Mobility Strategy - Market Practices

U.S. Domestic - Home Sale Programs

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1 © 2022 Graebel Companies, Inc. All Rights Reserved. This document contains CONFIDENTIAL information. Reproduction and distribution of this document in any manner or for any purpose is prohibited without the express written permission of Graebel Companies, Inc. U.S. Domestic Relocation – Home Sale Programs – Best Practices Best Practice is a Home Sale program that produces two distinct and separate sales which allows the cost for that sale – normally paid by the seller – to be paid by the employer without a tax consequence to the employee. Type of Home Sale Program Buyer Value Option (BVO) > The Buyer Value Option (BVO) home hale program produces two distinct and separate sales. This allows the closing costs – normally paid by the seller – to be paid by the employer without a tax consequence to the employee. o The BVO program is sometimes referred to as a "Market Value Driven (MVD)" program. > The employee's property must be deemed eligible for the employer's home sale assistance program o Eligibility is typically based on a number of criteria, including, but not limited to the property carrying clear title, the property being free of any significant repair issues, the property not sitting on excessive acreage, etc. > The BVO program must be structured to comply with IRS regulations; there are "Eleven Key Elements and Procedures" the Worldwide Employee Relocation Council (WERC) has outlined to help ensure compliance. > The Relocation Management Company (RMC) will provide a list of relocation-trained real estate agents to the employee. > Two BMAs (Broker Market Analysis) are ordered to establish the "most likely sales price" (MLSP). > If the BMAs vary by 5% or more, a third BMA is typically ordered, and the two closest amounts are averaged to determine the MLSP. > The employee is most often instructed to list the home within 103 - 105% of the MLSP to facilitate the sale. > The listing agreement between the employee and the listing agent must include the "Exclusion Clause" that outlines how the bona fide offer process works and the role of the RMC. > Inspections may be ordered upfront, and the employee is responsible for taking care of any deficiencies; this practice varies by state and client approach. o Many companies favor a Major Components Inspection (MCI) vs. a General Home Inspection (GHI). An MCI is focused solely on significant repair issues that would likely render a home unsalable, e.g., damaged roof, foundation problems, heating and/or HVAC issues, plumbing, electrical systems, etc. The use of an MCI vs. a GHI may help to reduce the number of repairs the employee must address, thus enhancing the employee experience. > The RMC receives bi-weekly marketing updates. from the listing agent, discusses information with the employee and may recommend changes to facilitate the sale.

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