From the sell side, the add-back that causes the most pain isn't the aggressive one — it's the undocumented one. When we build a CIM, every add-back needs a paper trail: invoice, payroll record, something. The ones that die in underwriting are the round numbers the seller "estimates." The other one I'd flag: adding back the full owner salary when the owner is also the top salesperson or service tech. The lender is going to price in a replacement, so that add-back shrinks fast. My rule with sellers: if we can't prove it in diligence, it doesn't go in the CIM. A smaller SDE that survives underwriting beats a bigger one that gets retraded later.

Thanks Ian, it’s useful to hear this from the sell side. The “owner is also the top salesperson” case is the one I think buyers miss most. You accept the salary add-back and forget the replacement cost. When a seller can’t document an add-back, does it still sometimes make it into the CIM, and how do you handle that conversation with them?