Pre-paids = seller concession?

[residentialguy]

I defy anyone to show me a market in which such non-sense prevails.

Tenny, MN. All deals had concessions.

 

[Lee Lansford]

Just as a "rose is a rose is a rose...", a "concession is a..."

There's too much dancing around with what should be simple and direct: report who gave "what" to the buyer, analyze, and move on.

 

[residentialguy]

Did I mention that Tenny has a population of 6 with 4 households?

 

[Lee Lansford]

...

Yes, if such concessions are customary, by all means, give them a pass. However, for one to find them customary, such concessions must be paid in virtually all deals, in good time and in bad, no matter the type of financing, even in cash deals.

I defy anyone to show me a market in which such non-sense prevails.

I, too, am waiting.

 

[Lee Lansford]

Good one, mentor - thanks. I didn't know there was a distinction.

But remember, the "distinction" is for underwriters and NOT appraisers.

 

[Lee Lansford]

And, of course, everyone is tap dancing around whether or not to adjust comparables for these "concessions". IN MY MARKET, the Department of Veteran's Affairs (VA) has said..."it's up to the appraiser; however, if seller paid buyer's closing costs are common or typical in the market, the appraiser should list what was paid but it is not necessary to make a negative adjustment for seller paid buyer's closing costs unless those exceed 3%".

Someone at the VA best be careful when making effort to give good advice to appraisers.

 

[residentialguy]

Yep, understand. I simiply say that seller is to pay $5,000 towards pre-paids and closing costs. Never had a stip for it.

 

[Calvin the Airedale]

Did I mention that Tenny has a population of 6 with 4 households?

I'll bet, that if you examined the last 100 transactions in Tenny, MN, you'd find that quite a large % did not have seller concessions. Of course with a population that size, you might be going back 30 years but hey, that's how customary gets to be customary.

 

[residentialguy]

I have no idea, actually. Tenny is not in my area. Just havin a bit of fun.

One could argue that a new development area, all with concessions could qualify. You could go back 100 years, all sales would show concessions...albeit all were within the past few years. Doubtful...haven't seen it...but possible.

 

[residentialguy]

What I don't get is how it being "customary" would negate or offset the fact that the homeowner would sell the house for equally less without the concessions.