for Relocation Appraisers

[Doug in NC]

The latest relocation request is that properties now be considered "as if vacant", with comment on how the appraiser has considered this factor in the anticipated sale price. How are you other relocation appraisers addressing this? The comment coming from one relo company is that we should be comparing vacant relo houses with other vacant houses (ie. other relos, REOs, and short sales). Unfortunately, none of these are common in the markets I have been appraising in.

To be honest, this work is increasingly becoming more and more difficult to do. Forecasting, appreciation/depreciation considerations, seasonal consideration, decor adjustments, adjustment to listings in addition to sale adjustments. It's getting overwhelming trying to keep up with all of the considerations involved. To make matters worse, each client is requesting a different set of unique requirements and specific verbiage. I'm giving hard consideration to another fee increase, in light of increasing scrutiny and customer specifications for relocation assignments.

 

[Kevin Pennick]

Doug
I haven't heard that one before. But I am of the same mind that these ERC's are getting tougher as time goes on. My experience is when I charge more, they never complain. But how much longer that will be is anyone's guess.

 

[Ken B]

It is my understanding that the relo companies want "staging" to be ignored. A potential buyer is not going to see the pretty flowers on the table or smell the just-baked chocolate chip cookies. They will see the scuffed walls and worn carpet. In the context of a future "most probable sales price", anticipated condition of the property subsequent to the owner's relocation is important. Property condition partially explains why "relo" properties often seem to sell "below market". Relo property owners take their buy out and split. Non-relo buyers may repaint and replace worn carpet after they vacate in order to improve the property's marketability and appeal.

 

[Doug in NC]

My thinking is that the relo companies (some of them) are looking for reasons to get the appraised values down. Lower appraisals will minimize losses and make the managers look better in the eyes of the corporation clients.

Maybe the problem is in the choice of appraisers they have been using. I know a new management company is trying to break into the industry. They are holding appraisal fees to at least 20% below market rates. This is not the way to attract quality appraisal work. Will be interesting to see how they fare by year end.

 

[Ray Miller]

I have gotten that notice from two of my ERC firms.

I think Mr. Brown sumed it up.

Getting the values down is also another consideration. I have been the third appraiser on four ERC in the past 6 weeks.

The last one I did as one of the two I was $80K below the other appraiser. The third appraiser brought it high also. The subject has been on the market now for 120 days at the high end. Now it looks like lower value was where it at.

 

[David Dietz]

I have not received this request as of yet. If the requests causes additional work not typical then I would charge more, however if it is uncommon to find what is being asked then it may not be doable.

My thinking is that the relo companies (some of them) are looking for reasons to get the appraised values down. Lower appraisals will minimize losses and make the managers look better in the eyes of the corporation clients.

Maybe the problem is in the choice of appraisers they have been using. I know a new management company is trying to break into the industry. They are holding appraisal fees to at least 20% below market rates. This is not the way to attract quality appraisal work. Will be interesting to see how they fare by year end.

This is definitely true, I have completed roughly fifteen relos in the past year all of which I was the low end appraiser and all that have sold so far have closed within 5%-10% of my estimate. I read in one of the Mobility mags that the relo companies may begin to select the appraiser rather than allow the homeowner to select the appraiser. I have yet to hear of this happing yet.

 

[Doug in NC]

I read in one of the Mobility mags that the relo companies may begin to select the appraiser rather than allow the homeowner to select the appraiser. I have yet to hear of this happing yet.

I read that too. It would be good for the well-qualified appraisers and the relocation companies, but the transferees aren't going to like it one bit. They don't trust the relo company list of appraisers as it is, thinking we are all in cahoots to provide the lowest value for the benefit of the corporation.