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Subject sales concessions
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5/16/2013 at 10:35:47 PM GMT
Posts: 14
Subject sales concessions

Has anyone had a lender say you could not adjust for subject sales concessions?  Also saying you cannot adjust comparables for items such as forclosures, short sales etc when used in limited markets?


5/17/2013 at 12:40:08 AM GMT
Posts: 297

I have never adjusted for subject sales concessions. I have on occasion discussed them at length especially in markets where homes are selling 94-97% of list price and my subject amazingly sells over list by the concession amount. 

I have fought the battle of using REOs and short sales when that is the market and it is all I have. There is an adjustment in my market and I make it. I have data to prove the adjustment. One very condescending individual informed me I must remove the adjustment. I did not argue I just simply said no  He said you do not understand, we do not allow that adjustment and you must remove it. I said thank you for calling and hung up.  They made the loan based on my report. No they are no longer a client.


5/17/2013 at 4:38:33 PM GMT
Posts: 14

Carol, thanks for your reply.  This is an issue we will be discussing at the CNAREA convention later this month.  Hope you are planning to come.


5/17/2013 at 4:52:48 PM GMT
Posts: 21


If addressing at CNAREA the following might not have any use--but if clients are following some form of standardization--in the US Fannie Mae appearing to be the source of compliance-check out Selling Guide B4-1.4-16

The appraiser is responsible for determining which comparables are most appropriate for the assignment. Fannie Mae expects the appraiser to account for all factors that affect value when completing the analysis. For example, if the appraiser believes a foreclosure sale or a short sale is an appropriate comparable, then the appraiser must identify and consider any differences from the subject property, such as the condition of the property and whether any stigma has been associated with it. The appraiser cannot assume it is equal to the subject property. A foreclosure or short sale property may be in worse condition when compared to the subject property, especially if the subject property is new construction or was recently renovated. The appraiser must conduct the proper research in order to complete the assignment and provide an accurate opinion of market value.

As for adjusting subjecct concessions--never do--but I have noticed that in certain areas of the country the subject concessions were the basis of an adjustment to the comps--which is totally incorrect--don't know what CE they were taking.

Monica L. Trotter, IFA

6/11/2013 at 3:05:39 AM GMT
Posts: 297
Mike. I no longer get the information on the CNAREA conference. Next year let me know about it, I love that conference.

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