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Lender Wants Sales Contract Reduction Reported As A Sales Concession

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hossie

Freshman Member
Joined
Mar 10, 2010
Professional Status
Certified Residential Appraiser
State
California
I am doing a new housing tract report. Normally the builder offers an $8000.00 concession/credit for using a preferred lender. They also offered an additional $1000.00 for being a repeat buyer for this builder . When this happens I always state it on page one in the "financial assistance" area along with other verbiage. However, in this case, the builder agreed with the borrower's request to lower (discount) the price by $9000.00 instead of taking the credit. This was done prior to my inspection/effective date. Now the lender wants me to amend the report to show the reduction in the financial assistance area as a seller credit of $9000.00.

The official amendment from the builder says: "Sales Price Reduced by Price Concession....$9000.00". To me this simply haggling over the price which I believe is different from a concession.

Any thoughts?
 

Terrel L. Shields

Elite Member
Gold Supporting Member
Joined
May 2, 2002
Professional Status
Certified General Appraiser
State
Arkansas
The cash equivalence price should not include concessions. If your comps have those credits then they needed to have been adjusted to cash... But it is not an additive to the subject. Adjust comps to CASH equivalence.
 

J Grant

Elite Member
Joined
Dec 9, 2003
Professional Status
Certified Residential Appraiser
State
Florida
Just write what the builder wrote and what the sales contract amendment now says. The builder reduced the price by 9k , amount reduced by amount of what was a 9k concession when sales price was X$.
 

leelansford

Elite Member
Joined
Mar 29, 2002
Professional Status
Certified Residential Appraiser
State
Illinois
I am doing a new housing tract report. Normally the builder offers an $8000.00 concession/credit for using a preferred lender. They also offered an additional $1000.00 for being a repeat buyer for this builder . When this happens I always state it on page one in the "financial assistance" area along with other verbiage. However, in this case, the builder agreed with the borrower's request to lower (discount) the price by $9000.00 instead of taking the credit. This was done prior to my inspection/effective date. Now the lender wants me to amend the report to show the reduction in the financial assistance area as a seller credit of $9000.00.

The official amendment from the builder says: "Sales Price Reduced by Price Concession....$9000.00". To me this simply haggling over the price which I believe is different from a concession.

Any thoughts?

You are correct.
 
D

Deleted member 134708

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I am doing a new housing tract report. Normally the builder offers an $8000.00 concession/credit for using a preferred lender. They also offered an additional $1000.00 for being a repeat buyer for this builder . When this happens I always state it on page one in the "financial assistance" area along with other verbiage. However, in this case, the builder agreed with the borrower's request to lower (discount) the price by $9000.00 instead of taking the credit. This was done prior to my inspection/effective date. Now the lender wants me to amend the report to show the reduction in the financial assistance area as a seller credit of $9000.00.

The official amendment from the builder says: "Sales Price Reduced by Price Concession....$9000.00". To me this simply haggling over the price which I believe is different from a concession.

Any thoughts?

I don’t have hard stance either way. Your way fine.

Huge problem with appraisal forms and the rest of the world.

Technically the builder is correct. They gave “financial assistance” This is a fact. If they didn’t, this sale would of never went thru.

So in the real world they are correct. In the Appraisal world? Probably not which is a huge problem. The world and Appraisers on 2 separate set of rules and nomenclature.

Financial assistance means just that. But in the Appraisal world that’s not what it means at times.

Good luck. I wouldn’t knock you for real world way or appraiser way.
 

leelansford

Elite Member
Joined
Mar 29, 2002
Professional Status
Certified Residential Appraiser
State
Illinois
The seller agreeing with the buyer to a certain price--this is NOT a "seller concession". If such were a concession, most all sales would have a "seller concession".
 
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