Welcome to the new 1004

[Tiffany Gibbons]

Funny! that is what I copy/pasted for you. Here it is again: Sales concessions typically include financing incentives or non-realty items. As all adjustments must be market-derived, the adjustment should reflect the difference between the sales price with the sales concessions, and what the property would have sold for without the concessions under typical market conditions. The sales concessions on the comparable properties are adjusted to typical market expectations, not to the specific terms or conditions of the sale of the subject. Any concession adjustments must be downward adjustments as positive adjustments for sales concessions are not acceptable.

It doesn't say " you only adjust the amount over what is typical anyway."

Okay, Dude. I have not had any recent comparables on any of my appraisals where I did not adjust the whole amount on any of the sales, because concessions are not that common. I've been at this awhile now for 35 years. I didn't solicit your advice or Danny's. Go help out these people who don't know what a duplex is, K?

 

[Sadie]

Here is what Fannie said in the Dec 2023 Appraiser Update.
View attachment 91568

I also seem to recall that Freddie Mac failed to account for concession in their Research Note. From AEIs critique:

View attachment 91569
GSEs tend to speak out of both sides of their mouths depending upon what their objective is.

They said something like don't always adjust $ for $, but its ok if you do. Wasn't that it in a lot fewer words?

 

[Tiffany Gibbons]

They said something like don't always adjust $ for $, but its ok if you do. Wasn't that it in a lot fewer words?

I only do VA, not Fannie, Freddie, or FHA unless a VA goes FHA. The sentence above is one reason why.

 

[djd09]

concessions...who cares...your overlords just waive appraisals and they dont even adjust for sq footage

 

[CGinMN]

No, they said market theory suggests dollar for dollar is expected in undersupplied markets and by not adjusting appraisers are inflating appraised values.

I say let’s leave the decisions about how much to adjust in the hands of the professionals, instead of flip flopping based on the agenda for that day. Like every other adjustment, concessions adjustments should always be market-derived. Like every other adjustment, depending upon how it is derived the market will say different things.

Dollar for dollar is always going to be a safe and valid approach because it is rational, in the same way a cost based adjustment is safe and rational. Is it perfect? No. But it’s reasonable and supported via “market theory” or whatever.

Or you can do a regression and show that maybe the adjustment should be 50 cents on the dollar. Or maybe the regression shows little correlation for that coefficient, so no adjustment is needed.

Based on the similarity of the data you can do a sensitivity analysis and find what I’ve found many times, which is that the market does not recognize an adjustment, even when market theory suggests otherwise.

Basically depending on how you look at it, it is pretty easy to support anywhere from 0.00 to 1.00 on concessions, and the fighting about it is people disagreeing about their preferrences.

 

[Sadie]

I only do VA, not Fannie, Freddie, or FHA unless a VA goes FHA. The sentence above is one reason why.

FYI, If you are completing an appraisal on a F/F form, part of your SOW is to follow F/F guidelines. They are not so different from VA.

 

[Tiffany Gibbons]

Interesting that Mr. Wiley is telling VA appraisers what VA policy is regarding seller concessions from his seat at Freddie Mac. Thankful that VA has not followed Freddie Mac in reporting to state appraisal boards perceived violations in USPAP. VA keeps it in the house, regularly monitoring the appraisal quality of its VA panel members

The Chief Appraiser made it clear he didn't want unlicensed Bar Stool Billys doing "Property Data Collection" on their appraisals on one video. After all, active duty Veterans get deployed at times. Most Veterans don't want unlicensed people in their homes when they are overseas around their spouse and children. Most of the review appraisers at my RLC are licensed appraisers. If GSEs are turning in appraisers to the board for adjusting sales concessions incorrectly, then it should be clear what they want the end game to be. Ridiculous.

 

[Mike Ault]

They should have clarified things like this long before cutting the appraisal profession off at the knees. With "the valuation professionals" in charge now, concessions can mean whatever they want them to mean at the time, and who's going to argue with them? Seller concessions (kickbacks) should be outlawed. Problem solved.

 

[Tiffany Gibbons]

FYI, If you are completing an appraisal on a F/F form, part of your SOW is to follow F/F guidelines. They are not so different from VA.

Are you back on the commission?

 

[DISfunctionalObsolescence]

The long awaited update has been released.

I see most forms being being autopopulated with ‘average’

Overkill I think. More data doesn’t mean better results. More accurate data for location, view, condition, and quality is what is needed. IMO

I think most appraisers are going to be overloaded with the data inputs that they’ll just want to run through the report as fast as possible just to get it done. We aren’t monkeys…but damn they want us to me