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Deleted member 130081
Guest
LOL...ok...apparently you want to go toe to toe.
Let's hope you can learn, but with your haughty attitude, I won't hold my breath. I'll keep myself open to learning. I'll cut and paste, as you suggested.
So lets start with your notion about the market being typical making a difference.
This is incorrect with regards to Fannie Mae and Market Value, as defined.
The definition of Market Value states:"(6) The price represents the normal consideration for the property sold unaffected by special or creative financing or sales concessions* granted by anyone associated with the sale." In other words, if it inflated the price, it has to be adjusted so that it reflects a price without concessions inflating it.
Reading further, FNMA gives more clarity to sales concessions; Nowhere will you find it mentioned or even suggested that no adjustments are necessary for seller concessions if they are "typical" in the market, but rather only when they:"are normally paid by sellers as a result of tradition or law in a market area" . This doesn't mean typical. It means every sale the seller will pay concessions. There is no such tradition or law in any market area. Then it gives further clarity saying "these are identifiable since the seller pays these costs in virtually all sales transactions." No market has seller paid concessions present in virtually all sales, therefore it is clear that concessions, even when typical, still need to be adjusted if they result in a different price had the seller not paid them.
Let's see what else FNMA requires. The following excerpt from the Selling Guide, Part XI, Section 406.5 (C) provides further guidance for these circumstances: “The need to make negative dollar adjustments for sales and financing concessions and the amount of the adjustments to the comparable sales are NOT based on how typical the concessions might be for a segment of the market area—large sales concessions can be relatively typical in a particular segment of the market and still result in sale prices that reflect more than the value of the real estate'
Therefore, if concessions are typical, it doesn't matter!!! If they affected the sale price, then you adjust...even when 90% of all the other sales have concessions.
Now. Let's talk about your assertion that "concessions ALWAYS inflate the price".
If that were the case, then FNMA would have instructed us to make a mechanical adjustment, because FNMA Selling Guide, Part XI, Section 406.5 (C) states that "The adjustments must reflect the difference between what the comparables actually sold for with the sales concessions and what they would have sold for without the concessions". According to you, it always inflates the price, therefore if that were the case, we should adjust automatically on every concession...but they stated the opposite. They state "Any adjustment should not be calculated on a mechanical dollar for dollar cost." Hmmmm....Ooops
Therefore, it can only be concluded that concessions don't always inflate the price. And I have run into situations and verified where they didn't inflate the price. So, like I said above. You're wrong.
Hopefully you can wrap your head around what is essentially a pretty simple concept, as I showed above.
You're right, I'm wrong. In fact, I couldn't be more wrong. (O I aint so haughty, just believe in myself is all.) After I suggested we cut and paste the MV definition, I went back and took a hard look at the MV definition myself. I realized I was taking the part about "normal" and "traditional" costs out of context and was considering if concessions could be considered normal or traditional costs. After re-reading all of the posts on this thread, I realize I am not the only one doing that (though we are in the minority). Its still a simple concept, however reading the directions helps! I was going to write a redaction and direct the OP that you are in fact on the right page with this, but you beat me to it. I appreciate you taking the time anyways - thanks.
