Seller concessions for a cash sale?

[alebrewer]

I am no accountant, nor did I stay at a Holiday Inn Express, but my guess would be tax considerations.

Love that saying! Use it a lot actually, although most folks don't know what that refers to any more. Q: wouldn't the seller want the price lower for tax purposes? I can see the buyer wanting it higher for future capital gains tax (especially if KH is pres), but not the seller, right? BTW - I know this is a goofy debate - just had to put that out there.

 

[Tom4value]

Love that saying! Use it a lot actually, although most folks don't know what that refers to any more. Q: wouldn't the seller want the price lower for tax purposes? I can see the buyer wanting it higher for future capital gains tax (especially if KH is pres), but not the seller, right? BTW - I know this is a goofy debate - just had to put that out there.

Yeah, that is why I qualified my statement by saying I am not qualified on tax issues. My gut says it is tax related but have no idea how to explain it.

 

[Tom D]

Maybe a last minute repair item before closing. Lender doesn't want to redo the docks at the last minute.

Most cash offers are to get the sale. They don't have the actual cash. I've done appraisals for cash agreement of sales, especially in a bidding war. It gives the buyer one up with no contingencies.

 

[Mark K]

Most cash offers are to get the sale. They don't have the actual cash. I've done appraisals for cash agreement of sales, especially in a bidding war. It gives the buyer one up with no contingencies.

Exactly. BITD when I owned a brokerage I'd write up an offer for a cash purchase and then the buyer would go ahead and get a mortgage if the buyer wanted to keep their cash. Nothing stopping them from doing this, the only difference is that the buyer didn't have the mtg contingency clause that would allow them to walk if the mtg wasn't approved.

They had the cash and could close the deal but they chose to get a mtg. Some listing agents seemed pssd because they, again, were so stupid that they couldn't understand the concept. (Yes, I have a fairly low opinion of the average agent. May be a lack of training or simply a lack of IQ, or both. In either case, most should not be involved in the largest financial transaction most people will make in their lifetimes.)

All a cash offer does is remove the financing contingency; its really no business of the seller where the buyer gets the cash, from a checkbook or from a lender.

 

[J Grant]

Exactly. BITD when I owned a brokerage I'd write up an offer for a cash purchase and then the buyer would go ahead and get a mortgage if the buyer wanted to keep their cash. Nothing stopping them from doing this, the only difference is that the buyer didn't have the mtg contingency clause that would allow them to walk if the mtg wasn't approved.

They had the cash and could close the deal but they chose to get a mtg. Some listing agents seemed pssd because they, again, were so stupid that they couldn't understand the concept. (Yes, I have a fairly low opinion of the average agent. May be a lack of training or simply a lack of IQ, or both. In either case, most should not be involved in the largest financial transaction most people will make in their lifetimes.)

All a cash offer does is remove the financing contingency; its really no business of the seller where the buyer gets the cash, from a checkbook or from a lender.

It is amazing how many RE agents are ignorant about -or act like they are - (hard to tell with them)

It has happened so many times, where I call an agent for an appointment and they are shocked the buyer is applying for a mortgage - "But it's a cash sale!" they bleat.

 

[alebrewer]

In case anyone is interested, Fannie's new Appraiser Update discusses concessions.

Appraiser Update | Fannie Mae

Welcome to the Q3 2024 Fannie Mae Appraiser Update.

singlefamily.fanniemae.com

 

[Tom D]

More mumbo jumbo.

 

[alebrewer]

 

[Mark K]

More mumbo jumbo.

Yeah, more of the same BS wanting appraisers to adjust a $ in concessions for something less than a $ ($0 would be ideal in their world) in order to artificially inflate prices, make more loans, and keep the builders happy.

SSDD

 

[alebrewer]

Yeah, more of the same BS wanting appraisers to adjust a $ in concessions for something less than a $ ($0 would be ideal in their world) in order to artificially inflate prices, make more loans, and keep the builders happy.

SSDD

but... let's say you have the following scenario:

Comp1: adjusted value is $155k with $0 in concessions.
Comp2: adjusted value is $150k with $10k in concessions.

Do you still adjust the $10k in concessions?