THE DOW CHEMICAL COMPANY PROPERTY PURCHASE PROGRAM MIDLAND, MI

Transcription

1 THE DOW CHEMICAL COMPANY PROPERTY PURCHASE PROGRAM MIDLAND, MI FEBRUARY 2012 Page 1

2 Contents PAGE DESCRIPTION 3 Letter from Dow 4 Introduction and Program Area 6 Eligibility and Next Steps 7 Summary of Program Benefits 8 Offer for Owner Occupants 13 Offer for Rental Property Owners 17 Offer for Owners of Unimproved Property 21 Offer for Renters 23 Questions and Answers 24 Recommended Appraiser and Broker List 25 Appraiser Instructions, Definitions and Work Scope 28 Dow Appraisal Request & Authorization 29 Dow Renter Benefits Request Form The information contained in this booklet provides a description of a voluntary Property Purchase Program sponsored by The Dow Chemical Company. It is not an offer to buy property. Page 2

3 Letter from Dow Dear Property Owner or Renter, The Dow Chemical Company (Dow) is offering a voluntary property purchase program for homes located east and north of Michigan Operations. Details of the Property Purchase Program, including incentive opportunities and relocation assistance features, are explained in this Program Handbook. Eligible Properties are listed on page 4. As you know, property use near the fence line of Michigan Operations has changed over the past 50 years. To address this non-conforming land use and give people still living in this increasingly industrial/commercial area the choice to move elsewhere, Dow is offering homeowners in this area an incentivized voluntary Property Purchase Program. The program will also provide relocation support for those who rent their homes, provided the property owner participates in the program. This Property Purchase Program is entirely voluntary. It is designed to give you the option to move to a residential area if you so choose. It will be up to each eligible homeowner to decide what is right for them. For those who decide not to take advantage of this program, Dow will offer to remediate their properties as part of the work plan that Dow will submit to the Michigan Department of Environmental Quality (MDEQ) in March. Dow will donate acquired properties to Midland Tomorrow, the nonprofit economic development entity serving Midland County. To administer the voluntary Property Purchase Program and help you understand your options, Dow has retained a real estate consulting firm, Community Interaction Consulting, Inc. (CIC). For your convenience, CIC representatives will be available to meet with you to discuss the program and answer questions beginning February 21, 2012 at the Midland Resolution Center office, 1008 Jefferson Avenue, Midland. Office hours will be 9 a.m. to 5 p.m., Monday through Friday. The phone number is We understand that relocating can be a difficult decision, and that you will want to take time to consider the advantages of the program being offered. This Handbook contains a great deal of information about how the various aspects of the program will work. A website is also available with this same information. We hope that you find it helpful and will contact CIC if you are interested in participating. Sincerely, Rich A. Wells Vice President and Site Director, Michigan Operations Page 3

4 Introduction The Property Purchase Program (the Program ) sponsored by The Dow Chemical Company (Dow) is provided as an opportunity for you to sell your property and relocate. The details of the Program are contained in this handbook. Community Interaction Consulting, Inc. ("CIC"), a real estate and communications services company, will administer the Program on behalf of Dow. Should you desire, a CIC representative is available to meet with you privately to go over all the features of the Program and assist you in understanding Program options available to you. We invite you to meet with a CIC representative at the Midland Resolution Center located at 1008 Jefferson Ave. Midland, Michigan to discuss how the Program features may be of benefit to you. A CIC representative can put you in touch with local real estate professionals who can help you identify your housing options. The Program applies only to the Eligible Properties or Eligible Property, described below Bay City Rd Bay City Rd Bay City Rd Bay City Rd. 404 Burgess St. 419 Burgess St E. Carpenter St E. Carpenter St Corning Ln Corning Ln Corning Ln Corning Ln Corning Ln Corning Ln Corning Ln Corning Ln Corning Ln Corning Ln Corning Ln Corning Ln Corning Ln Corning Ln Corning Ln Corning Ln Corning Ln Lincoln St Lincoln St Lincoln St. 317 Sauve St. 323 Sauve St. 404 Sauve St. 811 Third St. 815 Third St. 816 Third St 819 Third St. 820 Third St Third St Third St Third St Third St Tibbs St Tibbs St. 112 Wexford Ave. 116 Wexford Ave. 202 Wexford Ave. 207 Wexford Ave. 208 Wexford Ave. 211 Wexford Ave. 215 Wexford Ave. 216 Wexford Ave. You are eligible for the Program if you are the owner or renter (Renter of Record) of an Eligible Property in the Program Area (described and shown above), as of February 15, You may sign up for the Program between March 1, 2012 and June 30, To sign up, contact CIC and request an independent appraisal on your Eligible Property. If you sign up for an appraisal on or before April 1, 2012 and you later decide to accept an offer, you will also be eligible to receive an Early Sign-up Bonus. Page 4

5 Requesting an appraisal does not commit you to sell your Eligible Property. Having an appraisal completed simply allows Dow to present you with an offer to purchase your Eligible Property. Once you have received your offer, you can choose whether or not to accept it. Renters The Renter of Record as of February 15, 2012 may be eligible to receive a Miscellaneous Expense Allowance, a Professional Advice Allowance, Home Finding Assistance and Closing Cost Assistance Allowance under the Program (see page 21). Page 5

