Concessions

[Dale Floyd]

With the settlement of the lawsuit pertaining to Buyer Agent Commissions, I'm seeing several different ways to account for it in sale contracts.

I have opinions, but I'd really like to hear your thoughts and I'm hearing a ton of opinions from other thinkers.

When the contract stipulates that either the seller or listing agent will contribute some percentage to the buyer agent commission, are you calling that a concession?

When the contract stipulates that the seller is contributing a dollar amount, including the buyer's commission, are you calling that a concession?

When the sale price has been raised to accommodate the buyer agent commission, and it's being paid by the seller from proceeds, are you calling that a concession?

 

[Tom D]

The few that i have seen have been coming in less that 6% total of price, so it's not a lender issue. However, the normal buyer cannot afford to pay settlement costs & agent fee. I do break it on the appraisal.

Since we take off concessions from the comps, i assume that was an added increase in sale price. In which case i don't care how the concessions were handled. Although, not seeing anymore over the listing price sales.

 

[J Grant]

Fannie's letter said it did not count the seller paying a buyer broker share of the commission or commissions as part of the capped concession costs of the transaction (they have another term for it as well). The cap for a party's contribution to closing costs as a concession is capped by a lender, normally at 6%, but there could be leeway of it for more at certain lenders.

I would only call a buyer or seller paid comission as a concessoin if it appeared to have affected the sale pricce above the typical prices that can include comissions.

 

[Larry Phillips]

Good day, The appraiser's concern in preparing the sales comparison grid is to report the price of the property to the buyer. How the seller allocates or uses funds is not important to us unless the use of funds reduces the cost to the buyer. Reporting use of seller funds on 1004 page 1 for a purchase is an extraordinary assumption until it becomes fact at closing. There is no adjustment line for the seller use of funds on page 2 for the subject property; and we do not make adjustments for subject. Sales comparison concessions for sellers is a fact on page 2, based on cost to the buyer.

 

[jay trotta]

If there is a supply shortage, a bid war begins, how would anyone look at commissions? How would you support it as a concession?
Just curious

 

[Fernando]

20 years ago when I bought a property and I kept the commission out of the sales price (I was the buyer agent), the stupid listing agent mentioned it in the MLS after the sale.
Assessor got hold of the info and put back the commission back into the new assessed value after my purchase.
I complained to the MLS but nothing.
Over the years, I calculated I paid over $5,000 in property tax because of that.

 

[J Grant]

If there is a supply shortage, a bid war begins, how would anyone look at commissions? How would you support it as a concession?
Just curious

In that case, imo, the higher than typical price is due to the bidding war itself, the commission was simply the commission to the RE agent or agents.

 

[TerryRohrer]

20 years ago when I bought a property and I kept the commission out of the sales price (I was the buyer agent), the stupid listing agent mentioned it in the MLS after the sale.
Assessor got hold of the info and put back the commission back into the new assessed value after my purchase.
I complained to the MLS but nothing.
Over the years, I calculated I paid over $5,000 in property tax because of that.

Liars and theives sometimes get caught.

 

[Steelers74]

Our local MLS removed concessions from their system because after the DOJ settlement, the agents kept confusing the seller concessions entry line with the buyer's agent commission.

 

[Zoe]

I don't count it in sales grid. as a concession. I note it in the comments. That is a concession between real agents and the buyer. Sometimes real estate agent might say I'll take 1%. and pay something else out of my normal commission.