.e., a sale with no financing)?

 

[Dublin ohio]

The financing is the first line-item adjustment

How many times have you used that line?

 

[timd354]

I do not make an adjustment to a cash sale simply because it is a cash sale!

I only adjust if the fact that they paid cash affected the price. I might ask the RE agent for their input as part of the analysis- did the seller take less, or did the buyer pay more, in their opinion becaue of a cash offer. Some sellers will sell for less because of a fast closing or a sure thing to close. If they paid a reasonable amount less or more using cash, I would not adjust. Only if the price is notably affected.

Holy cow, you really have no understanding of the MV definition that you are supposedly appraising to, which includes the following:

• payment is made in terms of cash in U.S. dollars or in terms of financial arrangements comparable thereto; and

Thus, if you are making an adjustment to a comparable sale because you believe that the price was affected due to being a cash sale, then you sure as heck are not doing a market value appraisal per the terms of the F/F definition of market value.

 

[J Grant]

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Do Appraisers Adjust for Cash Sales?​

Yes — appraisers can and often do adjust for cash sales, but only when the sale terms differ from normal market conditions and the adjustment is supported by market evidence.

In the sales comparison approach, appraisers start with comparable sales and then make transactional adjustments to reflect any unusual terms that could have influenced the sale price McKissock Learning. A cash sale is considered a transactional factor because it may indicate a faster closing, reduced buyer financing costs, or a seller’s motivation to avoid financing contingencies.

How it’s applied

• Normal market condition: If the cash sale price reflects what the property would have sold for under arm’s‑length, normal financing terms, no adjustment is needed.
• Unusual condition: If the cash sale price is higher (or lower) than what a comparable financed sale would have brought, the appraiser may adjust the cash sale price toward what it would have been under normal financing terms McKissock Learning+1.
• Support: The adjustment must be backed by market data — for example, paired sales analysis showing how similar properties sold with and without cash terms Appraisal Buzz.

Fannie Mae guidance
Fannie Mae’s Adjustments to Comparable Sales section (B4‑1.3‑09) allows for transactional adjustments, including for “conditions of sale” such as cash versus financed transactions Fannie Mae Selling. The key is that the adjustment reflects the market’s reaction to the cash term, not a mechanical dollar‑for‑dollar rule. Appraisers may adjust upward if the cash term added value (e.g., faster closing) or downward if it reduced value (e.g., seller urgency)

 

[CGinMN]

There is no way to tell

Ok, so you deal with similar information gaps in sales that involve appraisals, all without a “low appraisal” MLS indicator.

 

[J Grant]

Holy cow, you really have no understanding of the MV definition that you are supposedly appraising to, which includes the following:

• payment is made in terms of cash in U.S. dollars or in terms of financial arrangements comparable thereto; and

Thus, if you are making an adjustment to a comparable sale because you believe that the price was affected due to being a cash sale, then you sure as heck are not doing a market value appraisal per the terms of the F/F definition of market value.

I just posted the evidence above that cash sales can be adjusted for and are adjusted for in appraisals!! (when they warrant it in market evidence)

The appraiser is not limited to ONLY adjusting for what is named in the MV definition. The financing is one metric, wrt special or creative concessions. However, we are not limited to only that. The appraiser can adjust for anything that occurred which merits an adjustment in a price reaction beyond the reasonable range of the price variances.

The MV definition does not mention adjustment for a bath or a pool, does it? Yet appraiers adjust for those things.

 

[J Grant]

Ok, so you deal with similar information gaps in sales that involve appraisals, all without a “low appraisal” MLS indicator.

There is no gap in information. Why does it matter that the SC price was negotiated down to the appraisal value?

The fact is that an appraisal was performed. In a waiver, no appraisal was performed; therefore, some prices might occur that might not have occurred with an appraisal.

 

[timd354]

When the WAIVERS are granted to the better credit/higher down payment borrowers and to the more conforming properties, and the appraisals are done on the lower-FICO-score borrowers and problem-child properties, then it would stand to reason that the waiver loans would perform better with respect to default or delinquency.