6 Eligibility and Next Steps You are eligible to participate in the Program if you own (hold good title to) or rent residential property in the Program Area as of February 15, Eligibility for the potential and applicable Program payments, allowances, and bonuses is contingent in part upon you selling all properties that you own in the Program Area. Further eligibility requirements for the potential Program payments, allowances, and bonuses are explained in the following sections, as applicable to the type of property you own. The following are the steps you must follow to participate in the program. Participation is completely voluntary on your part. If you have any questions regarding these steps or what you may be required to do to participate, please contact a CIC representative at the Midland Resolution Center. Step 1: Sign-Up If you are a residential property owner in the Program Area, the first step to participating in the Program is to complete and sign the Appraisal Request Form on page 28 of this Handbook and submit it to a CIC representative. Signing an Appraisal Request Form does not commit you to sell your property. It simply authorizes CIC to arrange to have your residential property appraised. If you rent a residential property in the Program Area, the first step to participating in the Program is to contact a CIC representative at the Midland Resolution Center and sign a Renter Benefits Request Form. The rental property owner must sell all of his/her residential property within the Program Area before a renter is eligible to receive any Program benefits. Step 2: Accept an Offer Non-negotiable offers in the form of a Purchase and Sale Agreement will be made by Dow to residential property owners. If you are made an offer by Dow to purchase your residential property, the second step in participation will be to determine whether you want to accept the offer presented. You will have 60 days to accept an Offer. Step 3: Vacate the Property and Close the Sale The sale will be closed within six (6) months or less from the last date Dow signs the Purchase and Sale Agreement. All properties must be vacant on or before the day of closing. Owner Occupants may be eligible for an equity advance (cash payment) in order to vacate the property and secure alternative housing prior to the day of closing. Program Area Page 6

7 Summary of Program Benefits Below is a list of the potential program benefits you may receive if you are eligible in one of the following categories and decide to participate in the Program. For more information about these benefits, please look to the sections of the handbook that apply to you and/or contact a CIC representative at the Midland Resolution Center. Benefits for Owner Occupants Average Appraised Price or a Minimum Appraised Price of $50,000, whichever is higher Premium Payment based on percentage of Average Appraised Price Potential Allowances and Bonuses: o Miscelaneous Expense Allowance o Rent Disruption Allowance o Professional Advice Allowance o Mortgage Assistance Allowance for purchasing a new residence o Early Sign-Up Bonus Other Assistance o Home Finding Assistance o Equity Advance for purchasing a new residence o All closing costs paid by Dow (excluding commissions, liens and taxes) Benefits for Rental Property Owners (Tenant-occupied or Habitable, Unoccupied Property) Average Appraised Price or a Minimum Appraised Price of $30,000, whichever is higher. Premium Payment based on percentage of Average Appraised Price Potential Allowances and Bonuses: o Rent Disruption Allowance o Professional Advice Allowance o Early Sign-Up Bonus Homefinding Assistance All closing costs paid by Dow (excluding commissions, liens, and taxes) Benefits for Unimproved (Vacant) Property Owners Average Appraised Price or a Minimum Appraised Price of $5,000, whichever is higher Premium Payment based on percentage of Average Appraised Price Potential Allowances and Bonuses: o Professional Advice Allowance o Early Sign-Up Bonus Homefinding Assistance All closing costs paid by Dow (excluding commissions, liens, and taxes) Relocation Expense Allowance Professional Advice Allowance Mortgage Assistance Allowance Home Finding Assistance Page 7

8 Offer for Owner Occupants The Offer The offer applies to the Eligible Properties in the Program Area that are occupied by the property owner (Owner Occupant) as of February 15, The offer consists of the following payments, allowances, and potential bonuses: Payments Average Appraised Price or Minimum Appraised Price of $50,000 whichever is greater Premium Payment equal to 50% of the Average Appraised Price Miscellaneous Expense Allowance of $5,000 Rent Disruption Allowance of $1,000 Professional Advice Allowance of $500 Potential Advances and Bonuses Early Sign-up Bonus of $1,000 per property Clear Site Clearance Bonus of up to $15,000 depending on the nature and number of structures on your property Mortgage Assistance Allowance Average Appraised Price If you are an Owner Occupant, the first part of your offer is the Average Appraised Price for your Eligible Property and the improvements on it (such as a home, garage, outbuilding, etc.). A Minimum Appraised Price has been set for an Owner Occupied property at $50,000. The appraisals will be prepared by local independent appraisers whom you select and will be ordered by the CIC representative. The list of approved appraisers includes local, actively practicing appraisers who are licensed by the State of Michigan. The first step is for you to meet or speak with a CIC representative so you can select two appraisers from the approved list. You do not have to choose an appraiser from the approved list. You may nominate any other appraiser that you wish, and the nominated appraiser will be accepted by CIC so long as the nominated appraiser meets ALL of the following requirements. 1. Is a full-time real estate appraiser that is licensed by the State of Michigan. 2. Holds an SRA, SRPA, MAI, CRP, ASA designation or is able to demonstrate significant experience in preparing appraisals in accordance with the Employee Relocation Council guidelines. 3. Is a member of the local Multiple Listing Service and has additional access to recent comparable sales; AND 4. Is willing to prepare the appraisal of your property in accordance with the appraiser instructions, as described in the addendum of this handbook. Page 8

