“Don't Throw a Curveball” What's the Difference – Regular or Relo for Mortgage, Appraisal and Inspections?

“Don't Throw a Curveball” What's the Difference – Regular or Relo for Mortgage, Appraisal and Inspections? Panelists Introductions, Erica Burton – Chase Moderator: Brit Bemis – Churchill Living Kathryn Graham – Abbott Labs Tony Dougherty – Aires Relocation Larry Sontag – Fidelity Residential Solutions

Agenda/Objectives The Home is a COMPLEX and AMAZING structure Type of reports used for parties to a relocation home sale and why INSPECTION - Relocation Property Assessment Report (RPA) Purpose, scope, objective and definition Differences between the RPA/Inspection and Buyers Report INCLUSIONS and Considerations (WERC Protocols) EXCLUSIONS and NON-Considerations (Outside influence) APPRAISAL – Differences between Mortgage and WERC Appraisal Mortgage Appraisal Form WERC Summary Appraisal Form Quick comparison of both appraisal forms Q & A

The Home is a COMPLEX and AMAZING Structure (Mixes Fire & Water for 100 Years!)

Relocation Property Inspection & Appraisal Reports There are multiple parties with each home sale. Balancing all their needs can be a ”CLIFF-HANGER”: Transferee/Seller Corporate Client RMC Buyer Lender For the relocation suppliers our customer is the corporate client To help the client manage risk and cost, TWO industrywide accepted reports are used: The WERC Relocation Property Assessment Report (RPA) The WERC Summary Appraisal Report Other parties to transaction – Buyer and Lender These parties have different needs, motives and requirements Therefore, they use their own report types

Relocation Property Assessment Report RPA – WERC Inspection PURPOSE AND SCOPE - To provide a professional “opinion” of a relocating employees home and it’s immediate surrounding area in its “as-is” condition, as of the “date of assessment”, limited to the definition and guidelines established by the Client using a standard industry accepted Property Assessment document. OBJECTIVE - To provide the Client with data about the employee’s home and immediate area, based on a visual assessment of items identified by category, in a Property Assessment document with supporting pictures, etc. DEFINITION – A visual, “non-invasive” evaluation and status report of the items identified by category, reporting apparent defects (not including cosmetic deficiencies) that call for corrective action, limited to the following categories: Structure Unsafe or hazardous condition Inoperative systems or appliances

RPA Inclusions and Considerations Subject to purpose, scope, objectives, definition, policy & protocols established by WERC guidelines. THE Challenges – Why is RPA different from Buyer report? Functionality (Works or doesn’t work on “date of inspection” - AC example) Intended Use (Garage door is dented needs paint, but works as intended) Presence/Or Lack Thereof (Something breaks or is removed after inspection - Smoke detectors) Accessibility (Attic or crawl space inaccessible) Safety (Local code does not apply) Policy (Driven by RMC or Client Policy as well as RPA guidelines)

RPA Exclusions & NON-Considerations THE Challenges – Why is RPA different from Buyer report? CHANGING CONDITONS Time between inspection and sale, locals factors, personal tastes, vacant home, buyer views home 24 hours before closing INFLUENCERS Buyer’s Realtor and inspector offer input, buyers perception, etc. EXCLUDED PHYSICAL PROPERTIES Local code compliance, efficiency or future performance available to buyer, not in RPA No Open Dialogue in RPA RPA and Buyer’s reports serve completely different “Needs & Purposes”! They naturally compete against each other

Appraisal Reports The differences between Mortgage and WERC Appraisals Mortgage Appraisal – FNMA Form 1004/FHLMC Form 70 Uniform Residential Appraisal Report – Revised March 2005 Intended Use - Lender/Client - To evaluate property for a mortgage finance Meets Uniform Standard of Professional Appraisal Practices 6 pages, 3 comps, valuation as of “date of appraisal” Approximately 1300 data points of information “Indicated” Value – Comparison/Cost/Income (If applicable) Includes Cost Approach as well as Comparable Value Contains street map and pictures of subject and comps Appraiser sketch of the exterior buildings dimensions Real estate purchase contract may contain Appraisal Rider If property does not appraise for sales price, seller must accept lower appraised price, or buyer may void contact

Appraisal Reports The differences between Mortgage and ERC Appraisals WERC Summary Appraisal Form Intended use - Assist the employer with an “opinion of the anticipated sales price” 7 Page form developed by WERC - Revised in 2010 3 sales comps, PLUS 3 “Listings” comps Approximate 1900 data points of information Forecasted Trends Section (Predict the future using known data) Marketing Time up to 120 days Market Segment – Forecasting pricing increases or decreases in sales activity Forecasting Adjustment - Historic trends and factors that require a price adjustment (If applicable) based on assignment marketing period (e.g., mood of market, season, economic and employment shifts, demographics trends, buyer profiles, etc.) Value listed as “Anticipated Sales Price” Typically “Two” appraisals using average of both, possible third if out of spread

Appraisal Reports Quick summary between Mortgage and WERC Appraisals Relocation Intended Use Facilitate Mortgage Lending Facilitate Corporate Relocation Purpose Estimate Market Value Estimate Anticipated Sales Price Form Uniform Residential Appraisal (1004) WERC Summary Appraisal Form (updated 2010) Market Value Exposure Precedes Date of Appraisal Marketing Occurs AFTER Date of Appraisal Decision Making Immediate Future (up to 120 days) Marketing Time None/Sold 0 -120 days Retrospective Analysis No Forecasting Forecasting Trends Design FNMA/FHLMC Guidelines WERC Relocation Centric NOTE: ALL appraisals are OPINIONS produced by human beings!

Any Questions? Thank You!