Nearly every property that I have appraised over the past six months has been a problem or difficult property. There are fewer normal properties going to the appraiser now.

It is very easy to assess loan performance controlling for FICO and other loan and borrower attributes, and the data shows unequivocally, that even when controlling for all other loan and borrower attributes, loan performance for loans originated with waivers is actually slightly better than it is for loans with appraisals.

 

[J Grant]

Holy cow, you really have no understanding of the MV definition that you are supposedly appraising to, which includes the following:

• payment is made in terms of cash in U.S. dollars or in terms of financial arrangements comparable thereto; and

Thus, if you are making an adjustment to a comparable sale because you believe that the price was affected due to being a cash sale, then you sure as heck are not doing a market value appraisal per the terms of the F/F definition of market value.

See post 464, I sure as heck am!

You are reading the cash as only the equivalent aspect. BTW, a sale is all cash to the seller at closing, whether financing was used or not.

The cash adjustment is for when the cash affected the price, as explained. A seller might sell low because of a fast closing or the certainty a cash sale represents. That is apart from the cash equivalency aspect. A buyer with deep pockets can overpay using cash due to no appraisal or because the buyer is not limited to more typical budget constraints. That has nothing to do with the cash equivalency aspect.

Spec home builders and property flippers often pay cash due to lending issues with homes needing repair, or to get a quick sale price from an owner.

 

[timd354]

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Do Appraisers Adjust for Cash Sales?​

Yes — appraisers can and often do adjust for cash sales, but only when the sale terms differ from normal market conditions and the adjustment is supported by market evidence.

In the sales comparison approach, appraisers start with comparable sales and then make transactional adjustments to reflect any unusual terms that could have influenced the sale price McKissock Learning. A cash sale is considered a transactional factor because it may indicate a faster closing, reduced buyer financing costs, or a seller’s motivation to avoid financing contingencies.

How it’s applied

• Normal market condition: If the cash sale price reflects what the property would have sold for under arm’s‑length, normal financing terms, no adjustment is needed.
• Unusual condition: If the cash sale price is higher (or lower) than what a comparable financed sale would have brought, the appraiser may adjust the cash sale price toward what it would have been under normal financing terms McKissock Learning+1.
• Support: The adjustment must be backed by market data — for example, paired sales analysis showing how similar properties sold with and without cash terms Appraisal Buzz.

Fannie Mae guidance
Fannie Mae’s Adjustments to Comparable Sales section (B4‑1.3‑09) allows for transactional adjustments, including for “conditions of sale” such as cash versus financed transactions Fannie Mae Selling. The key is that the adjustment reflects the market’s reaction to the cash term, not a mechanical dollar‑for‑dollar rule. Appraisers may adjust upward if the cash term added value (e.g., faster closing) or downward if it reduced value (e.g., seller urgency)

Congratulations, you found some AI nonsense in which the AI response is completely and utterly wrong and posted it like it is the gospel truth.

Did you bother to click on the link provided by AI that supposedly is the source for what AI is telling you about cash adjustments to check the veracity of what it stated? Per your post AI stated "Yes — appraisers can and often do adjust for cash sales, but only when the sale terms differ from normal market conditions and the adjustment is supported by market evidence." and "Unusual condition: If the cash sale price is higher (or lower) than what a comparable financed sale would have brought, the appraiser may adjust the cash sale price toward what it would have been under normal financing terms" and then AI provides a link to McKissock Learning as the source for these statements.

I clicked on the link to Mckissock provide by AI, and not surprisingly the McKissock web page referenced by AI makes none of the statements attributed to it by AI and nothing on the McKissock web page referenced by AI could reasonably be interpreted to support the statements made by AI regarding adjsuting for cash sales.

It is really quite amazing how often and how willing many people are just willing to accept whatever answer AI posts without bothering to vet whether the answer is really true or not.