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Erc Appraisers

Discussion in 'General Appraisal Discussion' started by KYLECODY, Sep 13, 2004.

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  1. KYLECODY

    KYLECODY Senior Member

    2
    Apr 26, 2003
    Professional Status:
    Certified Residential Appraiser
    State:
    Arizona
    question for anyone doing relocation work. Theres a chance the govmt will purchase my home without me having to list it as my wife got a Federal job. They have 2 appraisers come out and then average the two....they do, however, recommend you list it anyway as they say you normally get more $ that way....so the question is do the relocation companies give appraisers any "suggestions" or " pressure" to report a more conservative value??? Thanks.
     
  2. liznindy

    liznindy Senior Member

    0
    Jan 15, 2002
    Professional Status:
    Certified Residential Appraiser
    State:
    Indiana
    Kyle,

    I do relocation work from time to time and have never been pressured to give a 'conservative' value.

    I do, however, pay more attention to decor and condition when appraising for relocation and make adjustments if the market (potential buyers) would discount the property for any items/or lack of amenities expected at your price level. The client is looking for the 'anticipated sales price' in relocation appraisals.

    Marketing time is also important as typically the client has a set number of days which the appraiser is to consider (such as 90-120 days marketing time). Additionally, adjustments for 'forecasting' may be warranted if your market is affected by climate or if your market slows down in the fall/winter (as it does here in the midwest).
     
  3. Thomas Fiehler

    Thomas Fiehler Senior Member

    4
    Jun 2, 2003
    Professional Status:
    Certified General Appraiser
    State:
    Ohio
    I also do erc appraisals. With the government, the appraiser is usually dealing with "normal" marketing times and not limited to the 90-120 day selling period. Also, they do not want "seasonal" adjustments. Just read their requirements. I don't pay any attention to the listing price, but the appraiser does need to give listing and sales history so if house is listed, it will be reported on the form. The appraiser is reviewed by what the house sells for (net amount) vs. what they appraised it for so if the appraiser continually gives conservative values and the houses keep selling for more, pretty soon they won't be doing erc appraisals. B)
     
  4. Ray Miller

    Ray Miller Elite Member

    0
    Feb 20, 2002
    Professional Status:
    Licensed Appraiser
    State:
    Wisconsin
    No pressure here. I have been doing one or two a month for the past year. I do know they don't want skippie and skippet. They want an honest appraisal and a correct appraisal.

    Just did one where they hiried one of the local sweat shops. I got several calls wanting to know why my GLA was 300 sq ft. less then the other appraiser on one comp. sale. Simple fact I measure the subject comp and did not take the informaton out of MLS. On another listing I call the basement Part. where the other appraiser called it full. It had a two car tuck under garage.

    Then the owners were spliting off 6.6 acres of the 41.6 acres and keeping 35 acres. I would not do the appraisal until I had the survey in hand. Sweat shop did there's with out survey. I needed to know if any of the outbuildings and creek went with the subject home.

    Most of mind like to see marketing time with in 120 days.
     
  5. Restrain

    Restrain Elite Member

    53
    Jan 22, 2002
    Professional Status:
    Certified General Appraiser
    State:
    Florida
    As to the appraisal of the home, it depends on the requirements of the relo company. If they have a flat 120 day CLOSING time and the market is showing 180 days, there's going to be a discount. That very "attractive custom" paint job may be a negative, as the custom padded cloth wall coverings. You may have spend $30K for a pool, but the market shows $5K.

    Finally, the market may just be flat or slow.

    As to why they want you to list it, if you can sell it, then they are not out the expenses of a relocation company. This can run $30K on a home, easy, when you consider management costs, holding costs, appraiser and survey costs, title company costs, selling costs, etc. If you sell the home, then all of these costs are not incurred by them.
     
  6. Steve Owen

    Steve Owen Elite Member

    0
    Jan 16, 2002
    Professional Status:
    Certified General Appraiser
    State:
    Missouri
    One of the main differences between an appraisal for a loan and a relocation appraisal is the definition of value we are appraising. Market value, which is used in the majority of appraisals is not exactly the same thing as Anticipated Sales Price, which is used in relo appraisals. One of the main differences is that market value is for a "reasonable" marketing time in the current market, while Anticipated Sales Price is for a specific marketing time. Relo companies don't want to hold inventory, so that time is often shorter than typical marketing time would be; but, that depends on your specific local market.

