• Welcome to AppraisersForum.com, the premier online community for the discussion of real estate appraisal. Register a free account to be able to post and unlock additional forums and features.

Positive Adjustment on Seller Concessions

Status
Not open for further replies.
What most here just don't topic on is the new trend of devaluing dollar.

It's happening with every dollar printed. There is a new rush of am radio on currency war issues as well.

Sales are up, sales are down.

I'll knock on a review for dollar for dollar and recalculate.

With what I know now, I do not trust the real estate profession.

Who says I disagree, but does it anyways?
 
Interestingly ... fannie and freddie are now interested in HARP 1 and HARP 2 as a way of procuring more federal backing of now defunct GSEs.

40% reduction in value? What market is that? Certainly not mine. Pretty much stable for the past year after an 18% to 23% decline in most areas.

I'm really curious as to how many appraisals are actually being done by those so adamant about making dollar for dollar adjustments on seller paid buyer closing costs? Is your market more orientated to conventional lending rather than, say, FHA or VA financing? Inquiring minds would like to know.

I will repeat the basis for my case.... If you want to consider net to the seller than we should be deducting not only seller paid buyer closings costs but rather all costs of sale such as funding fees, seller paid closing costs, AND real estate commissions. Talk about a spiral down effect...after a few sales the property would have no value at all.

Is value what something sells for or what the seller nets? Inquiring minds want to know?
 
That's agreed Mike. That's touching on the heart of the argument, so to speak.

I find it ironic that appraisers are mismanaged so poorly, that we're left considering this issue with net to seller via concessions, when commissions are apparently just overlooked. But the leeway is there for us to overlook them as well. I guess nobody would get me in trouble if I did.

And I don't agree with the constant spiral down. But some downturn to this monstrously oversized debt driven economy is a must, if we're ever to get out of debt. You're not a homeowner, until you actually own it.

What comes next? Factoring taxes in at market reaction adjustments as well. All home sales will have a 3% tax or something included in the price soon. The beat goes on.
 
I know that my recent buy has so many k in seller concessions.

I also know the sellers net did not include that figure.

One speculates on the probability of the next appraiser saying there was indeed an alignment of price and value, due to market reaction figures, and then reporting the gross as the total value.

I'm the market in this case.

I'm sure glad those rules did not apply to me when I was buying, or I'd have paid even more.

Funny that way, don't you think?
 
I'm ready to play though:

Please provide the exact formula which indicates the market standard for concessions is to include them in net.

I need a formula to apply, in order to believe it.

We calculate everything else. Why not this?
 
Mile High Trout said:
I need a formula to apply, in order to believe it.
We calculate everything else. Why not this?
Click to expand...

It's really not that difficult.

RationalIntpl.gif


Don't forget to factor in current four quadrant inflation as a method of investing :new_all_coholic:
 
Many years ago I was active as a licensed broker.

For several years, I marketed an inventory of acquired SFRs in my role at a then large national employee relocation company.

I've been appraising for more than a few years.

Never (well, ok, let's call it 99+% of the time) are buyers and sellers neutral in their consideration of a dollar amount of a concession to be paid or received.

The sum of my observations: Sellers and buyers are very much aware of the dollar amount of any concession and the link to the contract price.
 
Another way to look at this is by the logic of the action itself. If providing a concession did not at the least contribute the amount of the concession to the eventual sale, why would anyone do it?

They wouldn't. Not if they were rational.

From the logic one might infer that it contributes at least the amount, and perhaps more.

The fact that it can contribute more (and sometimes less) is the reason the GSEs have written their definitions as they appear.

Some of you want to equate sale commissions to seller finance concessions but the two serve entirely different purposes. The broker's fee pays for marketing. It is the expense needed to widely distribute knowledge of your product offering to buyers in that market.

Sale concessions are provided to a specific buyer as an incentive to purchase. It is not a marketing expense, but a cash incentive to close a particular deal.
 
Ignoring the seller paids are the winning points? m2:

Sounds like a convenience point
 
Status
Not open for further replies.
Find a Real Estate Appraiser - Enter Zip Code

Copyright © 2000-, AppraisersForum.com, All Rights Reserved
AppraisersForum.com is proudly hosted by the folks at AppraiserSites.com
Back
Top