When we published how to properly report concessions last year, we gave instructions for when the buyer receives a CREDIT for repairs or costing costs that ultimately impact value for appraisal and comp standards. For example: A house that was purchased for $200,000 but had a $10,000 concession to enable the buyer to do repairs should be noted in the MLS as such: Sale price of $200K and “included in the sale price was a concession of $10K for repair issues”. In the case of a sale with a reduced purchase price that was renegotiated due to inspection issues, (for instance if the above buyer/seller agreed to reduce the purchase price to $190,000 with no money back) that it should be reported as sold as $190K only, since that matches the deed and already reflects the true market value of the home in the condition at the time of sale.
- Sale price = Deed transfer price as recorded by the Registry
- Concessions = Anything that impacts the Sale Price as Recorded in the Registry
When reporting your sales, please consider if there was anything that impacted the sale price listed in the registry… If the P&S said $195,000 with $5,000 closing cost credits – you need to look at how the deed was recorded to determine how to note it in the MLS – if they recorded $195K, then so should you, with a note of the $5,000 closing cost credit. If they recorded $190,000, then the credit was already reflected in the sale price and doesn’t need to be mentioned as a credit in the concession field. Finally, if you have two types of credits lumped together, it’s super helpful to our appraisers to have that spelled out – “$5,000 for closing cost credits and $5,000 for repairs” is much more helpful than “$10,000 concession.