Contract, New Construction

[Surf Cat]

is that how the MB and GSE's do it when waiving the appraisal...

Lol....Robot Dude poking the bear....

 

[Terrel L. Shields]

But...who determined that formula, and why does it pertain to all sales?

That's deed stamps mandated by the state...duh...

But that "X" is different in each county.

Ours is state wide. Was $1.10/K in 72 went to $2.20/K and in 80s to $3.30/K. Oklahoma is $1.50/K and noted on the top of the deed. AR is now adding a separate page that gives the exact sales price and deed stamps (since odd numbers require the deed stamps to be rounded... in any event they have nothing to do with concession. The gross sales price is usually recorded.

 

[ZZGAMAZZ]

if the post-purchase appraisal is lower than the contract price whatever happens because of that, if anything, is not our concern,

I realize that but just wondering if this happens often, or if it is a sign that waivers are being questioned.

 

[J Grant]

I realize that but just wondering if this happens often, or if it is a sign that waivers are being questioned.

I have no idea and I don't care. We need to do our job on the appraisal we are working on.

 

[ZZGAMAZZ]

That's deed stamps mandated by the state...duh...o det

Ours is state wide. Was $1.10/K in 72 went to $2.20/K and in 80s to $3.30/K. Oklahoma is $1.50/K and noted on the top of the deed. AR is now adding a separate page that gives the exact sales price and deed stamps (since odd numbers require the deed stamps to be rounded... in any event they have nothing to do with concession. The gross sales price is usually recorded.

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I realize that the doc stamp doesn't affect concessions. I changed the subject without saying so. Sorry.

So here is the process for the appraiser to obtain confirmation of comp info in a new construction appraisal::

1. APPRAISER EMAILS COMP ADDRESS, LOT#, TRACT#, BUYER NAME [OPT]

2. ESCROW/TITLE SERVICE RESPONDS WITH THE FOLLOWING INFO:

PROPERTY IDENTIFIER, DOCUMENT NUMBER, COE, DOC TRANSFER TAX [DOC STAMP], AMOUNT OF FIRST DEED OF TRUST

EXAMPLE:

IDENTIFIER 1234 SMITH ST/LOT X/TRACT Y
DOCUMENT NUMBER: 2023-SQ393939
CLOSING DATE: 5/1/23
DOC TRANSFER TAX [DOC STAMP]: 656.70
AMOUNT OF 1ST DEED OF TRUST: 585,985/FHA

DOCUMENT PROVIDED BY ESCROW INCLUDES A COMMENT:
"TO CALCULATE APPROXIMATE SALES PRICE USE THE FOLLOWING CALCULATION: Doc transfer fax / 1.1 * 1000.

I'm just trying to understand
---where the Doc Transfer Tax comes from (who assigns it) and what it means,
---why is 1.1 used as the divisor of the Doc Transfer Tax [I think it coresponds with the tax rate.}

The same process is used by 1st American & Fidelity, maybe all title companies.

 

[ZZGAMAZZ]

I have no idea and I don't care. We need to do our job on the appraisal we are working on.

That's the Old Men's Club way of thinking: let's not change anything unless we are forced to do so. I didn't know you belonged to the group.

 

[George Hatch]

You can only change what you're actually doing, not what anyone else is doing. I don't see how acknowledging that fact amounts to backward thinking.

 

[Terrel L. Shields]

here the Doc Transfer Tax comes from (who assigns it) and what it means,

In my state, the Revenue office sells the stamps. So the title company is just doing that job for you most likely. I have transferred property from my half interest to my brother and still had to the revenue office and sign a certification that it was a family transaction (no revenue stamps.) But when I was trustee of the estate of my cousin, the broker and title company handled that. I only signed docs at the title company during closing.

why is 1.1 used as the divisor of the Doc Transfer Tax [I think it coresponds with the tax rate.}

Exactly. Set by the legislature. But I believe in CA, there is a state tax and some counties and cities have transfer taxes. And the CA tax is actually set at $0.55 per $500....

In Arkansas the rate is $3.30/$1,000 and banks and title companies (the closers) "§ 26-60-109 provides the authority for issuance of documentary stamps on a consignment basis to title companies, banks and savings and loan associations."

 

[J Grant]

That's the Old Men's Club way of thinking: let's not change anything unless we are forced to do so. I didn't know you belonged to the group.

Proud to be a card-carrying member even though I am a female !!

But honestly, it is not about changing anything, it is about competence. You are asking about concessions, and the same instructions in the MV definition apply whether the subject is new construction of a 100-year-old house. The day they change the MV definition I will change whatever I am doing as well...

 

[David S]

Reviewing the Purchase Agreement for a new construction tract SFR, I noticed two interesting items and wonder whether peers are familiar with them:

1) The appraiser cannot make adjustments for Lot Premiums [seems to me to affect the appraiser's Scope of Work]

2) The buyer is not responsible for his offer or the EMD/downpayment if the appraisal Opinion of Value does not support the contract price. [I don't know if all new construction contracts include this type of stipulation.]

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I'm trying to figure out adjustments for differences between the subject incentives and comp incentives for closing costs. If the subject receives $10,000 and a comp receives $15,000, would the adjustment be (+) $5,000 because the comp incentive is $5,000 more, reducing the price by $5,000 less that the subject? I also was told by an appraiser that FNMAE only permits downward comp incentive-based adjustments in the SCA.

Then the Doc Stamp protocol also s intriguing. The formula to determine selling price of a new construction SFR, per various Title offices is:

Doc Stamp divided by 1.1 multiplied by 1000 = Sales Price

But...who determined that formula, and why does it pertain to all sales? Why doesn't title just provide the appraiser with the selling prices rather than the formula? And WHY does every Sales Office provide appraisers with the phone numbers of Title and/or Escrow--when the first call the appraiser has to make is to obtain the email addresses--rather than to provide the appraiser with the email address to make the process more efficient?

I got another situation: In a resale purchase assignment, one comp is cash purchase. I did a pair analysis from nearby sales. It shows cash sale normally get 1%~2% purchase price discount. But when I applied +1% for the concession adjustment, the lender say big no. no since GSE never will accept upward concession.