Published on January 03, 2020

New Relo Home Purchase Assistance

sell-house-above-marketA major component of professional corporate relocation programs has always been – and remains – assistance with selling the transferee's current home and purchasing a new residence in an unfamiliar area. The recent recession and accompanying housing crash has made this relocation component even more vital to a successful executive move. The continuing uncertainty regarding a consistent economic recovery has kept the real estate markets from rebounding around the U.S. Compounding this perfect storm, mortgage lenders have tightened qualifying criteria for all prospective homeowners. The strong potential for a transferee to endure a loss on the sale of a home completes the numerous negative factors involved in an executive relocation.

Home Selling and Purchase Assistance Needs Are Not Restricted to Executives

Although historically rare in normal or hot real estate markets, relocating employees occasionally suffered a loss on the sale of their homes. Typically caused by a necessary rush to sell to meet relocation dates, in recent years millions of homeowners have found their homes' values depressed, often equalling less than their outstanding mortgage balances.

Senior executives are neither immune to this problem, nor are they the only group affected by the housing crash. While potential executive real estate losses on sales may larger than some other transferees, every employee/homeowner risks suffering this fate.

These conditions create home selling and buying economic nightmares for some of your most valuable employees. Similar to transferred employees, new hires face the same daunting challenges. A good relocation policy addresses these serious, expensive concerns. Those relo programs missing this feature have led to many employees rejecting promotions that involve moving to a new, distant location.

New Relo Home Purchase Assistance

Historically applicable to transferees who were already homeowners, some of the better relocation programs also feature this benefit for those who were renters. Other benefits typically common to successful corporate relocation policies include the following features:

  1. The employer reimburses closing costs incurred when buying a home in the employee's new location.
  2. The employer pays one or more points on the new mortgage.
  3. The employer sets up direct billing with the new mortgage lender, to control and reduce administration requirements.
  4. The employee receives a "bridge loan" from their employer if their former home is not sold in time for the move.
  5. Depending on the employer's workplace locations, some companies offer transferees a sliding scale of home purchase assistance amounts relative to the sometimes wide differential in housing costs.
  6. In periods of rising interest rates, the employer provides for a temporary "buydown" of prevailing rates for the first three to five years at the new location.

While controlling relocation costs remains a top priority, employers still must hire and retain the most talented employees available. Adopting a relocation policy that effectively addresses these real world home selling and purchasing issues is a wise business decision.

Using one of the top professional relocation firms can also help control costs and reduce employer administration requirements. Forward-thinking employers understand that relocation expenses are one-time charges but engagement and high performance of a valued employee helps the bottom line indefinitely.

Real Estate Tiers & Selling Assistance

Real estate tiers feature different options that may incentivize employees to sell their homes more quickly or give them a guarantee that they won't be stuck paying an old mortgage long after they've moved to their new location

Guaranteed Buyout Program

Sample real estate tiers may include executive level home sale assistance and a Guaranteed Buyout (GBO) program. Executive level home sale assistance is typically reserved for high-level executives. It involves providing

New Home concept - Small Flag on a Map Background with Selective Focus.

a buyout offer after a home has been on the market for a certain length of time. This gives your high-level executives the assurance that they can confidently purchase a new home without the constant worry of whether their old home will ever sell.

To offer a buyout option, your company needs to be prepared to be responsible for the costs associated with carryin

g a home in inventory until resold. This isn't the optimal situation, but it could be well worth it if it helps increase the productivity of a strategic employee.

Buyer Value Option Program

For mid-level employees, you may consider offering a Buyer Value Option (BVO) program, which offers similar advantages to a GBO once an outside buyer has been identified. This option often focuses on providing employees with sufficient marketing support they need to sell their homes. A BVO minimizes the risk of inventory costs and provides a high level of employee satisfaction.

