Your relocation tiers can be as detailed and nuanced as you need them to be. Some companies find it useful to establish specific real estate tiers as part of their packages. 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 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 carrying 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.
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.