Relocation Appraisal large difference in value

[FairfieldTx]

Just had a relocation company had us pick 2 out of 3 appraisers who service our rural county to give us a cash price offer. The two amounts was $340,000 and $327,000, we do not have a current contract and had price listed at $367500.. We live in one of the nicer subdivision in our area and they have larger lots and no HOA and 1/2 mile outside city limits. After the relocation company released the appraisal we noticed the lower offer showed we had vinyl and tile floors. We have distressed engineered hardwood throughout the house except tile in bathrooms and laundry room. I tried to get it corrected but the relocation. Company said that the appraiser said that is how he is supposed to list it, is that correct? The higher appraiser listed it as wood. We have dropped the price to $358,000 and have 60 days to try and sell before we have to accept the cash price offer. Also there was a discrepancy on the higher offer with our pool liner needing to be replaced per the client (relocation company) but we had already had that done before listed so the higher offer may be going up a little more. It did appear that the higher appraisal used 6 months of comps and the lower offer only used three, so less to chose from. Again we are in a rural county so not as many houses come on the market as often. Any advice on this would be appreciated. Is this variance in value usual or should it have been closer

 

[FairfieldTx]

Just had a relocation company had us pick 2 out of 3 appraisers who service our rural county to give us a cash price offer. The two amounts was $340,000 and $327,000, we do not have a current contract and had price listed at $367500.. We live in one of the nicer subdivision in our area and they have larger lots and no HOA and 1/2 mile outside city limits. After the relocation company released the appraisal we noticed the lower offer showed we had vinyl and tile floors. We have distressed engineered hardwood throughout the house except tile in bathrooms and laundry room. I tried to get it corrected but the relocation. Company said that the appraiser said that is how he is supposed to list it, is that correct? The higher appraiser listed it as wood. We have dropped the price to $358,000 and have 60 days to try and sell before we have to accept the cash price offer. Also there was a discrepancy on the higher offer with our pool liner needing to be replaced per the client (relocation company) but we had already had that done before listed so the higher offer may be going up a little more. It did appear that the higher appraisal used 6 months of comps and the lower offer only used three, so less to chose from. Again we are in a rural county so not as many houses come on the market as often. Any advice on this would be appreciated. Is this variance in value usual or should it have been closer

Also I had provided a list of all the upgrades we did to the house in 2013 when we had to remodel the whole house except for 3 exterior walls and foundation.

 

[alebrewer]

I'm not following what your question is, or what you'd like advice on? Just FYI, a difference in appraised values of less than 4% is not a large difference - it's actually quite a tight difference for appraisals - more especially in rural markets.

 

[TerryRohrer]

A third appraisal is typically ordered if the first two values differ by more than 5%, and you are under 4%. The relocation business is huge and they have established the 5% differential as reasonable.

 

[JTip]

Drop to $340k and hope for multiple offers. Take offers at or above $327 and begin the bidding war.

 

[FairfieldTx]

So I guess my first question is distressed engineered hardwood the same value as vinyl plank? Second question if the higher appraisal adjust the negative value he gave on the pool liner needing replaced which it didn't, if that put us over 5% difference would they request a third appraisal. Or are we stick with what came back. Looks like per the answers they would request third appraisal if over 5%.

 

[alebrewer]

So I guess my first question is distressed engineered hardwood the same value as vinyl plank?

That would be market dependent. In higher priced markets, I'd expect there to be some difference, yet nominal. In lower priced markets, I doubt there is a difference in what the typical buyer would pay when faced with two homes - the only difference being the flooring.

Second question if the higher appraisal adjust the negative value he gave on the pool liner needing replaced which it didn't, if that put us over 5% difference would they request a third appraisal.

To Terry's point, I guess 5% is the norm for ERC work, but I also think it would probably be lender dependent. Again - put yourself in the market participant's position. What's the cost to replace the liner? $1k plus water? How much would you expect a seller to discount the home for that?

 

[TerryRohrer]

That would be market dependent. In higher priced markets, I'd expect there to be some difference, yet nominal. In lower priced markets, I doubt there is a difference in what the typical buyer would pay when faced with two homes - the only difference being the flooring.


To Terry's point, I guess 5% is the norm for ERC work, but I also think it would probably be lender dependent. Again - put yourself in the market participant's position. What's the cost to replace the liner? $1k plus water? How much would you expect a seller to discount the home for that?

No lenders involved here. I don't know the minutia, but understand that when employers offer relocation benefit to employees and then request that they relocate, the Employee Relocation Council (ERC) ecosystem takes over. Realtors provide CMAs and appraisers provide appraisals (both geared toward estimating the Anticipated Selling Price within a specified, future period...120 days being fairly typical) to an ERC member who reconciles the estimates and offers the transferee an buyout. The ERC member/entity then takes possession of the property and sells it to recoup as much of the buyout as is possible. I assume the employer then reimburses the ERC member for losses and their fees. Somewhere I saw where the typical cost for an employee who owns their own home is $100,000, so big misses on anticipated selling prices add up.

 

[Tom D]

The difference in those 2 appraisal values is statistically appraisal insignificant. 60 days is more than enough, around here is still less than 30 days to sell. Goes past that and you have overpriced.
Your asking price of $358,000 x 6% sales commission, if all paid by yous, would leave you 336,250.. And that's better than the low $337,000, with no aggravation.

You dropped your price once, you have over priced it if it goes past the normal marketing time. Then it becomes a ghost listing for the rest of that listing time.

 

[J Grant]

Just had a relocation company had us pick 2 out of 3 appraisers who service our rural county to give us a cash price offer. The two amounts was $340,000 and $327,000, we do not have a current contract and had price listed at $367500.. We live in one of the nicer subdivision in our area and they have larger lots and no HOA and 1/2 mile outside city limits. After the relocation company released the appraisal we noticed the lower offer showed we had vinyl and tile floors. We have distressed engineered hardwood throughout the house except tile in bathrooms and laundry room. I tried to get it corrected but the relocation. Company said that the appraiser said that is how he is supposed to list it, is that correct? The higher appraiser listed it as wood. We have dropped the price to $358,000 and have 60 days to try and sell before we have to accept the cash price offer. Also there was a discrepancy on the higher offer with our pool liner needing to be replaced per the client (relocation company) but we had already had that done before listed so the higher offer may be going up a little more. It did appear that the higher appraisal used 6 months of comps and the lower offer only used three, so less to chose from. Again we are in a rural county so not as many houses come on the market as often. Any advice on this would be appreciated. Is this variance in value usual or should it have been closer

The variance is within a reasonable range, and it would be very interesting to see which price the market is closer to the reality that putting it on the market brings. The floor material and pool liner are too minor items to qubble with regarding the appraisals. Perhps list it a 355k, being that you have a limited time to sell. I frequently see offers come in on the MLS here after a price reduction. Are you listing it with an agent or trying to sell it yourself?