Relocation Policies and Tiers for Employees Transferring with Homes to Sell
Relocation policies and tiers feature different options that may incentivize employees to sell their homes more quickly to guarantee that they will not be stuck paying an old home mortgage long after they've moved to their new area. By handling your homesale program through a Relocation Management Company (RMC), your organization will benefit in the following ways:
- Trusted Advisor - You will have an experienced relocation advisor to help design and execute a homesale program that fits your organizational goals.
- Tax Benefits - By handling your homesale program through an RMC, you can provide homesale benefits in such a way that doesn't adversely impact the transferring staff member's taxes.
- Access to Best in Class Realtors - All excellent RMCs have a dedicated list of brokers from brand names such as ReMax, Century 21, Coldwell Banker, and others to take advantage of local Real Estate expertise from their finest agents.
- Full Coordination from Start to Finish - The best RMC's offer a virtual 1-to-1 coordination model. Each Executive (and or spouse/partner) will benefit from having one expert who manages all elements of the Executive's move, consisting of but not limited to moving support, temporary living while they search for a new home, expense reimbursement, and more.
- Benchmarking and Reporting - Understanding what competitive relocation benefits for other companies in your industry are is vital. Your RMC, because they have experience with many clients, has access to data to provide insights and tips. Plus, once your program has started being handled by a relocation partner, you can utilize the activity reporting they provide to see your results to compare against other similar organizational trends in your market.
Utilizing the Guaranteed Buyout Program to Sell a Home
Some real estate tiers might consist of executive level home sale assistance and a Guaranteed Buyout (GBO) program. The GBO relocation policy tier of home sale assistance is typically reserved for high-level executives. It includes providing a buyout offer after a home has been on the market for a particular length of time. The GBO assures your high-level executives that they can confidently purchase a new home without the consistent concern of whether their old home will ever sell.
Your company needs to be prepared to be responsible for the costs associated with carrying the home in inventory till resold when companies provide a buyout option. Covering the home's carrying costs isn't an ideal situation, but it could be well worth it if it helps increase a strategic staff member's productivity. The organization's concern is, what is it worth to the organization to get an executive settled and moved in quickly in the new area? If the value of moving the employee quickly when needing to sell a home is high, the GBO is the best way to roll out the red carpet for that Executive and their family.
Utilizing the Buyer Value Option Program to Sell a Home
Your organization might also consider offering a Buyer Value Option (BVO) program for households that need to sell a home to move to a new location for the company. The BVO offers comparable benefits to a GBO but less financial risk to the company because, with the BVO, the home does not sell until there is a willing and able buyer.
What are the benefits of a BVO with a Sunset Clause?
The benefit of the sunset clause is that it decreases your company's threat of being audited by the IRS. Companies with sunset clauses may offer a buyout after a specifically defined marketing time, such as after 180 days if the home is still unsold.
How can a relocation company's home marketing assistance program help avoid the sunset clause as well as other costs?
In conjunction with the staff member following the specifics of your company's relocation policy, professional home marketing assistance can reduce the sunset clause's use. For instance, it should be required that to receive homesale benefits that the employee list their home within a specific percent of the advised amount by the company-provided agents. Even if the sunset clause takes effect, the cost savings of eliminating an open-ended BVO can be substantial to the organization. A home marketed for an indefinite duration leads to a delayed relocation, lost productivity, and possible increased duplicate housing, as well as increased temporary living and storage costs.
Relocation Home Sale Bonus Incentive
Another homeowner benefit to consider is the home sale bonus incentive, which can likewise be added to relocation plans at any level. This benefit is a beneficial benefit to use in down real estate markets. When the employee sells their homes within a particular period of time, the homesale bonus includes providing an additional bonus for employees. These bonuses-- also known as quick sale bonuses-- encourage employees to sell their homes quicker, reducing stress on the employee and costs for the company.
Quick sale bonuses benefit employees because they deliver more generous incentives to sell their homes faster and transfer without having their attention, focus and efforts pulled away by their old pieces of property. They're likewise most likely to generate more offers on homes, which can help sell the home sooner.
There are benefits for companies who motivate moving employees to sell their homes quickly, too. The earlier your employee sells, the shorter the general relocation process will be, which can save your company considerable costs on the relocation package. You'll also benefit from having your employees return to full productivity as soon as possible.
Are There Any No Cost Relocation Real Estate Benefits for Non-Homeowners?
Yes! Not all transferring staff members will be homeowners and might choose to lease in the new place too. However, offering any relocating staff member access to their RMC's preferred relocation broker network if they choose to buy a home by themselves is a fantastic way to increase your program benefits at no charge to the company. Some RMCs even offer employees a cashback reward as a way to say "thank you" for thinking of them when they performed their home search. Offering this to all employees can be specifically valuable to first-time homebuyers because the agents in the network are proven and can inform the staff member on the ins and outs of buying their first home.
How to Relocate an Executive Who Needs to Sell or Buy a Home
Executives can be reluctant to move because of real estate issues. To resolve these concerns and attract top-quality executives, employers need to offer real estate services that seamlessly help executives transition from one home to another. Replacing an executive's current home in an unfamiliar area is one part of the real estate formula.
The relocation real estate equation has two primary parts: First, selling the employee's existing home rapidly and without monetary hardship to the Executive. The second is buying a comparable home in the new place.
Real Estate Market Trends are often not an utmost concern of executives. In particular, the lack of time it takes to sell one high-end home and purchase another, in particular, tends to dominate their mindset.
How can Companies Help Sell an Executive's Home?
Transferees fret about selling their home rapidly or leaving this challenging task to their spouse/partner and family.
Some of the benefits companies provide consist of:
- Providing referrals to a trusted real estate broker with a proven performance history of facilitating high-end home purchases
- Providing monetary compensation for a "loss on sale"
- Providing buyer incentives to encourage interested parties to act
- Structure in a bonus for a quick sale
How to Help an Executive Buy a New Home in a New City?
Executives faced with buying a new home in an unfamiliar location often feel hurried to choose before they have all the best details. The needs of work and home life leave little time to browse for a new home.
- Offering referrals to relocation savvy real estate brokers with experience in high-end properties often helps bridge this gap.
- Assistance in finding the best home loan providers and programs.
These real estate services conserve time while reducing prospective mistakes in home-buying choices triggered by an unfamiliarity with the new location. Having real estate professionals at the Executive's disposal makes him or her a lot more comfy in house hunting and purchase decisions.
Expert relocation firms usually have chosen real estate brokers and mortgage lenders who have proven experience in assisting executives in moving successfully over time. They help decrease transferee tension and uncertainty and allow the moved Executive to arrive at the new office energized, comfortable, and prepared to contribute to company operations.
The Executive's spouse/partner and family also appreciate this assistance. After finding the best home and neighborhood, family concerns decrease quickly.
Competitive executive relocation programs should consist of homesale and buying assistance.
These real estate services, carried out by trusted specialists, substantially impact the Executive's satisfaction with the relocation. New hires are often especially pleased with their company's relocation program managed by their RMC, thus reducing "buyer's remorse" that might sneak into the Executive's consciousness. These services further cement the new Executive's decision to come on board with the company.
Like other specialized services consisted of in executive relocation policies, the short-term cost of offering this assistance is recouped over the long-term. Completely satisfied executives are high-performing executives and tend to stay invested in the organization's mission and goals.
Do you need help transferring staff members who have homes to sell?
Paragon Relocation has managed the homesale programs for many well-known companies for over 30+ years by assisting with life decisions one person at a time. We would love to explore doing the same for you. Contact us today to learn more!
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