Bill, I understand your point and justification, just as I mentioned in commercial leasing.The bottom line, HUD does not allow punitive fees for termination, not a law but policy.

Borrower agrees that early pay off of this loan will not reduce the total amount due of $_____.In my area there is generally a public policy against prepayment penalties so we put justification for it in the document like, if prepayment is made Seller will incur a substantial tax liability.

Originally posted by Joshua George:There were better comps, in the area, their was a house around 1200 sq ft that had just sold for 175,000 that was updated similar to mine same size lot, and he said he couldnt use it bc it was bigger in sq ft.but then he used comp #2 on mine that was 1500 sq ft, im no math wiz but that would be a good bit bigger.If this is for a purchase or a refi, you can always appeal to the underwriter, submit the comp that wasn't used with your justification for why it's better than one that was used, and hope for the best...At this point in the process though, it's unlikely to get changed.And while it may be unethical for him to change the appraisal values across the board for you, he did it to help you out, so calling him out on it seems a bit inappropriate.

I'm going to disagree with this to some degree...There are legitimate reasons to downgrade a home -- anything from new financial situation (where you plan to sell the original, nicer home) to new family circumstances (kids went off the college and don't need such a big house).Lenders will certainly scrutinize these loans more, and they will likely ask for justification of the purchase (perhaps even a written letter indicating that your intent to really move into the new property), but if you can reasonably justify why you're downgrading, the big lenders shouldn't have a problem with it.

The thing is, you need to have Justification for your offer and stick to it.

Banks will work with you on price if you have justification for wanting a lower price.

Construction materials used in multi-family are really not much different than those used in single family, it's just if you have bad materials, you have a lot more of them.

I don't think this justification will make any difference to a seller, unless they are clueless as to what the market rate is. 

Ask for justification ask to why he needs the 50%.

If your cap rate is too low and the rents are at market price, that's justification to offer something lower to increase the cap rate on your property.