Relocation Appraisal Services
Domus Appraisals was founded in 1971 based upon the premise of relocation appraisal services. Many aspects of the employee relocation industry have changed over the years, but the success of all employee relocation programs depends on the accuracy and experience of the relocation appraisers.
A relocation appraisal is needed when a corporation (Pepsi, Pfizer, NIKE), government agency (CIA, DEA), or some other entity decides to relocate one of its existing or future employees. In an effort to make the relocation process easier on the employee (referred to as the transferee), they will be offered a buy-out from the relocation company or employer. In most cases, the transferee will try to sell and market their property conventionally with a real estate agent while waiting for the buy-out offer.
Relocation Appraisal Process
Once a transferee enters the employee relocation program, they are typically provided with a short list of relocation appraisers to contact and interview. One of these will to be selected to initially perform independent relocation appraisal services. In some instances the transferee may decide not to individually interview (by phone) the potential appraisers, but to make a selection based off of the appraiser’s locations or the recommendation of the real estate agent. It is highly recommended to take the time to interview each of the appraisers. From a brief conversation you can assess the appraiser’s level of professionalism, experience with relocation appraisals, and knowledge of your local area.
Once the appraisers are selected, they will perform an inspection of the property with the purpose of gathering any information considered to be pertinent to its valuation. Once the appraisals are submitted to the relocation company, the transferee will be offered a buy-out as long as the appraised values are within a specified spread, typically 5%. If the values are within the required spread, then the average of the appraised values is offered to the transferee. If the values are ‘out of spread’, then a third appraisal will be retained with the closest two values being averaged.
The Difference Between Relocation Appraisals and Mortgage Appraisals
Relocation appraisals are considered to be a specialized segment of the real estate appraisal industry. Aside from being completed on different appraisal forms, the relocation appraisal requires a more in depth analysis of the past, present and future (anticipated) markets. A ‘mortgage’ appraisal focuses on the past and present markets.
In a relocation appraisal, the appraiser is requested to provide an anticipated value of the subject property given the typical marketing time restriction of 90-120 days. In other words, the appraiser is asked, “What will this property sell for if it had to be sold within 4 months.” This is the main difference when compared to a ‘mortgage appraisal’, where the current market value of a property is usually requested. The ‘current market value’ and the ‘anticipated sales price’ of a property can be and usually are different. The variances in these values can be found when the appraiser answers the following questions:
- Is the local real estate market expected to increase, decline or be stable within the next 4 months?
- What is the estimated normal marketing time for the subject property and how does it compare to the relocation company’s required marketing time?
- What level of competition is the subject expected to face within the next 4 months?
In declining markets, the current market value of a property is often higher than the anticipated sales price. This is usually due to the extended marketing times and decreasing market values experienced in a declining market. Conversely, in an increasing market, the current market value is lower than the anticipated sales price, especially if market values are expected to increase in the coming months.
Domus Offers Quality and Timely Relocation Appraisal Services
Relocation appraisals are one of the few appraisal types where the accuracy of the appraiser can be analyzed since the appraised value will be compared to the eventual sale price of the property appraised. This allows relocation companies to rate the appraisers and keep the most accurate on their approved panels.
Domus Appraisals has been serving some relocation companies for over 40 years. Our relocation appraisals services are consistently accurate and completed within an accelerated time frame. Our experience and knowledge of the relocation process is unrivalled. Call us today at 1-866-939-5979 or fill out a contact form.