If you sell your home to a relocation company, do you typically get less than what you would on the market?

Asked by Patrick, Shelton, CT Wed Oct 10, 2007

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Melissa Peet, , New Milford, CT
Tue Oct 30, 2007
Hi Patrick, As a former relocation consultant, now a licensed agent in CT, I have heard this question many times and it is a valid concern when relocating. All companies offer different relocation packages and it is best to consult your relocation policy and truly understand the company offer portion of your benefits. The one main difference is that a company offer for your home is based a "relocation appraisal" where the guidelines are very different than those of a "bank appraisal" . The best way to ensure you get the best possible offer for your home is ask your trusted real estate agent to provide the best comps for your home. If you are using an appraiser who is not familair with the market in your area, you could be short changed.

The price or your home will be determined by the guidelines set forth in your relocation policy (ie the average of 2 or 3 etc) The place that really can impact you most is not only the company offer price, but also in the inspection requirement portion. *You will most likely be required to have inspections done on your home and also be required to repair even the most minor issues on the report before your company will allow you to accept the company offer.*

You can not dispute the offer amount once it is determined and it is really ideal to follow the advise and marketing suggestions from your agent and ensure they are keeping your home competitively priced for the market. *Sometimes your policy may also provide a home selling bonus to you if you sell your home to a buyer instead of taking the company offer. In this case, let your agent know the amount of the company offer and negotiate any offers you get in order to ensure you can take advantage of this option. *

But to answer your question, typically a company offer is about 5% below the average market value of your home as the appraiser will be basing his opinion on the price to sell within 60-90 days, so if the average days on market for your area is longer, they need to adjust it lower in order to ensure it sells quickly so that your company does not continue to incurr maintenance costs for an extended period of time.

My advise is read your policy carefully prior to having it reviewed by your relocation consultant so you can ask questions. The goal of your policy is to help you, not to take advantage of you and short change you so they can profit from the sale of your home. A company offer is a great benefit, especially in a market where homes are not selling. It's better to sell it quickly for less than to be stuck making payments on a home you no longer need. Good luck in your new position and with the sale of your home!
Web Reference:  http://melissapeet.com
3 votes
is the 60 to 90 days marketing period mandatory for legal reasons - or is it up to the company if it wants to waive the waiting period?
Flag Tue Jun 27, 2017
Lisa Brodsky, , 10950
Wed Oct 10, 2007
Hi Patrick,

The buyout is usually the average of 2, possibly 3 appraisals...or in some cases the company offering you the buyout may hire an outiside company to get a "BROKERS OPINION" as to value. These companies will hire a Broker to give them their opinion, based on comparables, much like a comparative market analysis is done for a seller or even a buyer. I have actually been hired to many of these for private agencies. The relocation company certainly isnt going to give you better than what the market really is, but depending on your personal circumstances, career, relocation...in the grand scheme,it IS sometime best just to "cut the ties" and get on with your next step...it is all very personal. In some cases, you may be given a short time to sell on your own and then your company will "encourage" you to take the buyout..so you can settle where your new home is to be, and be an asset to them in your new position, and not distracted by your housing situation. I am a certifed relocation specialist and have been for years...I have seen people make a variety of choices...all basedon their own circumstances. If you have the time and patience..try listing with a realtor before you take the buyout...you will probably net more $....but no guarantee. If you need a CMA to help you decide,,,log onto http://www.coldwellbanker.com/for/lisa.brodsky and request a free CMA....
3 votes
Kaye Thomas, Agent, Manhattan Beach, CA
Thu Oct 11, 2007
While it is true that relo companies may pay you a bit less there are other compensations that may make up the difference. If you go with the package they will "give you" $XX money to cover buying fees when you relocate.. this can add up to a significant amount of money.. Also if you list with an agent and it sells before they purchase the home they will often pick up the commission fees and some closing costs.
Before making a decision you need to look at the entire package and determine what is being offered.
Web Reference:  http://kayethomas4homes.com
2 votes
Annidonia, Home Buyer, Shelton, CT
Mon May 11, 2015
Used a relocation compnay when I accepted a new job. My package required that two real estate agents (selected by the relo company) do a market analysis on the home and present what they recommended the house be listed for. I had to take the average of the two amounts and could not list for more than 5% of that average. I was responsible for negotiating the terms of the offer with a buyer, but once the offer was verbally accepted the relo company purchased the house directly from me for that price and they handled all paperwork. If the buyer backed out of the sale or couldn't secure a loan, I would not be at risk. The relocation company would own my home.

They did require an inspection and we were required to fix everything on that list. I took issue with that. Every inspector is different and will catch different things. Their inspector missed some major repairs and then called out ridiculous nitpicky stuff (that was also expensive to fix). You won't know what you are in for until later in the process when the inspection happens.

