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Confused About Stupid Seller Paid Concessions

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Sean Sutton

Senior Member
Joined
Jun 19, 2006
Professional Status
Certified Residential Appraiser
State
Missouri
Cookie cutter subdivision....All five sales are FHA/USDA with $3K-$4K seller paid closing costs.

Subject ALSO has $3,500 is seller paids.

The appraisal is not coming in due to all the comps seller paid concessions.

What would you do.
 

residentialguy

Elite Member
Joined
Mar 24, 2009
Professional Status
Certified Residential Appraiser
State
Minnesota
Report the correct value and explain that the sale price was affect by the concessions, thus was over market value. On a side note, $3,500 is a very small amount. Do all the comps adjust under the sale price? How about your pending sales? What are they selling for (verified amount after concession adjustment)
 

residentialguy

Elite Member
Joined
Mar 24, 2009
Professional Status
Certified Residential Appraiser
State
Minnesota
The comparable sales should be adjusted only for the effect of the concessions. What would the properties have sold for without the concessions?
Tim has a good point. Did you call the listing agent and ask them if the seller would have sold for $3-$4k less if they didn't have to pay out $3-$4k from their pocket? 99.99% of the time they would, of course...but there's always that .01% chance.
 
D

Deleted member 134708

Guest
I pretty much never see concessions affecting a sales price. Would sold that price no matter. I explain sales price (not net to buyer) was analyzed and no affect.

Agents say they had offers much higher but went with this one cause they liked buyer or loan more likely to thru etc.
 

Howard Klahr

Senior Member
Joined
Oct 4, 2004
Professional Status
Certified General Appraiser
State
Florida
Have you read the definition of value in your report?

*Adjustments to the comparables must be made for special or creative financing or sales concessions. No adjustments are
necessary for those costs which are normally paid by sellers as a result of tradition or law in a market area; these costs are
readily identifiable since the seller pays these costs in virtually all sales transactions.
 

residentialguy

Elite Member
Joined
Mar 24, 2009
Professional Status
Certified Residential Appraiser
State
Minnesota
I pretty much never see concessions affecting a sales price. Would sold that price no matter. I explain sales price (not net to buyer) was analyzed and no affect..
Are you trying to tell me that if the buyer went to the seller and said, "I was able to get $4k, so lets lower the price $4k and you won't have to pay out $4k extra out of your pocket for closing" That the seller would say "NO"??? Sorry. No reasonable person would do that. Your analysis is off.
 
D

Deleted member 134708

Guest
My neighbor just sold their house $10k lower than a solid offer because it was cash.

Closing time of 15 days v 45 had an affect on the final sales price of $10k.

Are you going to adjust up my neighbors home $10k or just ignore it because FNMA doesn't like positive adjustments on that line. (You can do +, they just don't like it)
 

residentialguy

Elite Member
Joined
Mar 24, 2009
Professional Status
Certified Residential Appraiser
State
Minnesota
As long as the conditions of sale were in line of the conditions set in MV, why would you adjust up $10k on a cash sale???

If they needed a quick close, then you have support to adjust.
 
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