The fear of losing money on a home sale is one of the key factors that keeps employees from wanting to relocate. It's a valid fear in today's market, especially if employees homes are already “under water” (that is, they owe more on the mortgage than the home is worth) due to increased interest rates, second mortgages or home equity lines of credit.
One way corporations are making the decision to relocate easier for homeowners is with loss-on-sale policies that help employees recoup some of the financial loss they may face when they sell their current home. If your company doesn't have any loss-on-sale relocation policies -- or if you have one that hasn't been effective in increasing your workforce mobility, it may be time to give your employee loss-on-sale relocation policies a second look.
According to a survey completed by ERC, 46% of companies have a loss-on-sale policy in place. Another 18% deal with loss-on-sale on a case-by-case basis.
Loss-on-sale policies can add as much as 33% to a company's relocation costs. But not having such a policy can make employee relocation difficult, if not impossible in some cases. The most successful loss-on-sale relocation policies share financial responsibility with the seller in a way both parties find equitable.
Capital Relocation Services has been successfully implementing consistent and equitable loss on sale relocation policies for its clients since the start of the real estate crisis, and will help your company keep from reinventing the wheel each time you deal with an employee with a home that faces a loss-on-sale.