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Seller will purchase appliances. Concession?

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Tim Schneider

Thread Starter
Member
Joined
Feb 8, 2007
Professional Status
Certified Residential Appraiser
State
Wisconsin
Subject is a purchase on the new 1004. Contract states seller is to purchase appliances for buyer up to $2000. They are not getting cash, so would you still classify this as a concession? My feeling is yes, just want to see what you guys think.
 

Don Clark

Elite Member
Joined
Jan 17, 2002
Professional Status
Certified Residential Appraiser
State
Virginia
I don't think so. Appliances are short lived personal property.
 

Pat Butler

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Joined
Jan 17, 2002
Professional Status
Certified Residential Appraiser
State
Illinois
I would consider it a concession any time money goes from the seller to the buyer. It's suppose to be the other way around. Obviously an attempt to give them down payment money.
 

Jungle Boy

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Joined
Oct 30, 2002
Professional Status
Real Estate Agent or Broker
State
Florida
Are there any appliances there now? If not, then there is no concession - the seller is providing appliances, that's all.

I understand that appliances could be though of as personal property, but most houses come with them installed, and the market mostly expects them to be in place. The form has boxes for them, which shows that they can be considered as part of the whole package.

However, I'd just make the comment in the appraisal, and let the UW make that decision. Where it asks for the amount of the concession, write in "see contract", then explain what you just told us.
 

larryhaskell

Senior Member
Joined
Apr 23, 2002
Professional Status
Certified General Appraiser
State
Nevada
I agree with Pat. The seller could either write a check for the buyer to purchase appliances or just buy the desired appliances and have them delivered. Either way, this benefits the buyer and the seller is actually getting $2,000 less for their house.

After reading Raimo's comments, maybe you should clarify what type of appliances and what the current condition is of the appliances that are currently in the house. If your talking about replacing the built in appliances such as a range/oven, dishwasher, microwave, etc. because they're at the end of their economic life that's one thing, but, if your talking about a deep freeze or some other portable appliance then I would stand by my first statment.
 
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Scott Kibler

Elite Member
Joined
Oct 7, 2003
Professional Status
Certified Residential Appraiser
State
Illinois
Yes, it is a financial consideration to the buyer from the seller. The intended use of the funds is irrelevant. Closing costs are not real property yet seller funds towards those are considered concessions.
 

Geo Gervasi

Freshman Member
Joined
Mar 2, 2005
Professional Status
Certified Residential Appraiser
State
New Jersey
I don't think so. Appliances are short lived personal property.


I agree with Don,
and imo usually the value or cost of personal property
should not be included in the value of the sale of residential real property.
[Commercial is another story depending on the application and type of property]

A bit of clarification - does the house have appliances already installed but aged and not functional? Most C/O's require a working oven/range. So is the purchase for a refrigerator? (personal property anyway) what other appliances are being considered for purchase?

The majority of sales include oven/ranges and sometimes dishwashers - this is the norm, so if there is some other set of circumstances, I still say no. It is not a concession. But there may be extenuating circumstances - are there any?
 

Tim Schneider

Thread Starter
Member
Joined
Feb 8, 2007
Professional Status
Certified Residential Appraiser
State
Wisconsin
I'll find out whats in the house when I visit it tomorrow. I plan to go with Raimo's advice (I think).
 

stefan olafson

Senior Member
Joined
Apr 2, 2003
Professional Status
Certified General Appraiser
State
North Dakota
Tim,

Is it typical in your market for homes to sell with appliances?

In the market I work appliances typically go with the property and I don't put any value on personal property. So typically I don't value the fridge and stove and on certain deals the dishwasher.

Having said that I've done some lake home appraisals where there are Viking or other top end appliances when I know comparable sales don't have similar cost appliances. I usually figure it the fridge keeps beer cold and the stove cooks up a mean steak then there really is no difference between top end cost and low end cost other than an ego.

If there are appliances already in the property, then someone is trying to slip someone else some money to make the deal go! Then you may have a concession.
 
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