URAR with ERC Guidelines

[Jim Bartley]

Received order that stated: "URAR Form to be used with ERC guidelines"

Still want interior photos and MLS copies of listings-no adjustment grid or photos. How do I satisfy their requirements (frorecasting, anticipated sales price) with this form. The fee is slighlty less ($400 vs $475) so I don't think thats the motivation. I have my own ideas on how to handle but I would appreciate feedback from forumites, especially if you received similar orders. Thanks.

 

[Pat Butler]

The idea of mixing forms and guidelines is usually OK if the clients wants it. However, in this case it makes no sense.

As you've mentioned yourself, the ERC form requires all sorts of additional analysis that has no equivilent place on the URAR form to make that analysis. What about listings?

The clincher though, is that ERC guidelines require the use of the ERC form! I would have your client provide you with specific guidelines from ERC that they would like you to comply with. But there's no way to comply with all the ERC guidelines by using the URAR.

Pat

 

[Mountain Man]

:? Never seen an order like that, is the situation a relocation or REO? The value definitions and certifications are so different, when you finished hand typing the comments in the addendums on the URAR, you may feel like you have just written a self-contained, narative. At least they offered to pay for the extra goodies. 8O I know the URAR is just a form for reporting, but what would you say in an addendum to CYA and disclose the differences? It would be a heckovalot easier to just use the correct form. I too, will be waiting to see if anyone has a more enlightening answer.

 

[Geoff Hatcher]

I have one client, an AMC who has requested these in the past and there is a local employer who uses these. Problem is, the same amount of work is required, if not more in additional addendum, to accurately develop and Opinion of the Anticipated Sales price. Tried a couple several years ago and won't do them. The main difference is that the typical URAR and Assumptions and Limiting Condition are designed to develop an opinion of Market Value as defined within.

The ERC appraisal is designed to develop an opinion of the anticipated sales price over the next 90-120 day market utilizing the Sales Comparison Approach only and taking into consideration competing listsing. As the appraiser is going forward in time, (rather than a value up to a specific effective date) forecasting maybe necessary. Appraisal may or may not invoke departure depending on the market. On a URAR alot of additional addenda is necessary to comply.

The AMC expects a substantially discounted fee to complete and Relo on a URAR. And sell these based on fee savings rather than appraiser's variences.

I recently did a corporate buy-in inventory home for the employer who uses these types of reports. Property was bought in for $165,000 and had been on the market for almost a year, my anticipated sales price over the next 90-120 days was $135,000.

Had an extensive discussion with the relocation department on the beneifits on utilizing the ERC form and choosing appraiser's based on there varience's rather than saving $125.00 on an appraisal would benefit them in the long run. This particular property will take 240 appraisals to justify the savings.

The thing is, if the appraiser's had done the work required, they should've come to the same conclusions as I.

Familiar with an other deal the same employer presently has in inventory, I was engaged by a buyer who was negiotiating on the deal. The listing Realtor provided him with the two appraisal for Relocation purposes completed on URAR's from last year. I don't think too many people are willing to do these as both appraisal were done by the same Appraisal company, but had two different staff appraiser's who completed them. Anyway without rambling, the employer is going to need to save on an additional 350 appraisals to make up on this deal as he is presently under contract for more than $42,000 less than the buy-in.

As select markets tend to demostrate unstability, I feel it is important for every Relocation department to assess there current appraisal policies.


Geoff Hatcher
Hatcher Appraisal Services

 

[Jim Bartley]

Well I thought about this over the weekend and came to the conclusion that this would be misleading. I called the AMC this morning to tell them I would not complete as ordered, I said I would not charge an inspection fee and it's no problem if they want to reassign. I got transfered to a review appraiser who said she understood that it really wasn't right to order these on the URAR and they were trying to work with this particular client on changing this. I jokingly said, "well they can't be doing this to save a few bucks?". She said that really was the motivation. Without them asking I said I would complete on the ERC form for the reduced fee, on this one only. My main concern wasn't the fee, but the possible problems this could cause in the future.