A Turnaround Is Coming — Or Is It?
Optimists say 2008 will be the “year of the turnaround,” while pessimists say “not so.” In the May issue of MOBILITY, Alvin “Chip” Wagner III, SCRP, SRA, IFA, asserts that any kind of prediction or bold statement is premature, as diverse factors will mean continued declines in some regions and markets, while other sub-markets throughout the country will improve. Read the article.

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Stigma or No Stigma? – A Unique Property Story
By Bradford E. Charnas, SCRP, GMS, SRA, Charnas Appraisal
As a professional appraiser conducting a relocation appraisal, you’re asked to make adjustments in calculating anticipated sales price based on facts known about the property.  In effect, you must make a judgment call about how prospective buyers are thinking as they consider their purchase. One of the best ways go cultivate this judgment is to watch the behavior of purchasers.

A recent entry in the Unique Properties Database involves repaired water damage from a burst pipe.  This was a vinyl-sided two-story colonial with a basement in the Greater Cleveland/Akron area. The second floor bath shower pipe burst while the owners were at work and the water soaked areas of both the second and first floors. A nationally known home restoration company was called and arrived within 24 hours. They professionally dried and disinfected the home, repaired the plumbing and affected drywall, and painted and recarpeted large portions of the home.

The buyer's disclosure statement listed what had happened and what was done to the home to correct it. Key information that was disclosed included that the problem was addressed within 24 hours and the work was done by a professional restoration firm and was backed by a warranty.  Knowing this, the appraiser appraised the home for $207,000, and made no adjustment for a potential "stigma" effect.  The home sold for $205,000, which is within normal variance, confirming that there was indeed no stigma effect.

Share your unique property story!  To have your story (and the lesson learned, published here) e-mail us at webmaster@worldwideerc.org. The stories will be a regular feature in the Appraiser version of Express, published on the first Tuesday of each month.

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HUD: Two Appraisals for Some Jumbo Loans
The National Association of Realtors (NAR) recently reported that on April 1, 2008, the US Department of Housing and Urban Development (HUD) released HUD Mortgagee Letter 2008-09 announcing that mortgages that exceed the January 1, 2008, conforming loan limit of $417,000 may require two appraisals. A second appraisal is required for these loans if the loan-to-value ratio (excluding MIP) equals or exceeds 95 percent and if the property is in a declining market. A declining market is determined by the appraiser or by the lender. The letter also limits the loan-to-value for cash-out refinances. The loan-to-value may not exceed 85 percent of the appraiser's estimate of value if the homeowner pursues a cash-out refinance and the loan balance, excluding the FHA mortgage insurance premium, exceeds $417,000. Check out this and other real-estate related information at www.worldwideerc.org/toolkit!

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Stimulus Rebates -- Affected by Relocation?
The Economic Stimulus Act of 2008 allows for tax rebates for a broad cross-section of Americans. Worldwide ERC® Tax Counsel Pete Scott noted recently, “The IRS will begin sending the rebate checks in May, based on 2007 returns.  The basic rebate amount is $600 for individuals or $1,200 for married couples filing joint returns, with an additional $300 rebate per qualifying child. However, the rebates phase out for incomes over $75,000 for singles and $150,000 for married couples.” He also noted, “The fact that the rebates phase out at these income levels has caused some companies to wonder whether, if taxable relocation benefits put the transferee into or above the phase-out income level, the company should consider compensating the transferee for the loss of the benefit of the rebate.” Scott noted that the rebates are actually advance refunds for 2008, and most transferees whose reported income for 2007 is above the phase-out income level due to taxable relocation benefits will still be able to get the rebate in 2009 based on the lower income on their 2008 return.  Consequently, companies should wait until then to determine whether there is any actual loss of the benefit due to relocation.  Scott has prepared an analysis for companies that is available through the Tax and Legal MasterSource.

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Tales From the Dark Side of Relocation
While most relocations end with smiling transferees happily settled in their destinations, it’s not always so. Many moves involve “atrocities”  that shock (or at least surprise) the most seasoned relocation professionals. MOBILITY author Tamara Bianchi, CRP shares a few some of which may leave you horrified; others in stitches. Read the article.

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