9 The CIC representative will then contact the appraisers and have them visit your property. Each appraiser will independently develop an appraised price for your Eligible Property using a standard format (Appraisal Institute form AI.100). The appraisals are provided at no cost to you. If the difference between the two appraisals is equal to, or less than 10% of the higher appraised price, then the average of the two appraisals will become the Average Appraised Price offer for purposes of the Program. If the difference is greater than 10%, the CIC representative will arrange for a third appraisal also by an appraiser of your choice. Then, the two higher appraisals will be averaged to establish the Average Appraised Price. Appraisal Process - Examples In the chart below, you can see how sample appraisal calculations are made. In example #1, the higher appraisal is $50,000. This means that the lower appraisal must be within 10% or $5,000. Since the two appraisals are only $2,000 apart, a third appraisal is not required. The two appraisals are averaged to establish the Average Appraised Price of $49,000. In example #2, the higher appraisal is $50,000. This means that the lower appraisal must be within 10% or $5,000. Since the appraisals are $6,000 apart, this means a third appraisal must be done. Now, out of the three appraisals, the two higher appraisals are averaged to establish the Average Appraised Price of $48,000. Appraisal #1 Appraisal #2 Appraisal #3 Average Appraised Price Example #1 $50,000 $48,000 not required $49,000 Average of $50,000 and $48,000 Example #2 $50,000 $44,000 $46,000 $48,000 Average of $50,000 and $46,000 Offer Period Once the Average Appraised Price is determined, you will be presented with a written offer to purchase your property including a premium payment, and the applicable allowances and bonuses. Once you receive an offer, you have sixty (60) calendar days to accept the offer and up to six (6) months to vacate the property and close the sale. The offer contains conditions normal and customary to local real estate transactions, including a requirement that you, the seller, have marketable and insurable title to the property. Only written offers are valid under the Program. You are encouraged to review the offer with your family and friends, and to obtain advice from any others you wish. Premium Payment The Premium Payment is made at the closing of the sale and is intended to enable you to purchase property outside of the Program Area. The premium payment equals 50% of the Average Appraised Price for an owner-occupied property. Page 9

10 Miscellaneous Expense Allowance A Miscellaneous Expense allowance of $5,000 is provided to an owner-occupant at the closing of the sale. The Miscellaneous Expense Allowance is intended to cover moving and personal relocation expenses for those who own and live in their Eligible Property. In cases of multiple ownership, this payment will be made to the owner who occupies the home. Rent Disruption Allowance If you are an Owner Occupant living in a multifamily property you own, a Rent Disruption allowance of $1,000 per Eligible Property occupied by a renter as of February 15, 2012 will be paid to you at the closing of the sale. This payment will not be paid if the Eligible Property is vacant. Professional Advice Allowance A Professional Advice Allowance of $500 per property owner will be paid to you at the time you receive your offer. The Professional Advice Allowance is only available once to each owner, regardless of the number of properties they own. The Professional Advice Allowance is intended to assist in the payment of any costs you accrue for any legal, financial, and/or tax advice and assistance you obtain in reviewing the Purchase and Sale Agreement and any other questions you have regarding the Program. It is recommended that you obtain advice from a tax professional because the payments of allowances and bonuses will be reported to the Internal Revenue Service on Form The Professional Advice Allowance is yours to keep regardless of your decision to participate any further in the Program. Early Appraisal Sign-Up Bonus If you request an appraisal of your Eligible Property on or before April 1, 2012 you will receive an Early Appraisal Sign-Up Bonus of $1,000 at the closing of the sale. Site Clearance Bonus Eligible Property owners may be eligible for a Site Clearance Bonus of up to $15,000 depending on the nature and number of structures that need to be removed. To be eligible for this bonus all structures including cement pads, pier foundations, utility lines (water, gas, sewer, and electric) and all personal property must be removed from the Eligible Property and not buried on the land before closing the sale with Dow. The CIC representative will determine the exact procedures for clearing the site and the amount of eligible site clearance bonus after inspecting your property and/or reviewing the appraisals. Obtaining an Equity Advance The Program will provide assistance to an Owner Occupant in obtaining an Equity Advance of up to 90% of the equity in your property based on all eligible payments, allowances, and bonuses due you when you present a documented need to: Make a down payment on another property Close a sale on a new home Pay moving expenses or other related costs Clear the site of all improvements Page 10

