A client asks:
What is it like to buy or sell a home from a relocation company?
Our answer: First, let us describe what happens when a seller sells a home through a relocation company:
- The seller, who usually works for a large company, say IBM or GE, etc., gets an offer from his/her employer to move to another state. As part of the "relocation package", the employer offers to help the seller with the sale of their current home.
- The relocation company usually offers the seller something akin to the following: If the seller cannot sell their home within a certain amount of time, the relocation company offers to buy the home from the seller, no questions asked. That alleviates a lot of the pressure from the seller's perspective. But as always, there's a catch: The relocation company will appraise the property and buy the property at the appraised price - not necessarily the same (and usually less than) the seller's desired listing price. This serves to give the seller an incentive to sell the property themselves, because they can usually get more for the property this way.
- There's another catch, from the buyer's perspective: The relocation company that's helping the seller sell the home usually mandates which listing company the seller use, and furthermore, demands a referral fee from the listing agent for "connecting" the seller to the listing agent. Additionally, the relocation company usually has a bit of a convoluted process when a buyer makes an offer on the home, which functions as follows:
- When a buyer makes an offer on a property listed by a listing agent chosen by the relocation company, the sellers (owners) of the property cannot actually sign any of the contracts. In fact, the seller's name cannot appear anywhere on the listing agreement. Additionally, there's usually a set of addenda that the buyer has to sign which contain clauses like agreeing that the property is sold in "as-is" condition. This means that you, as a buyer, will have to sign away many of your rights as a buyer. You need to be very careful when putting an offer in on a relocation property - read these addenda carefully (and as always, have a trusted real estate professional at your side to guide you through this process.)
- Once the buyer & seller agree to a price (verbally), the contract then has to be written up in the name of the relocation company as the seller. Then, a few days before settlement, the seller (owner) transfers the property into the relocation company's name, and they in-turn are the ones who actually sell the property to the buyers.
We hope this information helps. Buying a property from a relocation company can be a painful process, but it can be done! We are here to help.