What’s an ERC?

 If your job ever requires relocating, many employers offer relocation benefits packages, which can include an employee home purchase program. When you put your current home on the market and take advantage of your employer’s relocation assistance, the important thing is not the fair market value of the home, but its anticipated sale price.

An Employee Relocation Council (ERC) appraisal is prepared differently than a standard appraisal. The purpose of a standard appraisal is to evaluate the property and estimate a value as of the day the property was visited by the appraiser; the purpose of an ERC appraisal is to get a sense of the anticipated sales price of a relocating employee’s residence as of a projected future date. Relocation appraisals are typically based on recent closed sales and competing listings in the area.

Most relocation companies use two appraisers for each property, ensuring a high degree of accuracy. If there are two appraisals, the valuations should be within 5% of each other.

In very rare cases, the two valuations may differ by more than 5%. This can happen when the subject property is unique or the market is very difficult to quantify. In the event that there is a difference of opinion, a third appraiser is usually contracted to appraise the property. The third appraisal should fall within 5% of one of the two original appraisals. The minority report, as it were, should be disregarded.

By: Present Value

Tags: Employee Relocation Council, ERC
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