Sorry Jman, your are completely wrong. 1st, Seller concessions are widely discussed because no authority has put in writing what we all already know. 2nd market value is the only number you should be concerned with when appraising for a normal FDIC bank loan. Never will you see any other type of value wanted on an engagement letter when someone is either purchasing or re-financing. 3rd, we’re not talking about repairs here, if we were, then we would also discuss condition etc. So my theory is sound..4th, a seller concessions in the form of cash to the buyer can NEVER be paid without affecting the sales price. Hey but don’t take my word here’s what Fannie Mae says (Fannie Mae on Seller Concessions (FAQ) How should the appraiser determine appropriate adjustments for sales concessions on the comparables?

The appraiser must consider the impact a sales concession had on the transaction. 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, so that the dollar amount of the adjustments approximates the reaction of the market to the concessions.

(Fannie Mae Update SEL Announcement 2017-01, January 31, 2017.)

With this update, we have clarified that appraisers may use dollar for dollar adjustments for financing or sales concessions when such an adjustment approximates the local market’s response to these types of concessions. This clarification is effective immediately.

If you don’t want to believe Fannie, Here’s what the The Appraisal Foundation say in a letter to congress: ( on Seller Concessions In developing an opinion of market value, an appraiser must take into consideration the effect of any sales concessions on the market value of the real property.  Therefore, it was determined that seller concessions are typical in the area, but differ greatly in amounts depending on the buying power of the buyer(s) and the price of the home being sold. It was also discovered by personal interviews with sales agents, builders and sales staff, that the price of a new purchase and or resale home could be lowered by the exact amount of seller concessions offered instead of giving the seller concessions, thereby having a direct effect on the sales price and therefore adjusted out.

And, my words initially were taken from a letter drafted by the Appraisal Institute. So friends, I say again. Any seller concessions given in cash has a clear and direct affect on the sales price and must be adjusted out dollar for dollar.

Its simple – if the concession caused the sales price to increase to above market value (which will be seen when analyzing on a grid) then make an adjustment to bring that sale back in line with a zero concession sale or sales. Without a zero concession sale (either naturally or one that you adjusted to zero) then the appraiser has no market support for an adjustment or lack of one.

There are too many assumptions by the mortgage industry about how any concession (and I’m not talking about a title policy or such things typically paid by seller or buyer, but money paid by seller towards buyer’s closing costs) influences or doesn’t influence a sales price.

The authors comment about cars as seller concessions from HUD is exactly the type of stuff I heard from HUD in a conference call several years back. They said big screen TV’s – I said there were no big screen TV’s being giving away in the sales that I used and I had zero concession sales to provide support for my concession adjustments or lack thereof. By the way, mortgage lenders can only accept 6 points as a concession- so this talk of 10-100K concession is just that.

I managed the regional appraisal dept for the mortgage company of the nation’s 2nd largest builder for 16 years and that is the way we handled seller concessions – by pairing with a zero concession sale and HUD nor anyone else had an issue with that. It just basic appraising.