FHA Seller Concessions

[Randolph Kinney]

Realtors are the promulgators of concessions. Yes, they want the selling price to be higher (they make more commission and it keeps the value up on closed sales for the next sale) however, the buyer may not have the wherewithal to make it or does not want to pay the listing price so it is a discounting of price that is incorporated into the mortgage rather than having the buyer coming in with more money.

 

[CANative]

I've talked to A LOT of REALTORS® over the years and I've never got the impression that think that way.

 

[Randolph Kinney]

I've talked to A LOT of REALTORS® over the years and I've never got the impression that think that way.

And when you ask a listing or selling agent "what would that property have sold for without the concession" I can image the saying several things, none of which would be helpful, must less polite.

Which is it? Not helpful, not polite or Realtors are in favor of concession?

 

[CANative]

Stop acting like a little girl pouting on the playground.

 

[bnmappraisal]

Realtors are the promulgators of concessions.

I tend to agree with this. obviously it's not ALL agents, etc ... but concessions (FHA, CONV, VA) seem to be a negotiating tool that agents have "in their toolbox."

I'm definitely not trying to get in between either of you (RK & CAN) but just throwing out my $0.02 - but I do think agents use this "to their advantage" and leave us in the wind to "sort it out"

Generally speaking, I think most AMC/lenders/FHA (I don't do VA) just "like to see some adjustment" if there are concessions. If you don't make adjustments, just make sure you write up a nice explanation

 

[CANative]

I'm over it.

It's much easier to make an adjustment at the same rate as the seller concession (for things like closing costs) because there is virtually no way to criticize it on review. Not adjusting or making some sort of "market based" argument is just asking for criticism and demands for support (which is basically non-existent.)

 

[nicholz12]

I've asked seasoned realtors... why can't you get a deal together without concessions... some of them replied... most of the buyers they work with don't have the money that is... no down payment and can't afford the closing costs. Others replied... that's how it is now a days, buyers expect and demand that the sellers shell out money for closing costs.
Buyers for the most part are broke, no savings, no back up money. Why they want to buy house is beyond me... can't afford a pot to pizzz in.

 

[Elliott]

So what adjustment is appropriate when the Realtor says, "I can't tell you that, on advice of Realtor counsel, its confidential. " Is it appropriate to assume its 3% or is it more appropriate to says, 0. And what happens when 0 wins?

 

[CANative]

One listing showed a $6 concession. So I called to confirm it was 6% and then made a $12,500 downward adjustment.

 

[bnmappraisal]

One listing showed a $6 concession. So I called to confirm it was 6% and then made a $12,500 downward adjustment.

...and that's where the due diligence of actually CALLING and VERIFYING comes into play.

I think many appraiser's would be surprised (maybe not you CAN) at how many agents I speak with and say "I'm just calling about 123 main st and want to verify a couple quick things" and get a response back to the effect of "wow, you guys still do that?"

(Edit: I will say I may not do it on EVERY occasion, but in your example, I definitely would have - $6 vs 6% is a BIG difference! That's why, for the "oh it's already verified on MLS" types I wanted to say that)