Sales or Financing Concessions

The appraiser must report

·   in the “Neighborhood” section of every URAR or on an addendum, the prevalence of sales or financing concessions (for example, interest rate buy-downs, inclusion of non-realty items in the transaction, seller payment of any buyer closing costs, etc.).

·   if any of the comparable sales involved such concessions, the concession’s effect (if any) on the comparable sales price (when such information is reasonably ascertainable).  In doing so, the appraiser should consider

-   that the effect of financing/sales concessions can vary in different locales

-   that the amount of any adjustment should generally be based upon the real estate market reaction to the concession, and not on the dollar-for-dollar cost of the concession(s) to the seller, and

-   in proposed construction cases, closed sales by the same builder, sales in competitive subdivisions and resales of similar existing properties.

Housing Supply and Demand

In every case, the appraiser must

·   consider the supply and demand for available housing in the subject market area, and

·   report, either in the “Neighborhood” section of the URAR or on an addendum, the average listing price to sale price ratio for the subject market area.  Professional judgment must be used to estimate that ratio if it cannot be determined from available data sources.

Marketing Time and Trend

In every case, the appraiser must

·   consider the marketing time trend (increasing or decreasing) in the subject market area, and

·   report, either in the “Neighborhood” section of the URAR or on an addendum, the extent of increase or decrease in the average marketing time (listing period) in that market area (for example, “In the last 3 months, the listing period in the subject’s market area decreased from 180 to 90 days.”)