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Real Property Appraisals/Sales or Financing Concessions


Hello -

My appraiser did not adjust the comparable homes to reflect their sales or financing concessions. In one case, the concession amount for a comparable home is $10,000. When I look at the appraisal report for a prior home I bought, the appraiser adjusted all comparable homes for sales and financing concessions (when concessions occurred). Why did one appraiser adjust all comparables while the other didn't adjust any at all? What criteria does the appraisal profession use to determine when to adjust for concessions and when not to?  

Thank you for addressing,


Without knowing the specifics about this concession, I can only provide some probable answers. First, did your appraiser even know that there were concessions on some or all of the comparables? Its possible that the appraiser just quickly prepared this report without fully verifying the comparables.

Second, what was this concession? The appraiser should have first disclosed that there was this concession and then explained why he/she did not adjust for it. Not all concessions require adjustments, just the ones that affect the value.

When I find a concession, the first thing I ask the agent is: "Could you have sold this home for the same price if the concession was not made?" If the answer is "No", then an adjustment has to be made.

However, concessions are not just adjusted on a dollar-for-dollar basis. FNMA directs that the appraiser must analyze the concession and determine the adjustment which represents the impact upon the value that the concession made.

It doesn't matter if the appraiser determines that concessions did not impact the value, an appraiser must disclose all concessions and then explain why no adjustments were made, or discuss what adjustments were made and how they were calculated.

I hope that this helps. If I fully answered your question, please give me a good score for my profile.

John C. Carlson
Victorville and Diamond Bar, CA  

Real Property Appraisals

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John C. Carlson


Any questions regarding commercial and/or residential appraising, appraisals or real estate valuation such as: appraising as a profession, valuation techniques, comparable sales selection & analysis, the new HVCC and how it affects appraisers & Borrowers. Also, questions like: "Why did my appraisal come in low & what can I do about it?" I cannot answer questions about comparable data in areas in which I do not practice. I have expertise in most areas of So. California.


31-years both commercial and residential valuation experience. State of CA Certified General Real Estate Appraiser, licensed to appraise all property types. FHA Approved. Specialized expertise with historic, architectural & luxury residential property valuation. Experienced in industrial building and small commercial property valuation. Experienced Reviewer of appraisal reports and expertise with intensive forensic reviews to uncover fraudulent appraisal reports. Expert Litigation and Expert Witness experience.

Associate Member of the Appraisal Institute. Associate Member of the Certified Fraud Examiners.

Numerous posts to Blogs. Please "Google" "John C. Carlson Real Estate Appraisals" where a list of responses I have made will show up.

Numerous classes by the Appraisal Institute since 1978 in the practice areas in which I specialize

Past/Present Clients
First Republic Bank Wells Fargo Bank California Bank & Trust Preferred Bank Numerous Attorneys.

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