|Lynda J. King, ABR, CRS|
|RE/MAX® at the Crossing
8250 Haverstick Rd., Suite 140
Indianapolis, Indiana 46240
Toll Free: (866) 595-3100 ext.301
Direct: (317) 255-6217
Fax: (317) 536-9262
Imagine one day you go to work and learn you need to report to a new job another state in two weeks. When you work for a corporation, you may be subject to transfers every few years. A corporation's goal is to make the move as quick and as smooth as possible. That's so you can return to work as soon as possible.
To this end, corporations typically have a relocation program. These programs usually include assistance with the sale of an employee's current home, the purchase of a new one and with the move itself. The degree to which help is given depends on where the employee is in the company's hierarchy. It can also vary among companies.
Companies often will pay for a house-hunting trip to a new location and provide information on that town. Such information can include details on housing, schools and employment opportunities for spouses as well as the area's demographics and details on its recreation and weather. A company will often recommend what home inspections are necessary in the area and it will also suggest an appraisal - even if one is not necessary for a loan. The company often will also help you locate a lender. Other benefits on the purchase side can include paying some of the closing costs to obtain a new loan, appraisal and inspection fees. In such cases, the employer really wants the employee to be well-informed about the community and comfortable with the purchase so that the person and his or her family acclimate quickly and the employee can get back to work.
The company also is aware that if it moves this employee again in the future, the employee's benefit package may include a buyout of the home he or she is purchasing. It is in a company's best interest to be sure a home is being purchased for fair market value and that there are no issues that will require repairs before the home can be resold.
Often an employee will have a home to sell. The benefits package can include advice on selling a home, paying a bonus to sell the home within a reasonable time frame, paying some of the expense of selling or complete, guaranteed buyout. Benefits of the guaranteed buyout are that the employee knows how much money he will receive from the home sale and he will be relieved from continued payments and maintenance on that home once the buyout is accepted. Certainly if a home is unusual or if the real estate market is slow, this can be a blessing to the employee.
If an employee moves before his or her family, a corporation typically will pick up temporary housing and pay for some return trips home. A corporation is aware that a home typically sells best when it is occupied, and often it will offer a bonus to the employee if the home is sold within a certain time frame. This bonus usually diminishes after 30 or 60 days. Clearly, companies that do this want to reward an employee who prices her home correctly and gets it under contract quickly.
Most buyers will negotiate harder and will expect a better price from a company than they expect to get from the seller directly. A corporate buyout also potentially adds thousands of dollars to the cost of the transfer for the corporation. For these reasons, a corporation knows it is well ahead for the employee to find a buyer for the home, hence, the bonus.
A corporation or buyout company may have agreements with local real estate firms and specific agents to list the homes they buy out. A corporation may recommend that its employee use the same firms and agents, but the employee is free to use whomever he likes until the buyout actually takes effect. The company will want the agent to sign an agreement approving release of the listing upon the buyout. Also, the buyout company will provide to the REALTOR® specific forms that it wants the buyer to sign at the time of contract.
During this bonus period while the seller is trying to get his home sold, the buyout company will begin establishing a buyout price. Usually this is determined by obtaining three appraisals. Since the buyout price is determined by the appraisals, it is important to find appraisers familiar with and knowledgeable about your neighborhood. Usually you will be given a list of appraisers from whom to choose. Also, ask your REALTOR® for input.
When an acceptable offer is received, the seller then is instructed not to sign it. At this point, the corporation or buyout company will have one of its people take over, and that person will sign all contracts. This is called an assigned sale. Not only does this allow an employee to move forward with the move - leaving the details of the sale to the relocation professionals - but there are specific tax reasons for this.
Many companies will have an on-site person in human resources act as a resource to help solve some of the issues that the move, sale or purchase of a home may present. That person is there to help guide you - take advantage of that. Such individuals realize that solving some of the most mundane problems allows you to focus your energy on larger tasks.