Does seller contribution of 5-6k reduce the appraisal value of comps?

UPDATED: Oct 1, 2022

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Does seller contribution of 5-6k reduce the appraisal value of comps?

My home came in 9000 below my realtor original
estimate of market value based on comps and
the appraisers are saying that is the reason

Asked on January 26, 2019 under Real Estate Law, Texas


SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 3 years ago | Contributor

There is no law governing this: that is, the law does not say what does or does not go into an appraisal, or comps, or determining home value. It is up to the lender or the realtor (whomever is doing the appraisal or setting the value) to determine what factors they consider in determining fair comps, or the value of those comps, or the value of the property being appraised. That being said, since seller contributions decrease what the buyer is actually paying, it is logical and fair to reduce value by those contributions. Mathematically and financially, a $190,000 sale price where the seller contributes (or so effectively returns to the buyer) $6,000 is the same as an $184,000 price with no contributions.

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