Confused About Stupid Seller Paid Concessions

[Deleted member 130081]

I credit the misunderstanding you had as not being able to see the forest through the cheese.

ya sure ya betcha!

 

[norapp]

If a concession is around 2% of sale price or under, it is very difficult to tease out if it was an influence on sales price unless the property and the comps have a high degree of conformity. In my area, realtors and loan agents typically manipulate a sales price percent or so in order to accomodate a seller concesion. They usually withold contract addendums re concessions until after the appraiser has submitted the report. It is kind of hard for an appraiser to retrospectively say a 1% concession had an affect on sales price! As long as it is up to us to determine if a concession has influenced a sales price, realtors will continue to play their tricks. Ultimately, the FNMA should step in and mandate that concessions over say a 3-4% benchmark are inducements and not allowed. That would help curb the abuse.

Are you saying you get one copy of a contract from the lender without concessions and another replaces it after the appraisal??? That's fraud and illegal.

 

[Pat Butler]

In our state, we have a property tax declaration form that has to be filled out at closing. Among other things, it identifies the parties to sales transaction and provides financial information about the transaction so that the assessor has updated data. Concessions are listed on that form. The buyer and seller and their attorneys have to sign that form, so it's pretty much honest because the attorneys don't want to commit fraud.

Furthermore, the buyer doesn't want to pay higher property taxes, so the buyer will make sure that the concessions are honestly reported. If I see that the numbers on that form don't coincide with what was reported in the MLS, then that's when I start making phone calls to the agents to see what the truth was, or else, won't use that property as a comp.