11 Home Finding Assistance If you have a received a Purchase and Sale Agreement to sell your property to Dow and are considering purchasing a new residence outside the Program Area, please contact a CIC representative for information regarding how CIC can assist you in searching for a new home, including references to real estate brokers familiar with the Program and help in looking at homes for sale outside the Program Area. The CIC representative will assist you in obtaining an Equity Advance in such circumstances. This amount will then be deducted from your final payment upon closing. To obtain an Equity Advance, all property owners must have accepted the offer, have demonstrated that they can transfer good and marketable fee simple title to their property, sign a promissory note and mortgage covering the amount of the equity advance, and be willing to sign a release releasing Dow from any and all past or present property claims against Dow. Closing Cost Assistance Allowance If you are an Owner Occupant and are in the process of purchasing a new residence outside the Program Area, and have fully executed a Purchase and Sale Agreement with Dow, please meet with a CIC representative regarding your eligibility for a Closing Cost Assistance Allowance. If you qualify for a Closing Cost Assistance Allowance, Dow will pay up to $1,500 in total, per Owner Occupant, toward the costs listed below: 1. An appraisal for a new home or land 2. Mortgage loan origination fee and/or discount points 3. Home inspection service, survey, or Home Warranty Plan If you qualify, the Closing Cost Assistance Allowance will be paid directly to the closing agent for your new residence on the day of the closing of your new residence, so long as the closing is within 90 days of vacating your Owner Occupant Property. Closing and Vacating The Program pays for normal seller closing costs on the sale of your Eligible Property. Real estate broker commissions, pro-rated real estate taxes, liens, and judgments are not covered under the Program and must be paid by the ownership estate. Closing the sale should be scheduled within six (6) months after you and Dow accept the offer. However, by prior agreement, and on a case-by-case basis, you may extend the closing. The CIC representative will arrange a mutually acceptable closing date once you have accepted the offer. You are required to vacate the property prior to closing, removing all possessions and leaving the Eligible Property broom clean and in a neat and safe condition or completely clear the site leaving it as described in Site Clearance Bonus. Broom clean and a neat and safe condition means you must remove all possessions from all structures on the Eligible Property including furnishings, automobiles, trucks, recreational vehicles, Page 11

12 recreational equipment, tires, paints, household chemicals, automobile and motor maintenance products, fertilizers, and weed and pest control products. You will be required to sign a release releasing Dow from any and all past or present property claims against Dow at the closing of the sale. Calculating Your Total Potential Offer Owner Occupant Sample Offer When the Appraised Price is $50,000 or Greater Average Appraised Price $50,000 50% Premium Payment 25,000 Misc. Expense Allowance 5,000 Professional Advice Allowance 500 Potential Early Sign-Up Bonus 1,000 Potential Site Clearance Bonus up to 15,000 Total Potential Offer $96,500 Owner Occupant Sample Offer When the Appraised Price is less Than $50,000 Average Appraised Price $40,000 Minimum Appraised Price $50,000 50% Premium 20,000 Misc. Expense Allowance 5,000 Professional Advice Allowance 500 Potential Early Sign-Up Bonus 1,000 Potential Site Clearance Bonus up to 15,000 Total Potential Offer $91,500 Page 12

13 Offer for Rental Property Owners The Offer The offer applies to the Eligible Properties in the Program Area that are occupied by renters. Vacant habitable property will be considered Rental Property. The offer consists of the following payments, allowances, and potential bonuses: Payments Average Appraised Price or Minimum Appraised Price of $30,000, whichever is greater Premium Payment equal to 30% of the Average Appraised Price Rent Disruption Allowance of $1,000 per rented unit Professional Advice Allowance of $500 Potential Bonuses Early Sign-up Bonus of $1,000 per property Clear Site Clearance Bonus of up to $15,000 depending on the nature and number of structures on your property Average Appraised Price If you are a Rental Property Owner, the first part of your offer is the Average Appraised Price for your Eligible Property and the improvements on it (such as a home, garage, outbuilding, etc.). A Minimum Appraised Price has been set for a Rental Property at $30,000. The appraisals will be prepared by local independent appraisers whom you select and will be ordered by the CIC representative. The list of approved appraisers includes local, actively practicing appraisers who are licensed by the State of Michigan. The first step is for you to meet or speak with a CIC representative so you can select two appraisers from the approved list. You do not have to choose an appraiser from the approved list. You may nominate any other appraiser that you wish, and the nominated appraiser will be accepted by CIC so long as the nominated appraiser meets ALL of the following requirements: 1. Is a full-time real estate appraiser that is licensed by the State of Michigan; 2. Holds an SRA, SRPA, MAI, CRP, ASA designation or is able to demonstrate significant experience in preparing appraisals in accordance with the Employee Relocation Council guidelines; 3. Is a member of the local Multiple Listing Service and has additional access to recent comparable sales; AND 4. Is willing to prepare the appraisal of your property in accordance with the appraiser instructions, as described in the addendum of this handbook. The CIC representative will then contact the appraisers and have them visit your property. Each appraiser will independently develop an appraised price for your Eligible Property using a standard format (Appraisal Institute form AI.100). The appraisals are provided at no cost to you. Page 13

14 If the difference between the two appraisals is equal to, or less than 10% of the higher appraised price, then the average of the two appraisals will become the Average Appraised Price offer for purposes of the Program. If the difference is greater than 10%, the CIC representative will arrange for a third appraisal also by an appraiser of your choice. Then, the two higher appraisals will be averaged to establish the Average Appraised Price. Appraisal Process - Examples In the chart below, you can see how sample appraisal calculations are made. In example #1, the higher appraisal is $50,000. This means that the lower appraisal must be within 10% or $5,000. Since the two appraisals are only $2,000 apart, a third appraisal is not required. The two appraisals are averaged to establish the Average Appraised Price of $49,000. In example #2, the higher appraisal is $50,000. This means that the lower appraisal must be within 10% or $5,000. Since the appraisals are $6,000 apart, this means a third appraisal must be done. Now, out of the three appraisals, the two higher appraisals are averaged to establish the Average Appraised Price of $48,000. Appraisal #1 Appraisal #2 Appraisal #3 Average Appraised Price Example #1 $50,000 $48,000 not required $49,000 Average of $50,000 and $48,000 Example #2 $50,000 $44,000 $46,000 $48,000 Average of $50,000 and $46,000 Offer Period Once the Average Appraised Price is determined, you will be presented with a written offer to purchase your property. This includes a premium payment, and the applicable allowances and bonuses. When you receive an offer, you have sixty (60) calendar days to accept the offer and up to six (6) months to vacate the property and close the sale. The offer contains conditions normal and customary to local real estate transactions, including a requirement that you, the seller, have marketable and insurable title to the property. Only written offers are valid under the Program. You are encouraged to review the offer with your family and friends, and to obtain advice from any others you wish. Premium Payment The Premium Payment is made at the closing of the sale and is intended to enable you to purchase property outside of the Program Area. The premium payment equals 30% of the Average Appraised Price for an owner-occupied property. Page 14

