Separating
the Wheat from the Chaff The
Corporate Transfer The above referenced essay is in the free public domain this month at the ERC website's Mobility Magazine, and is by our partner in crime, Fryer, SRA up in Midland, Michigan. Fryer writes a lot of good stuff on relocation valuation establishing most probable sales price, which is not the same as market value. The main difference is that the appraiser can forecast value in the future based on trends, and most probable sales price is generally under a 90 to 120 days on market time window restriction. If it takes 6 months to market a $500,000 house in a local real estate market, the relocation company buying the house from the transferee [ehh.... the transferee's corporate client pays the relocation company to buy and re-sell the house in 90 to 120 days, so they don't have to pay a lot of holding costs for the employee's relocation], then the appraiser establishing most probable sales price has to figure out what the discount on the market price is, in order to sell the house in the proper time period established by the relocation company. Most folks who are getting transferred in this manner, believe that the relocation company makes money off of selling their property after they accept what they think is a low balled offer for gold plated bath fixtures. That is not the case. The relocation company makes their money by the fees they charge the corporate client in their up-front contractual agreement. This is a different breed of cat realty valuation from typical mortgage loan work evaluating single family homes for market value, which by definition assumes a reasonable period of time. Fryer's previous article referenced in the essay link is now archived at the website, so you have to be a member to access it, or you can purchase it on-line. What I find fascinating is that modern day transferees get to pick their own appraiser and to interview them beforehand. Although it didn't used to be this way, as the relocation company used to pick their appraisers, there are similarities between mortgage lenders who go appraisal shopping to hit a number, like modern day corporate transferees. I probably get four or five calls a month from some relocation company wanting to know if I will go to BooFoo, Missouri for a relocation appraisal, and they will put me on the list. Sometimes I get the job. Sometimes I don't. But, I never get the job when the transferee calls me to interview me to determine if I am going to appraise his house at his already inflated list price, that some Realtor listed way too high. Listing a $150,000 house in BooFoo, Missouri at $180,000, $30,000 over the value of the property should be grounds for removing Realtor licenses, in my view -- but they don't hold that view in Jefferson City at the Real Estate Commission. They should! Likewise I don't work for lenders who call me from all over the Planet Earth wanting a comparable search on a property they want to make a loan on, and want a predetermined value for the property before they order the appraisal. I flatly refuse to do comp searches, which these rascals turn into verbal appraisal reports to land me in court and in jail. Leavenworth is a fine place to visit, but I have no hankering to live in Kansas! Not only has the lending industry gone berserk under the Greenspan FED, corporate America uses the realty valuation industry to pump values to hide the kick-backs they want to give to their employees moving 'em from BooFoo, Missouri to Indianapolis, Indiana and other places only God Knows Where. When I talk about the realty valuation gig being one of the most rigged and most controlled industries to be a participant in, I usually defer the reason why to the Banking Cartel that runs and rigs the realty valuation gig through the Appraisal Foundation, Fannie Mae, other assorted GSEs, professional realty valuation organizations and appraisal management companies in the pockets of professional realty valuation organizations. Fryer has opened my eyes a little wider. There is no stone left un-turned to put client pressure on the real estate appraiser to do his job. Corporate America has a big hand in it, too! Professional realty valuation organizations now about to mandate 125 hours of CEUs instead of 100, so that a member can profess compliance with Universal Rigged Standards of Professional Appraisal Practice in the realty valuation gig is a real joke under the Banking Cartel and Corporate America! I am ready to get my HAZMAT commercial driver's license! -- realty valuation gurus are going to need one!
Ole Bear, Editor © 2005 Realty Reality |
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