Outside Looking In—Curbside Appraisals Emerge as a Popular Alternative
As our reality becomes more virtual by the minute, face-to-face interactions (even with social distancing) are difficult to schedule. So, what alternatives are there to keep moving forward when so much has paused? To help our Clients stay on course, Cartus’ Property Evaluation Team partnered with our Appraisal Management Companies to provide appraisal alternatives when home selling is critical for a successful move. Yes, you have options! If a meal can be curbside, so can an appraisal.
How do curbside appraisals work? An appraisal for value requires two key components, exterior and interior inspections. But what if state requirements or personal preference make it impossible to physically inspect the inside of the home? This is when the curbside appraisal is a great alternative to continue providing the guaranteed buyout option to your employees. During a curbside appraisal, the appraiser will inspect and measure the exterior of the home and then guide the customer through a video conference call to inspect the interior. Customers are finding this to be a positive experience as well as educational, and based on the estimated recovery period post-COVID-19, this may very well be the new norm. Although we would continue to rely heavily on disclosures, BMAs, and inspection reports (if available), keep in mind there is always some level of risk in not physically inspecting the interior of the home.
We’ve provided a solution to the lack of physical inspection, but what about the value itself? How do appraisers apply forecasting for the next 90-120 days when the current real estate and lending markets are so fluid? Unlike other historical events, COVID-19 doesn’t have a specific point of impact and the future state will be uncovered as we progress through the months to come. This leaves appraisers challenged to determine market forecasting and make adjustments when there simply isn’t enough data yet. A solution is applying adjusted value. The adjusted value percentage would be determined by you, as the Client, based on your risk tolerance to the lack of forecasting and physical internal inspection. For example, if you determined your adjusted value percentage to be 3% and the average of the appraisals was $100,000, the guaranteed buyout offered to the employee would be $97,000. This approach can help offset potential resale loss and additional carrying costs while in inventory.
These alternatives give you the ability to continue your relocation programs and keep your business moving forward. When considering what your "go forward" approach will be, remember to ensure you are applying any changes consistently across each policy, and always review any potential changes with your Cartus Account Manager for guidance and support. Your Cartus Team remains by your side as we continue to uncover challenges and provide you with creative solutions!