The relocation package we had covered the realtor fees (6%) and seller closing costs. On the one hand this saved us money, but on the other hand we lost the investment in all of the upgrades in the house because the market wasn't strong enough for the home to increase in value.
1 vote
Carrie Crowe…, Agent, Southaven, MS
Thu Oct 11, 2007
Relocation companies often have a "buy out" option. In todays market I would take it and run! We are in a declining market. There is a risk for anyone selling a home. If they buy it from you at one price, they may have to sell at a lower price. There is a pretty good chance they lose money rather than make money on the transaction.
Web Reference:  http://carriecrowell.com
1 vote
Jeff Woda, Agent, Ridgefield, CT
Wed Oct 26, 2016
All else equal the buy out is going to be below the market value to leave the relo company room to work. However, in a declining market depending on your house setting it may well be a great strategy that allows you to get out and not have the headache of trying to find a buyer.
So the answer is it depends. The best way to answer that is to have a professional come in and take a look at both your house and your package as devil is always in the details.
0 votes
cdaly1123, Home Seller, Carolina Beach, NC
Mon Jan 5, 2015
My experience was YES! They got three (3) appraisals, average the three but they told the appraisers that it should be a price that would create a sale within 30 days. Then they get the home inspected by a home inspector that writes up crazy stuff- such as putting more vents around the house of the crawl space! After getting a very low appraisal, I was then hit with $15-20K in work to be done. I asked them why as the Building Code did not require more that the home already had and I was told that it their policy. Be careful if basing your decision on accepting a position to help you financially the home buying issue can actually put you into bankruptcy!
0 votes
Carol, Home Owner, New Jersey
Mon Nov 11, 2013
Definitely ... and they deduct 1 1/2 times the amount of any repair costs. They go over your home with a "fine tooth comb" and will find any ( even tiny ) thing wrong with it that they can. They do not want to buy your house from you and send any reports to your realtor, driving down your value with minor repairs and even "create issues" that aren't even there. I wish I knew about how bad they are before we started. I would NOT recommend a relocation company as a way to get out of your house. They also hold you up from getting your house on the market... we could have had ours listed over 4 months ago when the weather was nicer and people were looking. ..but their policies hold you back. And the price they offer you is "way" lower then you can get for it. After already signing papers with them - we talked to many people who have "relocated" .. everyone one of them told me they sold their house before having to sell to the relocation ... and got more money then they would have, but still less then they should have.
0 votes
Chad L, Home Seller, Kenner, LA
Mon Jun 7, 2010
I am selling my house and would like to list it with a relocation company. How do I get started?

0 votes
A relocation company does not serve as a realtor and cannot sell your home for you. The company that hires you also hired the relocation company and your employer picks up all of these costs to sell your house, plus the cost to pay for the relo company services.
Flag Mon May 11, 2015
Brad Anderson, Agent, Maple Grove, MN
Thu Jan 21, 2010
I don't think you would get less for your house, you nay have more fees though.
0 votes
Linleo, , Arkansas
Mon May 25, 2009
Our experience with the relo company has been a disaster!!!!! We had our home inspected less than a year ago when we bought it and it was a great inspection. Then the relo company sends us the "summary" of the relo benefits, which state that they offer a guaranteed purchase offer based on two independent appraisals. They encourage to send the re-payment agreement back immediately. After we accepted the job and signed the re-payment agreement, the "whole packaged" was sent to us. It then said that the gpo was based on two independent appraisals, less any repairs that were needed on the house. They called in ENGINEERS to comb through the house and came back and said that $37,000 worth of repairs needed to be done. Engineers will always find something in any house. This house is a good, sound house based on opinions that we have had through home inspectors. This type of thing is a scam as far as we are concerned. Don't accept the job or sign any kind of re-payment agreement until they have given you the full package, and question EVERYTHING!!!! Unless we can sell the house through our realtor and leave the relo co. out of it, our lives will be ruined.
0 votes
Erica Byfield, , Hartford, CT
Thu Oct 11, 2007
The short answer is..YES. ex. You list your home as a for sale by owner for $319K...comps in your area are selling at or below $289K... ABC Relo company offers to purchase your home at $235K if you don't sell it in X #of days. Whatever amount they offer to you is "fair" because if there are no other buyers, THEY are willing to purchase your home.

Consider selling with a relo company as a dead-last resort, not a first option. Obtain a current CMA for your property and partner w/a Realtor to discuss a strategy for marketing your home. Well-maintained properties that are priced appropriately and have the right exposure in the marketplace continue to sell within 30-45 days.

Listen to solid feedback from prospects (and your Realtor)...if they are consistently commenting on the price or condition of your home in a neagative way, make the necessary adjustments quickly.

Best of luck :
Web Reference:  http://www.century21.com
0 votes
Brett Dunne -…, Agent, Upland, CA
Wed Oct 10, 2007
Hi Patrick:

The answer to your question is simply...Yes. No relo company is going to pay market price or above for a home in a declining market.
Web Reference:  http://www.DayBreakGroup.com
0 votes
Patti Pereyra, , Chicago, IL
Wed Oct 10, 2007
Hi Patrick:

Typically, the relo company will get an appraisal on your house and have you do the same through a separate appraiser. The 2 appraisals are compared and a buyout offer is formulated. You are not under obligation to accept the offer, but it is good for a certain amount of time and is there for you to accept should you not be able to sell your home within a specified period.
0 votes
Ute Ferdig, Agent, Newcastle, CA
Wed Oct 10, 2007
Hi Patrick. Usually you don't sell to the relo company right away. The relo company offers to buy it from you if it is not sold within so many days. That's what I have seen, but I am not a relo specialist. I am sure the relo company does not pay prime dollar, but I don't think it's super discounted either. The relo company probably has an agreement with your employer and it's all part of the reloation package that you are offered. The benefit of dealing with the relo company is that you have a guaranteed buyer if it does not sell within a reasonable time.
Web Reference:  http://www.go2kw.com
0 votes
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