15 Rent Disruption Allowance If you are a Rental Property Owner, a Rent Disruption allowance of $1,000 per Eligible Property occupied by a renter as of February 15, 2012 will be paid to you at the closing of the sale. This payment will not be paid if the Eligible Property is vacant. Professional Advice Allowance A Professional Advice Allowance of $500 per property owner will be paid to you at the time you receive your offer. The Professional Advice Allowance is only available once to each owner, regardless the number of properties they own. The Professional Advice Allowance is intended to assist in the payment of costs you may accrue for legal, financial, and/or tax advice and for assistance you obtain in reviewing the Purchase and Sale Agreement, and any other questions you have regarding the Program. It is recommended that you obtain advice from a tax professional because the payments of allowances and bonuses will be reported to the Internal Revenue Service on Form The Professional Advice Allowance is yours to keep regardless of your decision to participate any further in the Program. Early Appraisal Sign-Up Bonus If you request an appraisal of your Eligible Property on or before April 1, 2012 you will receive an Early Appraisal Sign-Up Bonus of $1,000 at the closing of the sale. Site Clearance Bonus Eligible Property owners may be eligible for a Site Clearance Bonus of up to $15,000 depending on the nature and number of structures that need to be removed. To be eligible for this bonus all structures including cement pads, pier foundations, utility lines (water, gas, sewer, and electric) and all personal property must be removed from the Eligible Property and not buried on the land before closing the sale with Dow. The CIC representative will determine the exact procedures for clearing the site and the amount of bonus after inspecting your property and/or reviewing the appraisals. Closing and Vacating The Program pays for normal seller closing costs on the sale of your Eligible Property. Real estate broker commissions, prorated real estate taxes, liens, and judgments are not covered under the Program and must be paid by the ownership estate. Closing the sale should be scheduled within six (6) months after you and Dow accept the offer. However, by prior agreement, and on a case-by-case basis, you may extend the closing. The CIC representative will arrange a mutually acceptable closing date after you have accepted the offer. You are required to vacate the property prior to closing, removing all possessions and leaving the Eligible Property broom clean and in a neat and safe condition as well as completely clear as described in Site Clearance Bonus. Broom clean and a neat and safe condition means you must remove all possessions from any structures on the Eligible Property including furnishings, automobiles, trucks, recreational vehicles, recreational equipment, tires, paints, household chemicals, automobile and motor maintenance products, fertilizers, and weed and pest control products. Page 15

16 You will be required to sign a release releasing Dow from any and all past or present property claims against Dow at the closing of the sale. Sample Rental Property Owner Offer When the Appraised Price is $30,000 or Greater (Assuming the property is occupied by a Renter as of February 15, 2012) Average Appraised Price $30,000 30% Premium Payment 9,000 Rent Disruption Allowance 1,000 Professional Advice Allowance 500 Potential Early Sign-Up Bonus 1,000 Potential Site Clearance Bonus up to 15,000 Total Potential Offer $56,500 Sample Rental Property Owner Offer When the Appraised Price is Less Than $30,000 (Assuming the property is occupied by a Renter as of February 15, 2012) Average Appraised Price $24,000 Minimum Appraised Price $30,000 30% Premium Payment 7,200 Rent Disruption Allowance 1,000 Professional Advice Allowance 500 Potential Early Sign-Up Bonus 1,000 Potential Site Clearance Bonus up to 15,000 Total Potential Offer $54,700 Page 16

17 Offer for Owners of Unimproved Property The Offer This offer applies to owners of an unimproved Eligible Property or a group of contiguous unimproved lots. Condemned or uninhabitable property will be treated as Unimproved Property. The appraisal for an owner s unimproved property that is contiguous with the owner s improved property will be included in the appraisal for the improved property. The offer consists of the following payments, allowances, and potential bonuses: Payments Average Appraised Price Premium Payment equal to 30% of the Average Appraised Price Professional Advice Allowance of $500 Potential Bonuses Early Sign-up Bonus of $1,000 Site Clearance Bonus of up to $15,000 depending on the nature and number of structures on your property Average Appraised Price If you own an Eligible Property that is a vacant lot(s) or parcel, the first part of your offer is the Average Appraised Price for the vacant lot(s). The appraisals will be prepared by local independent appraisers whom you select and will be arranged by the CIC representative. The list of approved appraisers includes local, actively practicing appraisers who are licensed by the State of Michigan The first step is for you to meet or speak with a CIC representative so you can select two appraisers from the approved list. You do not have to choose an appraiser from the approved list. You may nominate any other appraiser that you wish, and the nominated appraiser will be accepted by CIC as long as the nominated appraiser meets ALL of the following requirements: 1. Is a full-time real estate appraiser that is licensed by the State of Michigan; 2. Holds an SRA, SRPA, MAI, CRP, ASA designation or is able to demonstrate significant experience in preparing appraisals in accordance with the Employee Relocation Council guidelines; 3. Is a member of the local Multiple Listing Service and has additional access to recent comparable sales; AND 4. Is willing to prepare the appraisal of your property in accordance with the appraiser instructions, as described in the addendum of this handbook. The CIC representative will then contact the appraisers and have them visit your property. Each appraiser will independently develop an appraised price for your Eligible Property using a standard format (Appraisal Institute form AI.100). The appraisals are provided at no cost to you. If the difference between the two appraisals is equal to, or less than 10% of the higher appraised price, then the average of the two appraisals will become the Average Appraised Price offer for Page 17

