Companies often offer to purchase the homes of employees when they ask them to relocate to another city. Such a benefit enables employees to move to a new city without the burden of the upkeep, maintenance, and sale of their existing home. In addition, companies generally purchase the homes of transferred employees at fair-market value, freeing up their credit for new opportunities.
Relocation home transactions encompass a number of different types of sales designed to assist the employee in realizing the best possible price for the residence. In addition, some employers utilize the services of a third-party company that purchases homes for resale or investment purposes. Depending on the conditions of the relocation package, employees turn the sale of their homes completely over to their employer or market the home for a period of time with a guaranteed buyout at the end of that term.
Many companies offer a buyout program that requires employees to get several appraisals. If the amount of the appraisals falls within a narrow range, the employer pays the average price. However, the employee is allowed to market the home for 90 days (or less) to test the market if the appraisals are dramatically different from each other or if the employee wants to try to increase the price of the property.
Another approach used by some companies obliges employees to list their residence immediately. By using this method, employers save on the costs of appraisals and let the market control the price. To incentivize the employee to actively market the property, 30 to 40% of companies offer a bonus equivalent to a percentage of the sale price of the home.
Generally, employees also receive realtor fees and closing costs expended on the sale of their existing home and the purchase of their new home, temporary living expenses in the new city, and travel expenses including a trip to search for a new house.
Parsifal Corporation provides expert advice to companies designing relocation packages, including contract review and analysis. With more than 30 years of experience in the relocation industry, Parsifal Corporation assists its clients in safeguarding the interests of its employees while also protecting the investments of the clients.