CRPA CRPA Corporate Relocation Policy & ERC Guidelines 1 — Questions and Answers
Question 1: What organization publishes the primary industry standards and guidelines that govern relocation appraisal practices in the United States?
- The Appraisal Institute (AI)
- The Employee Relocation Council / Worldwide ERC (Correct answer)
- The National Association of Realtors (NAR)
- The Federal Housing Finance Agency (FHFA)
Correct answer: The Employee Relocation Council / Worldwide ERC
Worldwide ERC (formerly the Employee Relocation Council) publishes the relocation appraisal standards and guidelines most widely adopted by corporations and RMCs in the U.S.
Question 2: Under Worldwide ERC guidelines, how many independent appraisals are typically required to establish an Appraised Value Offer (AVO) for a transferee's home?
- One appraisal commissioned by the employer
- Two independent appraisals, with a third ordered if the first two diverge significantly (Correct answer)
- Three appraisals averaged together regardless of spread
- One appraisal plus a broker price opinion (BPO)
Correct answer: Two independent appraisals, with a third ordered if the first two diverge significantly
ERC guidelines call for two independent appraisals; if those values diverge beyond an acceptable threshold, a third appraisal is ordered to resolve the discrepancy.
Question 3: What is the primary purpose of a corporate relocation policy?
- To set the appraised value of the transferee's home
- To define the scope, benefits, and reimbursements provided to employees during a company-initiated move (Correct answer)
- To establish the legal chain of title for relocation property transactions
- To determine the tax liability of the relocation management company
Correct answer: To define the scope, benefits, and reimbursements provided to employees during a company-initiated move
A corporate relocation policy documents what financial and logistical benefits the employer will provide to employees who relocate at the company's request.
Question 4: Which term describes the maximum dollar amount an employer will pay toward a transferee's relocation benefits?
- Equity cap
- Policy ceiling / policy cap (Correct answer)
- Reimbursement floor
- Differential threshold
Correct answer: Policy ceiling / policy cap
A policy cap or policy ceiling is the maximum amount the employer commits to spending on a single relocation, beyond which the transferee bears costs personally.
Question 5: In ERC relocation appraisal guidelines, what does 'anticipated marketing time' refer to?
- The number of days the appraisal report is valid for program use
- The estimated time it should take to sell the property at its appraised value in the current market (Correct answer)
- The period during which the transferee must accept or reject the AVO
- The maximum time the RMC will hold the property before reducing the list price
Correct answer: The estimated time it should take to sell the property at its appraised value in the current market
Anticipated marketing time is the appraiser's estimate of how long it will realistically take to sell the property at the recommended list price under current market conditions.
Question 6: Which of the following is a key distinction between a relocation appraisal and a standard mortgage appraisal?
- Relocation appraisals use only the cost approach, while mortgage appraisals use the sales comparison approach
- Relocation appraisals include a recommended list price and anticipated marketing time, which standard mortgage appraisals do not (Correct answer)
- Mortgage appraisals are always higher than relocation appraisals for the same property
- Relocation appraisals are performed without a physical inspection of the property
Correct answer: Relocation appraisals include a recommended list price and anticipated marketing time, which standard mortgage appraisals do not
ERC relocation appraisals uniquely require the appraiser to provide a recommended list price and estimate of marketing time, elements not required in standard mortgage appraisals.
CRPA CRPA Corporate Relocation Policy & ERC Guidelines 1
What organization publishes the primary industry standards and guidelines that govern relocation appraisal practices in the United States?