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negotiation adjustment

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Renee Borne

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Junior Member
Joined
Jan 5, 2005
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Licensed Appraiser
State
Arizona
The lender require 2 active listings so I gave it to them for information purposes only as noted in the report. Now some reviewer asked me if I would consider doing a negotiation adjustment? what is this? I have never heard of this. Is there a way to calculate it? I already told them no but I would be interested in knowing what this is.

Thanks
 

xmtpedprl

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Dec 6, 2005
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General Public
State
Florida
Perhaps 'Negotiation Adjustment' = 'Concession' to the untrained person making the request...?

(Or, as someone here so aptly called it, a 'Kickback!')

Or maybe they mean for you to do a little 'Forecasting' on your report, as we're doing for most everything in Central Arizona at the moment.

In any event, I've never heard of such a thing.

Dave...
 

Mark to market

Junior Member
Joined
Nov 14, 2004
Professional Status
Certified Residential Appraiser
State
New Mexico
The lender require 2 active listings so I gave it to them for information purposes only as noted in the report. Now some reviewer asked me if I would consider doing a negotiation adjustment? what is this? I have never heard of this. Is there a way to calculate it? I already told them no but I would be interested in knowing what this is.

Thanks

I think what they are asking for is that you provide a common asking to selling price adjustment.

For instance, if it is common in that area for sales to be 4% lower then the asking price then on an active home that is priced at 100K you would figure in a 4K adjustment
 

xmtpedprl

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Dec 6, 2005
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General Public
State
Florida
Oh, I like that. We do that for all listings we put on the appraisal grid, but heck, we don't call call it by that name, so no bells & whistles went off! Duh!

Good call, I'll bet that's it.

Dave...
 

CANative

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Jun 18, 2003
Professional Status
Retired Appraiser
State
California
Sales price to list price ratio. Very easy to figure from MLS.

I think Mark hit the nail on the head.
 

Renee Borne

Thread Starter
Junior Member
Joined
Jan 5, 2005
Professional Status
Licensed Appraiser
State
Arizona
Thanks everyone. greg, what numbers would you use? how many months sales, etc, would you use an average sale price and what formula would you use to get the ratio? This is new to me and any help is appreciated.
 

CANative

Elite Member
Joined
Jun 18, 2003
Professional Status
Retired Appraiser
State
California
Sometimes the SP/LP ratio is stated right in the MLS printout (94.1%, 95%, 93.4%, 100%, 98.2%) In that set it seems like 95% can be considered a bracket so you might make a -5% adjsutment to the listing price of the listing comp. I consider whether or not the listing is still within the range of exposure time.

If MLS doesn't disclose SP/LP as a percentage than just do the math (LP divide by SP or vice versa??).
 

hastalavista

Elite Member
Joined
May 16, 2005
Professional Status
Certified General Appraiser
State
California
If the listings haven't moved, I'll call the agents and ask them if they've received any offers and if so, where were they in relationship to the list price.

Many times the agents will give good feedback and indicate the property could sell at X% less than the list.
 

Mike Boyd

Elite Member
Joined
Jan 18, 2002
Professional Status
Retired Appraiser
State
California
I think what they are asking for is that you provide a common asking to selling price adjustment.

For instance, if it is common in that area for sales to be 4% lower then the asking price then on an active home that is priced at 100K you would figure in a 4K adjustment

I agree that is what they are probably looking for. However, my crystal ball is not in good shape and I would be reluctant to do that. However, I understand that on relo appraisals it is common and why I don't do relo work.
 

Renee Borne

Thread Starter
Junior Member
Joined
Jan 5, 2005
Professional Status
Licensed Appraiser
State
Arizona
Greg: I could not find that ratio on my MLS so I called them and they do not provide it. How do you get the sets? SP/LP ratio. I see you have 5 sets what search parameters do I use? Thanks
 
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