• Welcome to AppraisersForum.com, the premier online  community for the discussion of real estate appraisal. Register a free account to be able to post and unlock additional forums and features.

Cash Equivalency

Status
Not open for further replies.

D LANA

Freshman Member
Joined
Aug 20, 2007
Professional Status
Licensed Appraiser
State
Michigan
If a house sold for $100,000 and the buyer putting 10% down and there is a 6% sellers concession, what is the cash equivalence?
 

PropertyEconomics

Elite Member
Joined
Jun 19, 2007
Professional Status
Certified General Appraiser
State
New Mexico
If a house sold for $100,000 and the buyer putting 10% down and there is a 6% sellers concession, what is the cash equivalence?


How much cash did the seller receive at closing? Then you have the answer to your question.
Cash equivalency reflects the gross amount of cash the seller would have received in a transaction that was unaffected by any creative financing, ie what the market would have borne for the property had there been no special financing considered. Net cash, after payment of fees and commissions is not a consideration.

What is typical within your market?
 
Last edited:

Restrain

Elite Member
Joined
Jan 22, 2002
Professional Status
Certified General Appraiser
State
Florida
Cash equivalency is NOT a mathmatical calculation. It can only be measured by what a property will bring IN THE MARKET on the basis of a cash transaction. That's why cash equivalency was abandoned after being tried on the old 41B form.
 

Howard Klahr

Senior Member
Joined
Oct 4, 2004
Professional Status
Certified General Appraiser
State
Florida
Cash equivalency relates to an adjustment attributable to "non-market" terms or a price influenced by favorable loan terms. The value associated with the favorable financing terms is a non realty interest in the property.

The amount of down payment can be part of the analysis for a cash equivalency adjustment, although the real estate commission would not be a factor. There is however not enough infomation provided to perform an analysis of cash equivalency.
 

CURT VAN HOOSER

Senior Member
Joined
Nov 3, 2003
Professional Status
Licensed Appraiser
State
California
D Lana, it appears your husband is still working on his appraisers exam. If so, there may be more to this question than you are relaying. Why not just pose the exact question, with possible answers, and any example commentary?
 
Status
Not open for further replies.
Find a Real Estate Appraiser - Enter Zip Code

Copyright © 2000-, AppraisersForum.com, All Rights Reserved
AppraisersForum.com is proudly hosted by the folks at
AppraiserSites.com
Top

AdBlock Detected

We get it, advertisements are annoying!

Sure, ad-blocking software does a great job at blocking ads, but it also blocks useful features of our website. For the best site experience please disable your AdBlocker.

I've Disabled AdBlock
No Thanks