Relocation Properties

Great Opportunities

Relocation Listings are great opportunities for the savvy buyer.

Relocation listings are properties offered for sale because the owner is required to move for their job. The tip off is that you may see the phrase “relocation addenda required” or “corporate owned” in the property information package.

The seller is motivated, and the asking price has usually been carefully established by broker price opinions, appraisals and/or a 3^rd party review process. The homes have sometimes been pre-inspected and copies of the reports are made available. Though the home may become vacant during marketing, these are not distressed properties. Move in condition (or better) is the norm. Some or all of the major selling costs may be paid by the owner’s employer, resulting a win-win negotiating scenario.

There are 3 basic types of Relocation Listings:

1. Direct sale - this is handled very much like any other sale and standard local paperwork is used during the transaction. In these cases, any financial relocation benefits and sales support are provided to the seller in the background.
2. Inventory property - this has been purchased by a Relocation Company to help the employee move to their new job assignment. These corporate owned properties are well maintained and priced to sell quickly. You negotiate with an unemotional seller who wants to get to an acceptable ‘bottom line’.
3. Marketing assistance is the most common type of Relocation listing. These transferring sellers have the support of an industry specialist who provides referrals to Relocation certified Realtors and counseling on establishing an aggressive marketing strategy. Due to IRS guidelines, employer reimbursement of real estate commissions and other selling costs are taxable as income to the employee. For more favorable tax treatment, the owner may first transfer the property to the employer's relocation services provider who will then pay the selling costs directly.

When making an offer on a Relocation listing, you will likely be presented with specific contract addenda and disclosures.

How to Purchase Relocation Properties

Congratulations, you have found your next home and are ready to make an offer! Each relocation company has slightly different procedures. Usually your offer is presented to and negotiated with the homeowner; however their relocation company signs the sales contract as the Seller. This process is based on IRS guidelines governing Marketing Assistance programs. You may receive duplicate disclosure forms, signed by the current homeowner as Seller and the Relocation company as Buyer and a second set of disclosures indicating the relocation company as Seller.

If the property has already been transferred to the Relocation company’s Inventory, then all negotiations are with a corporation rather than an individual. There is no emotion involved in the sale of property by a Relocation company; every decision is based on the net results of the sale. While price is paramount, every aspect of your offer is taken into consideration including the closing date, your financial strength and any other contingency included.

To expedite acceptance of your offer, obtain and submit a pre-approval letter from a mortgage lender to assure the relocation company that you are financially qualified to complete the transaction. If you are presenting a cash offer, provide a verification of funds letter from your financial institution. Relocation companies will not accept an offer subject to the sale of another property. They may consider an offer that is subject to the successful closing of another property. In such cases, you will need to provide a copy of the accepted offer on your property as well as that buyer’s mortgage pre-approval letter.

Relocation companies transfer property in all states. It would be very time consuming to have their legal department review each different local contract. Therefore relocation companies supply their own Addenda or Rider to Contract that they ask you to sign. Sometimes, the relocation company has completed various inspections of the property that are being shared with you for informational purposes. Your signature acknowledges receipt and awareness of the inspection reports. The inspector who has completed those reports is only responsible to their client, the relocation company. It is recommended that you hire a home inspector to complete a general inspection of the property, and any other contractor for specific issues that are of concern to you. Any repair requests must be approved and written into the contract or an addendum to the contract.

A Radon warranty plan may be included by the relocation company. Typically the terms of this guarantee are that within one year after closing you shall have a radon air test completed and if results are of a certain level, mitigation will be completed at the expense of the warranty provider by the contractor they name. This eliminates negotiation of radon issues during the transaction, and assures that you may address radon at a future date.

When you submit your final terms in a written Offer to Purchase and they are verbally approved by the homeowner, it will be sent to the relocation company. The agreement is subject to review. The relocation company will not execute any contract if all appropriate signatures and/or initials are not made throughout the Addendum and attachments. Also, the relocation company sometimes is still in negotiation with, or in the process of receiving other documentation related to, the homeowner/transferee’s transfer. Typical turn-around time for a signed purchase agreement is 3–5 business days once all the documentation and any corrections are submitted.

Some buyers, and some real estate agents, shy away from relocation properties because of the extra paperwork and a feeling of uncertainty about verbal negotiations. However, there is a distinct advantage in negotiating based on “bottom line” rather than emotion because negotiations are generally more clear-cut and agreement is often achieved more quickly. In addition, relocation properties may have the advantage of having cosmetic work such as interior painting and minor repairs already completed and quick possession is generally available.