Help Please!!!! with appraisal types

[prmadsen]

Can anybody please answer my previous question on appraisal types ie difference between amortgage appraisal for purchase verse a relocation appraisal.

I'll take any help I can get but I was told this is a good place to get reply's from the experts.

Thanks

Pete

 

[Pamela Crowley (Florida)]

Pete,

The relocation appraisal is more complete and the vast majority of relocation appraisers are typically held to a higher standard. The eventual sale price of the particular property is compared to the relocation appraisals and statistics are kept to determine which appraisers are closest to the actual sale prices.

The only difference would/should be the marketing time, ie: the real possibility that the price might be a little lower if the seller needed to sell right away instead of having the leisure time of being able to wait for a possibly higher price.

I hope this helps you. There really shouldn't be anything but very minor differences.

 

[Ron Turner]

Pete,

I agree with Pam on the marketing time, also for some are interior photos.
However, the big difference is about $200.+

 

[Dee Dee]

Perhaps the question is wether or not there is a difference between the forms of a relocation appraisal vs. a standard one?
I've never been asked to do a relocation appraisal...know little/nothing about them, but I also would be interested if someone could jump in and give a more detailed explanation of the differences between the two so that I could be better prepared if it ever comes up.
Thanks,
Dee Dee

 

[Ray Ohler]

The "basic" differences in the report "forms" are that more information is required on the "form". Notice the "". A lot more details are filled in. Doesn't NECESSARILY mean that more details are gathered. The BIG difference is in the definition of value. ORDINARILY (meaning not always) when performing a "current market value" appraisal (for whatever reason) you are developing an opinion based on the "most probable sale price a ..." - when doing MOST relocation appraisals you are developing an opinon of the "most probable selling price", appears to be a play on words but SOMETIMES is not. I'm not trying to be difficult, I'm just trying to state the differences CLEARLY so someone doesn't take off for outer space. In a market where everything is selling in a few hours, there PROBABLY won't be much, if any, difference between the two. If you are in a "stable" market with slight appreciation there MIGHT be a slight difference. If you are in a "sluggish" market and so on and so on. Bottom line, it all depends on what you are appraising when. Could be a "little more work" could be A LOT more work. The fee, in MY opinion, is justly higher for relocation appraisals across the board for those times when you break your back, other times you make the "gravy" (never happened to me that often). Besides, if you just TRY and give the relo companies a "sliding scale" you can GUESS what will happen.

 

[Austin]

In a nutshell: A relocation appraisal is a question for Mrs. Cleo, and a typical appraisal is a question for an appraiser. I did relocation appraisals years ago and one day I got a report card in the mail giving me a 94% rating meaning my appraisals were typically 6% below the eventual sale price. At that time, the definition of market value was the same so the relocation company was asking one question and grading the appraiser on the basis of a totally different question. I haven't done any since for that reason. In my opinion, they are not asking for an appraisal, but they are asking for a prediction. My crystal ball is in for calibration so I am out of that business until it gets back. If they want a prediction, appraisers should use competitive offerings and rate the competitive position of the subject property in relation to the market conditions and competing properties.

 

[Travis McGee]

I hope this helps. It is hard for the public to understand that there is a difference between an apppraisal (the act of estimating value) and the appraisal report. The basis behind the appraisal itself is set by the client, and there are some differences, but primarily the purpose of the appraisal is to estimate market value. Market value has a very specific definition used by appraisers. If the purpose of the appraisal was stated to estimate market value, then the value opinion should not change no matter what type report is being written.

There are many different types of reports, the standard ERA relocation report form being one of them. This form is called a summary appraisal report. Sometimes in a relocation the client asks the appraiser to estimate value based on an hypothetical condition such as a marketing period shorter than that typically shown in the marketplace. If this was the case then the appraiser would be required under standards to clealy state that his opinion was based on a hypotheitcal condition.

I know that this becomes confusing and I am sorry. Its even confusing to appraisers!

 

[liznindy]

I perform ERC (relocation) appraisals from time to time (probably around 1 per month).

The main difference (other than the size of the report) is the appraiser is asked to give an opinion on the subject's "Anticipated Sales Price" as opposed to "Market Value" (typical of a mortgage lending appraisal).

What is the difference, you ask?!

Well, like other posters have said, the appraiser is asked to "look in a crystal ball" and determine the selling price of the subject property.

Forecasting adjustments are applied (if warranted) to consider market activity at the time of inspection and/or 120 days in the future (or whatever marketing time the client directs).

For example, Indiana has an increase in market activity in the late spring/summer months due primarily to climate. Additionally, market activity increases when schools are not in session (or near the end of the school year). In winter and around the holidays, market activity is decreased, thus a downward forecasting adjustment is typically applied in appraisal performed during this time period.

Aspects of the home and market appeal are of greater concern and analyzed more thoroughly in a relocation appraisal vs. the standard appraisal. Decor is a consideration in these types of appraisals where the pink countertops, black painted teen's room, etc. must be adjusted for if the typical buyer in that market would see these as a drawback.

The appraiser also provides current listings and considers the competition in the market when giving the opinion of the "Anticipated Sales Price."

 

[Restrain]

Short answer - the relocation appraisal is to estimate the value of the home for the relocation company based on its need to sell the home in X days. They are concerned in liquidating the home and telling the company that employes the employee being relocated how much they are going to have to pay. Odd issues are involved, such as the 'unique' padded wallcoverings that cost $ but any other buyer of the home will remove and replace. Such issues can reduce a home's value by $$$. Remember, the relocation appraisal works for the relocation company, not the relocatee.