I am an appraiser, and yes, I’d like to comment. Sales concessions do affect the sale price being sold by the seller and being paid by the buyer. The appraisers are required to review the sales contract as part of the appraisal process and comment on whether it notes “any financial assistance (loan charges, sales concessions, gift or downpayment assistance,etc) to be paid by any party on behalf of the borrower.” If the concessions are offered in the sales contract the appraisers are supposed to catch it. That’s the way its supposed to be done.
Unfortunately the reality is sometimes a bit different. There are some situations where the appraisers aren’t given the sales contracts; others where the contract is provided but is missing all of the addenda to the contracts where such concessions might be hidden; and then there are transactions where there are two contracts – one for the lender and the real contract. Even where all the information is provided there are appraisers who are willing to “overlook” that information in order to avoid bringing the appraisal in lower than the sale price.
I wouldn’t place all the blame on appraisers, who after all do have to work with the information as it is provided – and there are some crafty realty agents out there. However, I will say that an appraiser who is making the effort to run this stuff down should have no trouble doing so in most cases, and to the extent appraisers aren’t doing that they are failing and are contributing to the problem.
