Contract, New Construction

[alebrewer]

Case in point: the following scenario is presented for consideration:



Note that, if I adjust Comp1 for concessions, it will now have an adjusted price of $230,000, which would be artificially lowering Comp1's adjusted price, as - clearly - the concession didn't impact the sales price. In this case, I would not adjust for the concession. Again, though - others gotta do what they think is right. I'm just telling you how we are required to adjust IF we are reporting on the F/F forms.

 

[J Grant]

Yes it is - that's the true sale price - net to seller and that includes the RE commission. Absolutely. Otherwise it's the old "I sold my coon hound for $1200 but I had to take 10 $100 barn cats in on the trade" problem.

Oh goody for you, since you invented the word the "true sale price"- according to Terrel

The recorded actual, fact-based numerical sale prices of properties do not reflect the net to the seller. They can reflect that a commission was included of course.


The recorded and paid at closing sale price of two transactions: : both sold for 100k. In one transaction, the seller netted 80k, in the other transaction the seller netted 97k. So explain how when both prices are the same 100k , it has anything to do with a "true sale price" concerning a different net $ amount a seller received..

 

[Mark K]

.... any adjustment should approximate the market’s reaction to the financing or concessions based on the appraiser’s judgment

Above on the URAR certs and lining conditions - since that comprises the bulk of lending assignments -I assume folks on the board can read English?

The market's reaction to a $ is a $. EVERY buyer and seller knows this. Every broker knows this and adjusts purchase agreements accordingly.

Some appraisers think they know more than the market participants about their motivations and the value of a dollar in a transaction and want to try to divine some some F/F pleasing formula to help artificially inflate appraised values. Just keep doing what you're doing and your F/F Overlords will be happy.

 

[J Grant]

The market's reaction to a $ is a $. EVERY buyer and seller knows this. Every broker knows this and adjusts purchase agreements accordingly.

Some appraisers think they know more than the market participants about their motivations and the value of a dollar in a transaction and want to try to divine some some F/F pleasing formula to help artificially inflate appraised values. Just keep doing what you're doing and your F/F Overlords will be happy.

You are giving advice that goes against the certs and instructions of the statement about concession adjustments in the URAR report an appraiser signs. Then again, you said you do not do URAR assignments, correct? You are giving misleading advice to appraisers who do that work and stating it, being arrogant and condescending about it on top of it.

And giving this misleading advice so arrogantly and condescendingly on top of it.

EVERY broker, buyer and seller in the entire nation knows it ( according to you ). Well assuming they do know it, and, "adjust purchase agreements accordingly" (whatever that means ) We are the APPRAISER and OUR instructions on the issue of concessions are germane to our profession. .

Go on and keep misleading fellow appraisers about it,, I can't stop you . I can identify when I see some not caring if they hurt others doing a certain line of work that they themselves do not practice.

 

[Terrel L. Shields]

since you invented the word the "true sale price"- according to Terrel

It is the actual market value by AIG standards. FNMA does not own the words "market value" nor do they own the only definition.

divine some some F/F pleasing formula to help artificially inflate appraised values.

which is exactly the impact of such inflations - the banks are mite more nuanced and recognize that a concession is just that - a concession, be it cash, making payments for you, or giving you a big boat for the garage.

 

[J Grant]

Sometimes a net to seller wrt a concession is see to have affected the price; other times it does not. We are not asked about net to seller, we are asked did the concession affected the price, as compared to other prices without concessions ( the market reaction)

The net $ amount at closing to a seller reflects many different things, It may not always be possible even to understand what effect the concession itself had on a seller -- their net includes mortgage payoffs, did they pay commission, closing fees, liens, outstanding taxes plus - any other mis c charges and then a concession if they offered one.

 

[Terrel L. Shields]

we are asked did the concession affected the price, as compared to other prices without concessions ( the market reaction)

And it invariably does. Or, to reverse. What would the price be if no concession was made. Well, who knows because 9 of 10 times without the concession the buyers cannot execute the contract for lack of money to bring to the table....therefore, it won't really meet the test of "cash" equivalence. Cash on the barrel head is cash on the barrel head not creative financing.

 

[Mark K]

You are giving advice that goes against the certs and instructions of the statement about concession adjustments in the URAR report an appraiser signs. Then again, you said you do not do URAR assignments, correct? You are giving misleading advice to appraisers who do that work and stating it, being arrogant and condescending about it on top of it.

I appraised approx. 8,000 SFR for F/F prior to moving in another direction. I think that gives me enough experience to opine on the subject. And yes, I signed that same statement and adjusted every one on a $4$ basis for concessions.

BTW, this is the exact method required by this state's appraisal commission.

Pretending that concessions have anything other than a $4$ effect is one of the points often noted when the board writes up complaints vs. the Defendant. Making a typical BS statement like..."concessions less than 2% have no effect on the value..." or "...the MLS indicated $4,000 in concessions but this had no effect on the market value" is a sure way to get you to explain to the Board why you've allowed F/F guidelines to override common sense.

Go on and keep misleading fellow appraisers about it,,

I will leave that to you. Your inability to understand that a $ is worth a $ to virtually everyone on the planet and then trying to convince people otherwise is the height of arrogance, not to mention ignorance.

 

[J Grant]

And it invariably does. Or, to reverse. What would the price be if no concession was made. Well, who knows because 9 of 10 times without the concession the buyers cannot execute the contract for lack of money to bring to the table....therefore, it won't really meet the test of "cash" equivalence. Cash on the barrel head is cash on the barrel head not creative financing.

That is NOT the question!! A theoretical what if - what would the price be without the concession? A seller would likely tell you what you want to hear, but that is still not the answer we need.

The pertinent appraisal question wrt concessions is did it affect the price, as compared to the prices of similar properties sold without a concession. Regardless of what any individual seller tells you what their price would been,. Maybe they wouldn't; have sold the house at all, or at least not in that time frame. The price speaks for itself anyway.

 

[J Grant]

I appraised approx. 8,000 SFR for F/F prior to moving in another direction. I think that gives me enough experience to opine on the subject. And yes, I signed that same statement and adjusted every one on a $4$ basis for concessions.

BTW, this is the exact method required by this state's appraisal commission.

Pretending that concessions have anything other than a $4$ effect is one of the points often noted when the board writes up complaints vs. the Defendant. Making a typical BS statement like..."concessions less than 2% have no effect on the value..." or "...the MLS indicated $4,000 in concessions but this had no effect on the market value" is a sure way to get you to explain to the Board why you've allowed F/F guidelines to override common sense.



I will leave that to you. Your inability to understand that a $ is worth a $ to virtually everyone on the planet and then trying to convince people otherwise is the height of arrogance, not to mention ignorance.

Mr condesecending.. I very well understand what $ to $ is worth, but you seem unable to understand that in the market it is not always $ for $ in prices, and in addition that is not our instructions. You don't; even do lending work and here you are acting lecturing about it..