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Difference between Mortgage appraisal and Relocation appraisal

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prmadsen

Thread Starter
Freshman Member
Joined
Mar 7, 2002
Hey everyone,

I have some questions regarding types of appraisal. I am currently selling my home in Atlanta due to corporate relo. My company has a corporate relocation firm who will buy my house if it does not sell in a certain period of time. They are going to give me a list of corporate appraisers in My area (Henry County Georgia) and I will have to pick two of them or find two on my own who specialize in appraisal for corporate relocation. If they are within 5% of each other they will take the average and that will be their offered price.

I had my house appraised for a possible sale last year (not associated with a corporate relo) and expect the number to be lower this time around. Is that a correct assumption and if so, how much lower should I expect.

What questions can I and should I ask?
Do they consider realtor fees etc. when doing this appraisal?
What is the difference in the this appraisal and a typical appraisal for sale?

I have a great company and they take care of their folks. I just don't want to get blind sided by an extremely low number.

Help

Pete
 

Jim Bartley

Senior Member
Joined
Jan 20, 2002
Professional Status
Certified Residential Appraiser
State
Virginia
The main difference between a conventional appraisal for mortgage purposes and a relocation appraisal is this: A regular appraisal answers the question "what is my house worth now-today". A relocation appraisal answers the question: "what is the probable selling price of my house within the forecasted marketing period-what will the house sell for in the near future based on a typical marketing period of say, 90 days." A relo appraisal goes into a lot more detail and has more of a focus on current competive properties. You may want to give the relo appraisers a copy of your recent appraisal.
 

Mountain Man

Elite Member
Joined
Jan 15, 2002
Professional Status
Certified General Appraiser
State
Georgia
A Relo appraisal is not appraising for market value, like your typical URAR for mortgage purposes, it is to estimate Anticipated Sales Price. So yes, there may be some seller paid concessions that have to be considered for the net result. It depends on what it typical in your market.

Another difference is that the client may require a specific marketing period, this could have an impact on the final value. If the typical marketing time in your area is six months, but the client requires no more than a 90 marketing period, some discounting may apply.

The appraiser will also look at what is on the market now, to consider competition, and get an overall view of the local market.

Many relo companies will ask that you fill out some market survey forms, etc. That is more or less for your own educational purposes to become familiar with the current market. If you are working with a knowledgeable real estate agent that has experience with Relo's, they will know all of the ropes. Get your agent to help you put some data together. It is okay to share any info that you think is important to the appraiser, but the appraiser will judge if they think that it is pertinent, current market data. The appraiser will (or should) verified all data to be accurate through other sources like tax card, deed records, data subcription services, etc. We can't just take any ones word for it because it is in MLS. MLS is NOT an accurate source.

With how Henry Co. has grown, I hope you get a quick sale. It amazes me how fast they keep building!

Mell.
 

Verne Hebert

Senior Member
Joined
Feb 25, 2002
Professional Status
Certified General Appraiser
State
Montana
Having done "relo's" for twenty years now. The most significant difference is the relocation valuation is based upon a defined marketing period by the entity ordering the relocation appraisal. Whereas the market value of a "mortgage" appraisal is based upon the typical marketing periode. I have seen tremendous differences in "value" due to the differences in entity defined marketing period and typical marketing period.l

Good luck!
 

Ted Martin

Senior Member
Joined
Jan 17, 2002
Professional Status
Certified General Appraiser
State
Kansas
It might help if you considered a relo appraisal in the same light that you would view a stop loss order for a stock transaction. The relocation company is underwriting the risk of the sale of you home and offering you a stop loss on the homes sale price which is established by the REO appraisal. The relocation company wants to know how much they can sell the home for within a limited marketing period (usually 90 - 120 days). If the homeowner has the opinion that the home is worth more, then they are free to list the home at a higher price. Unfortunately homeowners tend to listen to the listing agents that tell them what they want to hear, overpricing the home. At this point in the process the selection of the listing agent is more important than the value estimate of the REO appraisal. The REO appraisals value only kicks in if you don't sell the home. Take a hard look at the CMA (Competitive Market Analysis) that the listing agents will develop to get your business. If it is done correctly a CMA will reflect both the sold and the active listings which you home will be competing against. Price you home so that it is slightly below the top of the market and you will probably realize a quick sale which will be higher than the REO appraisal value and possibly below the value of the conventional loan appraisal that you have.

What is the overall situation in your market, is your relocation a personal move of you only or is it part of a larger downsizing of your company that could adversely impact the local economy. Most relocation companies try to minimize the impact of a markets primary employers large scale moves by asking for appraisals which predate the formal announcement of the move. An example would be an appraisal which is ordered in April with an effective date of value in January, because the company announced the plant closing in February. In this situation the REO appraisal might have a higher value than a conventional appraisal with an April effective date because of a larger supply of homes for sale.
 

Steve Owen

Elite Member
Joined
Jan 16, 2002
Professional Status
Certified General Appraiser
State
Missouri
It might help if you considered a relo appraisal in the same light that you would view a stop loss order for a stock transaction.
Excellent analogy, Ted.

Concerning questions you might ask. When interviewing appraisers to be considered for this job, ask them if they are familiar with the ERC form and how many relo appraisals they have done. Also, ask them what the difference is between a regular appraisal and a relo appraisal and then look for them to give answers similar to those that have been posted here. Finally, be sure to ask them if they are familiar with your marketing area and neighborhood.
 
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