Relocation Appraisals

Garrett Appraisal Service is very active in the relocation appraisal sector of the single-family residential market. Relocation appraisals are very thorough reports. A relocation appraiser not only looks for the most recent sales, but active and pending listings. Relocation appraisals require special training, skills and expertise.

Relocation appraisals are different than a typical mortgage appraisal. The value being sought in a mortgage appraisal is market value. The value being sought in a relocation appraisal is the Anticipated Sales Price. The definitions of these two values are similar, but very different. I am going to highlight the differences.

The Market Value definition includes (3) a reasonable time is allowed for exposure in the open market. "Reasonable time" in this definition means if it takes a year for a home to sell in the current market, then for that market at this time, one year would be a reasonable time allowed for exposure in the open market.

A relocation company does not want to own a home for a year. They want to help facilitate the move by the employee, but not be in the real estate ownership business for an extended period of time. The Anticipated Sales Price definition includes (4) A reasonable marketing period, not to exceed 120 days and commencing on the date of appraisal (inspection), is allowed for exposure in the open market. The analysis assumes an adequate effort to market the subject property. The Anticipated Sales Price definition also includes (5) Forecasting is applied to reflect the anticipated trend of market conditions and prices during he subject property's prospective marketing period.

The biggest difference is that reasonable marketing period is limited to 120 days or 4 months in a relocation appraisal. The forecasting adjustment is influenced if the anticipated marketing period will take more than 120 days. The forecasting adjustment is also influenced by any anticipated increase, stable or decrease in value during the 120-day marketing time.

The typical Garrett Appraisal Service relocation (ERC) appraisal will have various graphs and charts in the report to assist in knowing the anticipated marketing period and the trends in value in the subject market area. They also assist in formulating a market change adjustment if one is needed. The following graphs and charts are typical in one of Garrett Appraisal Service ERC appraisals. These graphs and charts are from approximately April 1, 2009 and will not be updated often, but provide an indicator of the quality and quantity of data used to assist in an ERC appraisal.