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ct
09-07-2005, 01:56 PM
Just got an appraisal report, and trying to understand what a particular section means, or really what it's there for. It is in the comparable listings section, labeled "Sale or Financing Concessions". Every comparable with a conventional loan, has a negative valuation for my home. Is this estimated closing costs, or something like that?

If anyone has any idea, I'd really appreciate some input. I just got screwed on this appraisal by about 3 grand, and that kills my 2nd mortgage application.

Thanks!

jspchief
09-07-2005, 01:59 PM
Is there something on your home that needs 3k worth of repair?

Just a guess.

ct
09-07-2005, 02:00 PM
No, I'm trying to roll bad credit card debt into good(relatively speaking, of course) mortgage debt. The appraisal value that came back is way lower than expected, so the lender will not loan enough to pay off the card.

This BS, with both my and my wife's credit scores near 800? Man I don't get it...

ct
09-07-2005, 02:03 PM
Wasn't there a CP member who is a loan officer or something?

jspchief
09-07-2005, 02:04 PM
No, I'm trying to roll bad credit card debt into good(relatively speaking, of course) mortgage debt. The appraisal value that came back is way lower than expected, so the lender will not loan enough to pay off the card.

This BS, with both my and my wife's credit scores near 800? Man I don't get it...I was just thinking a sale concession might be something like needing a $3k roof job before you could sell the house, thus lowering the appraisal value.

Why don't you contact the appraisal company and ask them? Or your banker.

ct
09-07-2005, 02:09 PM
I was just thinking a sale concession might be something like needing a $3k roof job before you could sell the house, thus lowering the appraisal value.

Why don't you contact the appraisal company and ask them? Or your banker.

Hadn't considered that. My house could use a paint job, but it doesn't need a paint job.

What puzzled me is one of the comparables shows FHA loan type, and has no valuation adjustment either way, but the other 2 are CV (conventional), and have a -$3,000 and -$3,600 adjustment. What the hell?

Iowanian
09-07-2005, 02:14 PM
paging mr lumberg

Halfcan
09-07-2005, 02:18 PM
A sale concession would be if they threw in, say a washer and dryer and added it to the price of the house. Or it could be a major hit the owner took to sell the house-say like a $3000 carpet allowance, because they had dogs or something, maybe a new roof, or even replaced rotted garage doors. The buyer said I will buy this home if you do the following-the seller didn't have the money to fix it so they either subtracted off the agreed selling price or raised the selling price and gave the buyer cash for the items at closing. So this will lower the comp price by the price negoitiated in the contract.

Financing concessions- could include the seller paying points (% of loan) to buy down the interest rate for the new buyers. It could also include paying up to $1500 in Buyers closing cost. FHA loans prohibit loan companies from charging the buyer certain fees-so they pass it on to the seller. When a seller takes a FHA deal, there is $350 in cost he will automatically pay unless negotiated out in some other way that does not show the Buyer paying it.

Any items whether Financial or sale concessions will negatively effect the comps, because these items are taken off the sale price to get the "true value" for the property. It used to be mostly hidden in comp sale reports until recently when counties like mine have required title companies to fill out a new sales report so they can update the property taxes without sending their lazy asses out there and look at the property themselves. Therefore sales concessions are deducted to show the true selling price so you don't end up paying Prop Tax on the extra amount.

$3000 should not have matterd that much for a second mortgage. Those loan co. do a drive by appraisal and then pick the comps convienent to whatever number they need to either make or break the loan. Appraisals have nothing to do with Market Value on a home, so your property is probably worth much more than this co. is saying. Drive by Appraisals for second mortgages are only worth something to the co. that did them, just to protect their azzes, and they will likely charge you up to $550 for the sheet of paper. I would suggest not using them and contact your original loan co. and either refinance the entire loan or call your bank and do a home equity line of credit. It is best if you never have to get a second and put your home on the line. Good luck.

Braincase
09-07-2005, 02:48 PM
To sum it up... "Bend Over and grab your ankles... you might feel some pressure..."

ct
09-07-2005, 02:55 PM
A sale concession would be if they threw in, say a washer and dryer and added it to the price of the house. Or it could be a major hit the owner took to sell the house-say like a $3000 carpet allowance, because they had dogs or something, maybe a new roof, or even replaced rotted garage doors. The buyer said I will buy this home if you do the following-the seller didn't have the money to fix it so they either subtracted off the agreed selling price or raised the selling price and gave the buyer cash for the items at closing. So this will lower the comp price by the price negoitiated in the contract.

Financing concessions- could include the seller paying points (% of loan) to buy down the interest rate for the new buyers. It could also include paying up to $1500 in Buyers closing cost. FHA loans prohibit loan companies from charging the buyer certain fees-so they pass it on to the seller. When a seller takes a FHA deal, there is $350 in cost he will automatically pay unless negotiated out in some other way that does not show the Buyer paying it.

Any items whether Financial or sale concessions will negatively effect the comps, because these items are taken off the sale price to get the "true value" for the property. It used to be mostly hidden in comp sale reports until recently when counties like mine have required title companies to fill out a new sales report so they can update the property taxes without sending their lazy asses out there and look at the property themselves. Therefore sales concessions are deducted to show the true selling price so you don't end up paying Prop Tax on the extra amount.

$3000 should not have matterd that much for a second mortgage. Those loan co. do a drive by appraisal and then pick the comps convienent to whatever number they need to either make or break the loan. Appraisals have nothing to do with Market Value on a home, so your property is probably worth much more than this co. is saying. Drive by Appraisals for second mortgages are only worth something to the co. that did them, just to protect their azzes, and they will likely charge you up to $550 for the sheet of paper. I would suggest not using them and contact your original loan co. and either refinance the entire loan or call your bank and do a home equity line of credit. It is best if you never have to get a second and put your home on the line. Good luck.

Thanks, good info!

The 2nd mortgage lender (diff from 1st lender) was supposed to be working on contacting this appraiser, and asking for a revaluation. I got tired of waiting and just called this guy and spoke to him personally.

Those 2 comps that had a neg valuation for Sales/Financing concecessions were exactly as you suggested. They are seller paid closing costs, so he took that out of the sale price. Interesting that you say up to $1500, is that a set amount, vary by state, or completely discrecianary? If it should be capped at $1500, then I got screwed by $1500 and $2100 on the 2 non-FHA comps.

Anyway, this guy ain't budging. Funny he was hired by the lender, and now screwed his client out of a deal. I'm backin out and eating the $300 appraisal fee. At least that is my stance, until the lender can offer me something else, such as the home equity line. I just preferred not to go that route. The rate is variable, and the payment is interest only, but not much less than the fixed 2nd mortgage payment. Don't see that I'm gaining anything there.

ct
09-07-2005, 02:56 PM
To sum it up... "Bend Over and grab your ankles... you might feel some pressure..."

u got that right

"Thank you sir, may I have another!"

Halfcan
09-07-2005, 03:26 PM
No its not a set amount of $1500 but for first time buyers is probably about the average of their normal closing cost. Seller is not allowed to pay the down payment for them. Next time if they ask for an appraisal fee or any fee up front-don't deal with them. They should roll those cost in your loan or better yet just pay them so you don't end up paying interest of a fee. Your closing cost and interest should be tax deductable so at least you get a break there. Another method is to go on a tight budget paying your highest interest card first and so on until paid off. If your past that point, then try refinancing the whole loan-it would be much cheaper and better rate than a first and second. Typically 2nds run 3 to 5% on prime if you have good credit.