18 purposes of the Program. If the difference is greater than 10%, the CIC representative will arrange for a third appraisal also by an appraiser of your choice. Then, the two higher appraisals will be averaged to establish the Average Appraised Price. Appraisal Process - Examples In the chart below, you can see how sample appraisal calculations are made. In example #1, the higher appraisal is $7,000. This means that the lower appraisal must be within 10% or $700. Since the two appraisals are only $500 apart, a third appraisal is not required. The two appraisals are averaged to make the Average Appraised Price offer of $6,750. In example #2, the higher appraisal is $7,000. This means that the lower appraisal must be within 10% or $700. However, the appraisals are $1,000 apart. This means a third appraisal must be done. Now, out of the three appraisals, the two higher are averaged to make the Average Appraised Price offer of $6,900. Appraisal #1 Appraisal #2 Appraisal #3 Average Appraised Price Example #1 $7,000 $6,500 not required $6,750 Average of $7,000 and $6,500 Example #2 $7,000 $6,000 $6,800 $6,900 Average of $7,000 and $6,800 Premium Payment The Premium Payment is made at closing and is intended to help you to purchase property elsewhere. The premium payment equals 30% of the Average Appraised Price. Professional Advice Allowance: A Professional Advice Allowance of $500 per property owner will be paid to you at the time you receive your offer. The Professional Advice Allowance is only available once to each owner, regardless the number of properties they may own. The Professional Advice Allowance is intended to assist in the payment of any costs you may accrue for any legal, financial, and/or tax advice and assistance you obtain in reviewing the Purchase and Sale Agreement and any other questions you may have regarding the Program. It is recommended that you obtain advice from a tax professional, as the payments of allowances and bonuses will be reported to the Internal Revenue Service on a Form The Professional Advice Allowance is yours to keep regardless of your decision to participate any further in the Program. Early Sign-Up Bonus If you request an appraisal on your Program Area property on or before April 1, 2012 you will receive an Early Appraisal Sign-Up Bonus of $1,000 per lot or parcel at the closing of the sale. Page 18

19 Site Clearance Bonus Property owners may be eligible for a Site Clearance Bonus of up to $15,000 depending on the nature and number of structures that need to be removed. To be eligible for this bonus all structures including cement pads, pier foundations, septic tanks, utility lines (water, gas, sewer, and electric) and other personal property must be removed from the Eligible Property land and not buried on the land before closing the sale with the Dow. The CIC representative will determine the procedures for clearing the site and the exact amount of eligible site clearance bonus after inspecting your property and/or reviewing the appraisals. Closing and Vacating The Program pays for normal seller closing costs on the sale of your Eligible Property. Real estate broker commissions, prorated real estate taxes, liens, and judgments are not covered under the Program and must be paid by the ownership estate. Closing the sale should be scheduled within six (6) months after you accept the offer. However, by prior agreement, and on a case-by-case basis, you may extend the closing. The CIC representative will arrange a mutually acceptable closing date once you have accepted the offer. You are required to vacate the property prior to closing, removing all possessions and leaving the property broom clean and in a neat and safe condition or completely clear the site leaving it as described in Site Clearance Bonus. Broom clean and a neat and safe condition means you must remove all possessions from any structures on the land including furnishings, automobiles, trucks, recreational vehicles, recreational equipment, tires, paints, household chemicals, automobile and motor maintenance products, fertilizers, and weed and pest control products. You will be required to sign a release releasing Dow from any and all past or present property claims against Dow at the closing of the sale. Unimproved Property Owner Sample Offer When Appraised Price is $7,000 Average Appraised Price $7,000 30% Premium Payment 2,100 Professional Advice Allowance 500 Potential Early Sign-Up Bonus 1,000 Potential Site Clearance Bonus up to 15,000 Total Potential Offer $25,600 Page 19

20 Owner Occupant Sample Offer When the Appraised Price is Less Than $7,000 Average Appraised Price $6,900 Minimum Appraised Price $7,000 30% Premium 2,070 Professional Advice Allowance 500 Potential Early Sign-Up Bonus 1,000 Potential Site Clearance Bonus up to 15,000 Total Potential Offer $25,570 Page 20