    Additionally, the relocation company typically wants appraisers to pay attention to and adjust for things like "decor neutral" and forecasting. Therefore, if you have an oddball color scheme, a relo appraiser might be more likely to adjust for it. So, if you can find the one person in the market that likes purple carpeting, you should be able to sell at a higher price than the appraiser's Anticipated Sales Price.

    I have had subtle pressure from a relo company when I was higher than the other appraiser. Part of the reason for that is that if the two original appraisers are not close enough together, they hire a third appraiser, and they would like to avoid having to do that. They wanted me to adjust for something he had adjusted for that I didn't think was right. I told them to put some pressure on him, instead - :D

    Why did I stand pat? Another big difference in relo work is that they track your performance. If you are not very close to the eventual sales price most of the time, you will not be doing this kind of work for very long. Therefore, most appraisers would not be likely to cave in to any pressure unless they really thought they were incorrect to start with.
     
  7. Oregon Doug

    Oregon Doug Senior Member

    0
    Jan 15, 2002
    Professional Status:
    General Public
    State:
    Oregon
    I've done a few ERC appraisals over the years but there really isn't a big demand for it on my market. I have never been pressured to hit any predetermined value but I have had a few fail to pay fees for reasons unbeknownst to me (SONY comes to mind).

    Oregon Doug
     
  8. Otis Key

    Otis Key Elite Member

    0
    May 15, 2004
    Professional Status:
    Certified Residential Appraiser
    State:
    New Mexico
    Kyle - you've gotten some good, honest and true responses. In a nut shell it comes down to several answers to your several questions.

    There is no downward pressure on appraisers. Appraisers are graded and rated based upon the accuracy of the "anticipated sale price" and the actual sale price, as well as the time on market. The appraisers are giveng minimum guidelines from the relo company based upon the employer's guidelines. Those include, but are not limited to, earth tone colors, maximum days on market, etc. Should the two appraisers be more than a certain percentage apart in spread, while working independent and not talking, then the relo company will order a third and/or fourth appraisal.

    A relo appraisal is predicting the future sale price, hence the terminology of "Anticipate Sale Price". It is not an estimate of the current market value. It is also different in that the appraiser utilizes recent sales and current listings to correlate the "anticipated sale price."

    If there are repairs that you're in the middle of completing - it's a sad but true fact that most of the directives are to adjust to have those done and not let it be completed by you.

    You might consider a relo appraisal to be one of the most conservative estimates, due to the guidelines, of a comparable appraisal for financing a home. It can't however be used to obtain a loan. It's not for that purpose.

    Good luck on the transfer. And, FWIW, consult with an appraiser at your destination prior to going to an agent. Appraisers study markets, know the history of areas, areas of settlement, areas of termites, etc. It's worth it to pay a consultation fee now, which I believe you can write off on your taxes as part of the move, than to buy a home, move and loose $10,000 in 3 years because you purchased in the wrong place.

    Good Luck
     
  9. Jeff Horton

    Jeff Horton Senior Member

    0
    Jan 15, 2002
    Professional Status:
    Certified Residential Appraiser
    State:
    Alabama
    No pressure here. Excellent advice from everone here too.

    I just finished one that the homeowner is going to be big time upset when he finds out. The company wants a 120 day market time. The average in this Subdivision is 1 year with many homes being 2 years on the market. There is an oversupply of homes for sale in it's area to boot. I came in $40K under the average listing price. But I am very comfortable in my figures.
     
  10. Pat Butler

    Pat Butler Senior Member

    12
    Jan 17, 2002
    Professional Status:
    Certified Residential Appraiser
    State:
    Illinois
    I do a lot of ERC work and have found ERC clients to be the least annoying when it comes to value pressure. They do a pretty good job of talking to both (usually, two) appraisers if their values differ by too much (usually 5%.) I've found those sort of conversations to be productive because the ERC client is trying to understand why two appraisals came in so differently.
     
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