Relocation Appraisals: The Power of Market Analysis

This article is featured in the 2024 edition of the Appraisal Buzz Magazine. Some other features in our magazine include funny Buzztoon comics, industry trends, as well as crazy stories from appraisers and readers like you! Read all these articles and more in the latest edition HERE. If you want to make sure you are receiving the print version of the Appraisal Buzz magazine in your mailbox, sign up HERE.

When I started in real estate in 1998, my mentor specialized in appraising repossession and relocation properties. Initially, I wasn’t sure if foreclosure or relocation work was for me. But since then, I’ve come to appreciate relocation appraisals. In this article, I’ll tell you why.

For those unfamiliar with this type of assignment, here’s a quick primer: Relocation companies help corporations transfer employees quickly by managing the headaches of selling their homes and moving. Those companies will hire one or more appraisers to forecast the property’s likely sales price in a certain timeframe — say, 90 to 120 days. So one main difference between traditional lender appraisals and relocation appraisals is the forecasting aspect: whereas lender appraisals determine a current market value, relocation appraisals try to project what the sales price WILL be. The good news is that there’s no pressure from the client to hit a specific number — the relocation company genuinely wants to know what the asset is worth. 

Forecasting a future price requires understanding the big picture of the market, finding real comparable properties, and keeping tabs on market trends. In these assignments, appraisers are also expected to pay close attention to a property’s condition, including minor cosmetic issues that may affect its immediate marketability.  

The ERC Report 

A crucial tool in this process is the ERC report, which was standardized in the 1980s to make it easier to evaluate relocation properties. The ERC (Employee Relocation Council) report, also known as the Relocation Property Assessment (RPA) report, is a standardized appraisal report form designed to streamline the evaluation process for relocation properties. It was established by the Worldwide ERC, a professional association for relocation and workforce mobility.

Although it seems complicated at first glance, the ERC form is actually a helpful guide that walks you through a systematic, exhaustive property inspection. The ERC report gives a brief summary of the property, followed by a detailed evaluation of the property’s interior. It’s important to document details that lender appraisals often gloss over, like chipping interior paint, outdated fixtures, “vintage” wallpaper, or shag carpet (in vogue back in the day, but not so much anymore). These cosmetic issues may have a very real impact on how quickly a property might sell, which is a key aspect of reporting actual market dynamics. After all, time is money.

Client Rankings

Another unique aspect of relocation assignments is client ratings, a feedback mechanism used to assess the appraiser’s work. After appraisers complete an assignment, clients rate the appraiser based on the quality and thoroughness of the appraisal report, as well as the appraiser’s communication and professionalism throughout the process. Clients assign scores based on their level of satisfaction with the appraisal services rendered.

Client rankings may seem scary to appraisers accustomed to lending work. Being offered a candid critique of one’s work on the regular is a daunting idea. But appraisers who regularly do relocation work crave this feedback. It helps them identify areas of strength and areas for improvement in their appraisal practices. Furthermore, positive client rankings can serve as a testament to the appraiser’s professionalism, potentially leading to increased opportunities and referrals. Conversely, negative rankings may prompt appraisers to reevaluate their approach and take steps to address deficiencies.

Overall, client rankings play a crucial role in maintaining quality and accountability within the relocation appraisal industry, fostering a culture of continuous learning and excellence among appraisers.

Getting Started with Relocation Appraisals

If you’d like to get on a relocation company’s list, expect a thorough company interview. Don’t try to fake your way through this — you need to know your stuff. Taking a course on the ERC form with Worldwide ERC is a great starting point. 

Better yet, get to know fellow appraisers who specialize in these assignments. Networking within organizations like Relocation Appraisers and Consultants (RAC) provides essential support and expertise in this specialized field. When I attend RAC meetings and conferences, I end up in great conversations with fellow relocation appraisers, and I always learn something new. Connecting with others in the industry has helped me immensely, and I also just enjoy the camaraderie

If you want to learn more about relocation appraisals, improve your appraisal skills, and meet others in the field, consider joining us at the upcoming RAC conference in Frisco, TX, this October 3rd and 4th.

Looking back on my career, I see now that getting into relocation appraisals has been a great path for me. It’s fulfilling to help smooth the transition for people embarking on new jobs in new places. And acquiring a deeper understanding of market dynamics has challenged me to sharpen my skills of market analysis — you might even call them a superpower.

For more detailed guidance on navigating relocation assignments and improving your appraisal techniques, visit rac.net.