Typical Contract

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The appraiser must analyze all contracts current as of the effective date of the appraisal.  Fannie Mae wants know that the contract is legitimate and/or reasonable.  If a contract is typical and properly completed by an agent, a comment such as the following will suffice:

 

Bracketed items are not required but are allowed.

 

Arms Length

ArmsLength;The contract approximates market value.  The contract specifies an FHA guaranteed mortgage [with a 3.5% down payment].  Seller concessions of 2.1% are not excessive.  There are no unusual special stipulations.  [The contract contained 20 pages].

 

Arms Length

ArrnsLength;The contract is significantly higher than market value.  The contract specifies a conventional 95% mortgage.  Concessions of 4% exceed the median concessions in the neighborhood.  There are no unusual special stipulations.

 

Non-Arms Length (special financing)

NonArmsLength;This contract was a lease purchase which is not at market value because of the special and creative financing used to affect the sale.  The contract was not considered as a value indicator. There are no unusual special stipulations.

 

Non-Arms Length (related parties)

NonArmsLength;This is not a market value transaction because the parties are related.  The contract was not considered as a value indicator.  There are no unusual special stipulations.

 

Non-Arms Length (exposure time)

NonArmsLength;This is not a market value transaction. The seller is the landlord to his tenant.  The property was not offered on the open market and, therefore, there was no exposure time. The contract was not considered as a value indicator.  There are no unusual special stipulations.

 

Page count is optional.  I would leave it out.

 

Modified:  10/24/2018

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