Relo Home Sale Bonus Incentive

A final aspect of real estate tiers for homeowners is the home sale bonus incentive, which can also be added to relocation packages at any level. This involves providing an additional bonus for employees when they sell their homes within a certain period of time. These bonuses – also known as quick sale bonuses – provide employees with motivation to sell their homes more quickly and make it more cost-effective to invest in repairs and improvements and services like home staging.

Quick sale bonuses benefit employees because they deliver greater incentives to sell their homes faster and relocate without having their attention, focus and efforts pulled away by their old pieces of property. They're also more likely to bring in good prices on homes that are still occupied and that have spent less time on the market.

There are benefits for employers who encourage relocating employees to sell their homes quickly, too. The sooner your employee sells, the shorter the overall relocation process will be, which can save your company major costs on the relocation package. You'll also benefit from having your employees return to full productivity as soon as possible.


Not all relocating employees will be homeowners and may opt to rent in the new location as well. Additionally, current homeowners may not want to purchase a home in the new location, so it's important to include provisions in your real estate tiers for renters, as well as homeowners. These could include:

  • Lease cancellation penalty reimbursement
  • Connecting the employee with a rental specialist in the destination location
  • Rental finding trip, including transportation costs, lodging, meals and rental car
  • Temporary living assistance
  • Area touring fees or finder's fees, if required.

Selling & Buying for Executive Relocation Real Estate Services

Executives can be reluctant to relocate because of real estate issues. To solve these concerns and attract top quality executives, employers should provide real estate services that seamlessly help executives transition from one home to another. Replacing an executive's current home in an unfamiliar location is one part of the real estate equation.

The relocation real estate equation has two primary parts: First, selling the employee's current home quickly and without financial hardship to the executive. Second is buying a comparable home in the new location.

The experts have been writing and talking about the housing market crash during the recent recession. However, even though sales and home selling prices have been down, this condition is often not a top concern of executives. The most pressing concern of transferring executives often relates to timing.   In particular, the lack of time it takes to sell one high-end home and buy another.

Selling the Executive's Home House_and_Contract-1

Transferees worry about selling their home quickly or leaving this difficult task to their spouse and family.

Some of the benefits employers offer include:

  • Providing referrals to a trusted real estate broker with a proven track record of facilitating high-end homes.
  • Offering monetary compensation for a "loss on sale"
  • Offering buyer incentives to motivate interested parties to act
  • Building in a bonus for a fast sale


Relo Home Buying Assistance in the New Location

Executives' faced with buying a new home in an unfamiliar location, compounds time concern. Employers want transferees on the job at their new workplace as soon as possible. This leaves little time to search for a new home. Some of the benefits employers offer include: 

  • Providing referrals to relocation savvy real estate brokers with experience in high-end properties.
  • Assistance locating the best mortgage lenders and programs

These real estate services save time while minimizing potential errors in home buying decisions caused by lack of familiarity with the location. Having real estate experts at the executive's disposal makes him or her much more comfortable in house hunting and purchase matters.

Professional relocation firms usually have preferred real estate brokers and mortgage lenders that have proven experience in helping executives relocate successfully over time. The help in minimizing transferee stress and uncertainty these area experts provide allow the transferred executive to arrive at the new workplace energized, comfortable and ready to contribute to employer operations.

The executive's spouse and family also appreciate this help. After finding the appropriate home and neighborhood, family concerns diminish rapidly.

Competitive executive relocation programs should include home selling and purchasing assistance. Duplicating the outstanding location and amenities of a former home often dominate executive concerns.

These real estate services, performed by trusted experts, have a significant effect on the executive's satisfaction with the relocation. New hires are often particularly impressed with their employer's integrity and concern for their well-being, thus reducing "buyer's remorse" that may creep into the executive's consciousness. These services further cement the wisdom of the new executive's decision to come on board with the company.

Similar to other specialized services included in executive relocation policies, the short-term cost of offering this assistance is recouped over the long-term, satisfied executives are high-performing executives.