As we all know, staying at home has changed much of what we
do and how we act as consumers on a daily basis. Most of the world is holding their breath to
see what the long-term affects will be.One
market that we know is extremely hot right now is the US housing market.But there is a shortage in many areas of new
or existing homes on the market.Yesterday’s
market movement was influenced by housing starts (+4.5%) and building permits
(+5.8%) reported in December.In my own
neighborhood, if a house goes on the market, it sells within three weeks.To buy a home most of us need a mortgage.
If you have not done
so, now is the time to refinance a higher rate mortgage.Many homeowners are taking cash out for
repairs or upgrades to their existing homes, taking advantage of the lower
rates.There is quite a debate as to
whether sitting on equity is the wisest choice or to take advantage of paying a
mortgage with very little interest is the way to go.The mortgage industry is one in which there
are rise-and-fall cycles.However,
current rates are expected to continue throughout 2021 with slight increases
throughout the year.Freddie Mac saw the
30-year and 15-year rates both move -2 basis points to 2.77 % and 2.21%,
respectively.According to Black Knight
(an industry leader in mortgage technology, data, and analytics), there are
still 16.7 million refinance candidates who meet broad-based eligibility
criteria and could also cut their first mortgage rate by 0.75 % or more.Have you been putting off refinancing your
own home?Now is the time.
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!
The COVID-19 pandemic significantly impacted the U.S. residential real estate market in 2020 but not in the way everyone
expected.
In April and May, while buyers and
sellers were unsure of what was going to happen due to the Covid-19 virus, the
real estate market slowed. Both buyers and sellers were worried about being
exposed to the virus and lenders were hesitant to lend as employer layoffs
soared.
But by July the real estate market had improved
dramatically across most states.
What helped create this change? To name a few...
- * Increased buyer interest - Extended COVID-19 restrictions such as “shelter in place orders” put
in place by government entities, employers work from home policies and school closures
forced families to share limited space at home. Since there was no longer a need to be close to the office and / or their current living space was not conducive to working from home or for their children to learn online it was a perfect opportunity to make a move to a more desirable area or to a larger home.
-* Government Stimulus Package - The Federal Reserve stepped in with a broad
array of actions to limit the economic damage from the pandemic, including up
to $2.3 trillion in lending to support households, employers, financial
markets, and state and local governments.
* Mortgage interest rates at an all time low - By July, the 30-year fixed rate mortgage fell below 3% for the first time! Record-low mortgage rates caught the attention of potential home buyers. Households that hadn’t lost income during the pandemic were saving money on commuting, entertainment and vacations found themselves with more money to invest in real estate.
* Real estate industry increased use of Technology - Virtual showings became the norm. At a time when in-person showings were inadvisable or prohibited, alternative marketing opportunities such as livestreaming or online virtual tours were made easily available for buyers to view the home. In addition, lenders, appraisers, inspectors, escrow and title companies had to change to meet pandemic imposed restrictions.
In this series we will continue to explore what the experts are saying about the U.S. residential real estate market
in 2021 and how this may influence changes to your relocation policies surrounding real estate.
2021 has begun and after a torturous 2020
we all hoped the impact of Covid would be diminishing by now, instead it’s on
the rise again globally. Into the mix for UK and Europe comes Brexit that adds
another wave of turbulence to an already difficult service delivery arena.
The impact to international relocations as
a result of these two elements alone is significant. As a minimum, costs have
and will continue to increase for the shipment of household goods. All flights
are limited not only for passengers but also for cargo therefore clients who
authorise airfreights within their global mobility polices are witnessing substantial
cost increases. Ports are gridlocked with empty containers grounded in the
wrong port therefore resulting in container shortages and long delays to
container deliveries. Standard shipping lanes have diminished adding to the
major delays in sailing schedules. Historic timescales for the delivery of an
assignee’s shipment have been turned upside down. In addition, immigration
rules and documentation requirements are constantly changing with visas rules
being amended at very short notice. Setting clear and transparent expectations
with assignees is increasingly difficult simply because we are working with the
unknown and unprecedented.
Household goods and visa & immigration are
just 2 relocation services negatively impacted by Brexit and Covid. Over the
next few weeks, I will expand on these 2 specific areas and add to them to cover
other areas of international relocation negatively impacted such as the effect
on European borders, changes to customs and immigration documentation and what
I believe are potential work arounds in these testing times.
January 19, 2021
Relocation For A Retention Strategy?
You are probably thinking oh that’s old news…but wait, second thought…is it? Certainly this is not a new concept by any
stretch, however, one word….COVID!! This could be simply described as the
biggest game changer….good or bad!! It certainly has brought to light the
endless possibilities of employees working from home as well as the potential of a
greater talent pool to attract the right employees, etc.
The other side of the coin is those current employees that are
part of your very important talent pool you want and need to retain. A
lot of employees are likely having the “ah ha” moments too. “I want
to retire in…Montana, or on a sunny beach, or ski slopes in Vail Colorado…now I
can work from anywhere”. As employers and employees seek the expanded
employment opportunities, employers will likely require engaging frequently in offering
a reduced package of relocation benefits to retain that employee and allow them
to work from a location that is more desirable for any number of reasons…closer
to family, health benefits, weather, retirement in the near future,
affordability, cost of living…just to name a few!