21 Offer for Renters Page 21 Miscellaneous Expense Allowance The Program identifies the Renter of Record as the name or names that appear on a lease, cancelled rent payment check, utility bill, or similar documentation as of February 15, If you are the Renter of Record for an improved Eligible Property as of February 15, 2012, and your landlord has accepted an offer from the Sponsor, then you will be eligible to receive a Miscellaneous Expense Allowance of $4,000 if you relocate to any new residence except an Eligible Property as described on page 4. The Miscellaneous Expense Allowance will be paid to the Renter of Record only after the landlord s acceptance of an offer from the Sponsor and has demonstrated that they can transfer good and marketable fee simple title to their Eligible Property. Professional Advice Allowance: A Professional Advice Allowance of $500 per Renter of Record will be paid to you at the time you receive your offer. The Professional Advice Allowance is intended to assist in the payment of any costs you may accrue for any legal, financial, and/or tax advice and assistance you obtain. It is recommended that you obtain advice from a tax professional, as the payments of allowances and bonuses will be reported to the Internal Revenue Service on a Form The Professional Advice Allowance is yours to keep regardless of your decision to participate any further in the Program. Home Finding Assistance If you are considering purchasing a new residence outside the Program Area, please contact a CIC representative for information regarding how CIC can assist you in searching for a new home, including references to real estate brokers familiar with the Program and help in looking at homes for sale outside the Program Area. If you are considering renting a new residence outside the Program Area, please contact a CIC representative for information regarding how CIC can assist you. Closing Cost Assistance Allowance: If you are a Renter of Record in the process of purchasing a new residence outside the Program Area, and your landlord has accepted an offer from Dow, and has demonstrated that they can transfer good and marketable fee simple title to their Eligible Property, please meet with a CIC representative regarding your eligibility for a closing cost assistance allowance ( Closing Cost Assistance Allowance ). If you qualify for a Closing Cost Assistance Allowance, Dow will pay up to $1,500 in total, per Renter of Record, toward the costs listed on the next page. 1. An appraisal for a new home or land 2. Mortgage loan origination fee and/or discount points 3. Home inspection service, survey, or Home Warranty Plan

22 If you qualify, the Closing Cost Assistance Allowance will be paid directly to the closing agent for your new residence on the day of the closing of your new residence, so long as the closing is within 90 days of vacating your Owner Occupant Property. Note: You must release Dow from any and all past or present property or occupancy claims against the Dow to be eligible for Program benefits. Page 22

23 Questions and Answers Why is Dow offering this program? Property use on the borders of Michigan Operations has changed over the last 50 years. This part of Midland is zoned commercial, although there are some homes that remain. To address this land use and give people the option to move to a residential area, if they so choose, Dow is offering this property purchase program. Does Dow have any plans to build operating facilities on the property it purchases? Dow does not have any plans to use the acquired Eligible Properties for operations and in fact Dow plans to donate the property to Midland Tomorrow, Midland County s nonprofit economic development organization. How long will the program last? Owners of Eligible Properties will have from March 1, 2012 to June 30, 2012 to begin participation in the program by requesting an appraisal for their Eligible Property. Once this request is received, and appraisals completed, they will receive a written offer, which includes a premium, an allowance, and potential bonuses. The sign-up period for participation in the program will end June 30. What if residents decide not to accept Dow s purchase offer? There is no requirement to participate in the program. How can residents start talking to Dow about this? Community Interaction Consulting, Inc. (CIC), a real estate and communications services company, will administer the Program on behalf of Dow. Should you desire, a CIC representative is available to meet with you privately to go over all the features of the Program and assist you in understanding Program options available to you. We invite you to meet with a CIC representative at the Midland Resolution Center, 1008 Jefferson Ave., Midland, Michigan to discuss how the Program features may benefit you. Page 23

24 Recommended Appraisers and Real Estate Agents Real Estate Appraisers * Sherman Little, SRPA, SRA 2733 E. Midland Road Bay City MI (989) Roland Adams, SRA 7305 Midland Rd., Ste. 1 Freeland MI (517) Randall Davis SRPA, SRA 5580 State Suite 8 Saginaw MI (989) Richard Peterson, SRA Peterson & Watson Appraisal Services 7600 Commerce Ct., #A Midland MI (989) Realtors * Ayre/Rhinehart Realtors 4809 Jefferson Avenue Midland, Michigan (989) Linda Owen Century 21 Central 6105 Jefferson Ave. Midland, MI (989) Bill Kuehne RE/MAX of Midland 5915 Eastman Avenue Ste. 200 Midland, Michigan (989) Wayne Crosby Coldwell Banker Alliance Group 3600 N. Saginaw Midland MI, Dick Miller Real Estate Agents When contacting a Real Estate Agent for home finding assistance, please ask to speak with the contact person listed above. Advise the contact person of your Program eligibility so she or he can recommend the best agent to meet your needs. This broker has invested time in training certain agents in how the Property Purchase Program works and has made a commitment to provide Program participants with the best service available. Always make the CIC representative aware of any service concerns you have regarding a recommended Real Estate Agent. Page 24 * Note: Other real estate appraisers may be used provided they are approved by CIC. This list is subject to change. Ask the CIC representative for the most current list.

