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BillDing

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Reply with quote  #51 
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Originally Posted by Meatloaf
No adjustments are necessary for those costs which are normally paid by sellers as a result of tradition or law in a market area....

Exactly....that means virtually every transaction the sellers would pay closing costs...including cash deals!  ... as if there was a law in place requiring them to pay.

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Meatloaf

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Reply with quote  #52 
vir·tu·al·ly
ˈvərCH(o͞o)əlē/
adverb
 
  1. 1.
    nearly; almost.
    "virtually all those arrested were accused"
    synonyms:effectively, in effect, all but, more or less, practicallyalmostnearly, close to, verging on, just about, as good as, essentially, to all intents and purposes, roughlyapproximately
    informalpretty much, pretty well; 
    literarywell-nigh, nigh on
    "the building is virtually empty"

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BillDing

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Reply with quote  #53 

It clarifies how grand "virtually all" means...as if there was a law requiring the seller to pay them when selling the house. There is nothing even close to that, so stop trying to find a loop hole. Why are you so biased in making the deal work? You really need to step back until you realize that you're not supposed to act like you have skin in the game.

The need to make negative dollar adjustments for sales and financing concessions and the amount of the adjustments to the comparable sales are not based on how typical the concessions might be for a segment of the market area—large sales concessions can be relatively typical in a particular segment of the market and still result in sale prices that reflect more than the value of the real estate...The adjustments must reflect the difference between what the comparables actually sold for with the sales concessions and what they would have sold for without the concessions.


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Meatloaf

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Reply with quote  #54 
I am not trying to "find a loop hole".  I am saying that sometimes the concessions affect the sale price and sometimes they don't.  Its a case by case scenario.  You have to be the judge.  But to insist that ALL sales concessions must be removed from the sale price of the comp is wrong.

Sometimes, the concession adds to the asking price.  Sometimes the concession is atypical like a vacation at the vatican and a 5 year lease on a new porsche.  Sometimes the concessions are a requirement (think VA loans).  So...

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BillDing

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Quote:
Originally Posted by Meatloaf
 I am saying that sometimes the concessions affect the sale price and sometimes they don't.  Its a case by case scenario.  You have to be the judge.  But to insist that ALL sales concessions must be removed from the sale price of the comp is wrong.

I agree...that's why we verify with the party to the transaction...to see if it affected that price.  99.9% it does and the seller would sell lower without having to pay the concessions.   VA, included, btw.  Just because VA loans might have that, doesn't make it all sales, so you have to adjust it regardless of VA stips.

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Meatloaf

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Reply with quote  #56 
When you say the seller would sell lower without paying concessions, the same theory applies that the seller would sell lower without paying a comission, the seller would sell lower without paying for repairs, The seller would sell lower to sell the house within 30 days instead of 180 days.....

The list goes on and on.  The fact of the matter is that the seller is EXPECTED by the market to contribute to the buyer's closing costs and if the seller REFUSES to contribute then he alienates a large percentage of potential buyers and will be FORCED to sell for much lower due to the diminished buyer pool.  Therefore, the KNOWLEDGEABLE seller will pay those typical concessions and it becomes part of the market value as any seller unwilling to contribute to closing costs isn't acting in a KNOWLEDGEABLE manner and therefore cannot be considered as an indicator of market value.

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BillDing

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Reply with quote  #57 

Quote:
Originally Posted by Meatloaf
When you say the seller would sell lower without paying concessions, the same theory applies that the seller would sell lower without paying a comission, the seller would sell lower without paying for repairs, The seller would sell lower to sell the house within 30 days instead of 180 days.....

Commission is a service that pays for itself. Repairs are a condition adjustment. Market exposure is taken into consideration.  Paying cash is adjusted.

Quote:
Originally Posted by Meatloaf
The fact of the matter is that the seller is EXPECTED by the market to contribute to the buyer's closing costs and if the seller REFUSES to contribute then he alienates a large percentage of potential buyers and will be FORCED to sell for much lower due to the diminished buyer pool.

That is not an appraiser's concern.  We're not here to make sure the seller gets the highest price.


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Meatloaf

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Reply with quote  #58 
I am not referring to the seller in the transaction with the subject.  I am referring to the universal "seller".  The guy who is knowledgeable and typically motivated.  If the market says you can net more money if you offer a small concession, then the knowledgeable seller would offer the concession.

The net to the seller is not the figure that reflects market value either.



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BillDing

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Reply with quote  #59 
Quote:
Originally Posted by Meatloaf
I am not referring to the seller in the transaction with the subject.  I am referring to the universal "seller".  The guy who is knowledgeable and typically motivated.  If the market says you can net more money if you offer a small concession, then the knowledgeable seller would offer the concession.

The net to the seller is not the figure that reflects market value either.



when they would sell for the difference without paying the concessions, then yes, the concession amount affected the price.  You can't get around that.

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Meatloaf

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Reply with quote  #60 
Would they sell for less is not the question.

What could they sell it for if they refused to offer a concession?  If they refused to offer the concession and they could net significantly more, then are they a typically motivated knowledgeable seller?

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MEP

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Reply with quote  #61 
Is this an appraisal or English Lesson discussion?


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Meatloaf

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Reply with quote  #62 
Its a discussion that BillDing doesn't understand.

He is painting all concessions with the same brush.  He forgets why concessions exist in the first place.  How does it benefit the parties in volved for the seller to pay a portion of the buyer's closing costs?  That is the question that Bill is ignoring.

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BillDing

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Reply with quote  #63 

lol...I fully understand, make no mistake about it.  What you don't understand is that we appraise to a very particular definition of Market Value, and when it affects the price from what it would sell if they didn't pay, then it is worth that much less and must be adjusted. We are dealing with "Market Value" and all he conditions stated within the definition must be in place. 

I have no problem with the bank adding 3% on the mortgage to cover closing costs...mortgage payments would be the same. Why don't they just do that?  Problem solved. Now houses (and our appraisals) will reflect an accurate price, not 3% higher due to concessions affecting the price, that was based upon other comps that were 3% higher, which were based upon other comps that were 3% higher etc etc etc

Of course, if banks did that, then they would loose their fall guy.


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BillDing

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Reply with quote  #64 
You know, if a guy can't even save up $3,000 to put down on a dinky house...

Not everyone deserves a house.

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