It could be by use of a high ratio, low interest rate first mortgage, a low interest 2nd or 3rd position, mortgage buy down, etc. or alternatively, financing that carries a higher than market interest rate or punitive terms. This suggests that the appraiser must often rationalize, then make a compensating adjustment if unusual financing terms and conditions came into play before considering the comparable sale as comparable, and certainly before making other adjustments for age, condition, location, potential, etc. The concern is did the terms work to the benefit of the buyer. In these situations the reconciliation is price and value. The two are not necessarily the same.
Price takes into account the motivating factors.
It is the end result of the negotiating process. Price is often subjective, value is always objective. For demonstration purposes we are going to consider three scenarios. There is no balloon. The same investment property, the price is changed by financing with an above market rate second mortgage.