25 Appraiser Instructions, Definitions and Work Scope Situation Dow is sponsoring a Property Purchase Program focused on purchasing Eligible Properties in Midland, MI. The improvements will be removed and prepared for light industrial or commercial purposes. It is in Dow s best interest to fairly compensate property owners. Community Interaction Consulting, Inc. (CIC) will administer the Program on behalf of Dow. Guidelines 1. Appraisers will prepare their appraisal report according to the Uniform Standards of Professional Practice (USPAP) and any regulatory agencies of the State of Michigan using the Appraisal Institute form A1.100 with emphasis on the comparison approach. 2. Do not adjust comparable sales for FHA or VA financing. 3. Provide an as is appraised price based on typical marketing time without regard to any environmental sampling or restoration activities on or near the property. 4. Accept and consider any information given to you from the property owner regarding their property and, to the extent relevant, reflect this information in your report. This information may come in the form of a prior appraisal or broker price opinion. 5. Any adjustment deemed to be subjective shall be made to benefit the subject property by making the highest defendable positive adjustment. 6. Include non-permitted livable square footage in your total square footage estimate. 7. Do not consider conditional aspects of the subject property like cracked foundation slabs and deferred maintenance. Focus on the objective characteristics like finished living area, room count, number of bathrooms and garages, floor plan, age and lot size. Accordingly, rate the condition of the subject property and comparable sales as either fair, average or good. 8. When calculating total living area, round up all exterior dimensions to the nearest half foot. 9. Include in your report: Color photos of the subject property and the front of all comparable sales A sketch, not necessarily to scale, of dimensions used to determine living square footage A map indicating the location of the subject property and the comparable sales Interior photographs 10. your report and invoice to: bo.gauthier@plantationcable.net. Contact CIC at with questions. Definition of Appraised Price for the Dow Property Purchase Program The most probable sale price which a specified interest in real property is likely to bring under all of the following conditions: Consummation of a sale occurs as of a specified date An open and competitive market exists for the property interest appraised The buyer and seller are each acting prudently and knowledgeably The price is not affected by undue stimulus The buyer and seller are typically motivated Both parties are acting in what they consider their best interest Page 25

26 Marketing efforts were adequate and a reasonable time was allowed for exposure in the open market Payment was made in cash in U.S. dollars The probable sales price represents the normal considerations for the property sold unaffected by special or creative financing Assume the subject property is free and clear of all liens, special assessments and unpaid property taxes Scope of Work for Appraisals for the Dow Property Purchase Program Client Intended Use Intended User Community Interaction Consulting, Inc. (CIC) on behalf of The Dow Chemical Company Assist The Dow Chemical Company in developing an offer to purchase property within the designated Program Area Community Interaction Consulting, Inc. (CIC) on behalf of The Dow Chemical Company The scope of work for the appraisal reported herein meets the requirements set forth in the Uniform Standards of Professional Appraisal Practice of the Appraisal Foundation. The Scope of Work Rule states: For each appraisal, appraisal review, and appraisal consulting assignment, an appraiser must: 1. Identify the problem to be solved; 2. Determine and perform the scope of work necessary to develop credible assignment results; and 3. Disclose the scope of work in the report. An appraiser must properly identify the problem to be solved in order to determine the appropriate scope of work. The Appraiser must be prepared to demonstrate that the scope of work is sufficient to produce credible assignment results. An appraiser must gather and analyze information about those assignment elements that are necessary to properly identify the appraisal, appraisal review or appraisal/consulting problem to be solved. The scope of work must include the research and analyses that are necessary to develop credible assignment results. An appraiser must not allow assignment conditions to limit the scope of work to such a degree that the assignment results are not credible in the context of the intended use. An appraiser must not allow the intended use of an assignment or a client s objectives to cause the assignment results to be biased. Page 26

27 The report must contain sufficient information to allow intended users to understand the scope of work performed. 1 Within this report we have addressed the client and intended users, definition of Appraised Price, the effective date of the appraisal report, the appraiser s opinions and conclusions, the subject of the assignment and relevant characteristics and assignment conditions. Additionally, we will convey physical data extracted through the property inspection and owner/occupant interview, market data sources/research and clearly disclose any hypothetical conditions and or extraordinary assumptions in the Assignment Parameters section of this report utilized within this assignment. More specifically, the scope of the work required to complete this appraisal and to prepare this report for The Dow Chemical Company Property Purchase Program included the following: Physical inspection of the subject property and the surrounding market area, curbside viewing of comparable properties from comparable markets Investigation and review of public records relative to the present and legal use of subject property, which may include information from the Assessor, Building and Planning department or Client Analysis and the decision making process relative to our opinion of the highest and best use of the subject property Market investigation relative to sales and offerings (sales and offerings within the Program Area are not utilized in this analysis in accordance with the client s instructions) Analysis of market data relative to the highest and best use of the subject property as improved, unimproved, or uninhabitable Analyze and explain our position relative to the required exclusion of any normal approaches to the Appraised Price in this appraisal Estimate of the Appraised Price by means of the appropriate approaches Analysis necessary to arrive at the Appraised Price as of the effective date of this report and finally writing the report All third parties should be advised that this appraisal follows appraisal guidelines established by the Client for developing an offer to purchase property for The Dow Chemical Company Property Purchase Program. Therefore, it cannot be used for any other purpose other than its intended use. It especially cannot be used to establish collateral for a loan. 1 Appraisal Standards Board, The Appraisal Foundation; Uniform Standards of Professional Appraisal Practice, Edition; Page U-13 thru U-15 Page 27