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Guaranteed Home Buyout Option (GBO)

ARC Relocation Guaranteed Home Buyout Option

Guaranteed Home Sale

A Guaranteed Buyout Option (GBO) is a relocation benefit where the company’s relocation provider buys a transferring employee’s home at fair market value, letting the employee move on time without waiting for an outside buyer. ARC has run GBO programs for decades, including as a GSA-approved vendor under Schedule 653-1, and the process follows IRS and ERC guidelines so the buyout stays tax-protected for both employer and employee.

  • What it is: a relocation benefit where the relo company buys the employee’s home directly
  • Who offers it: companies that need executives or specialists in place quickly and can’t wait on the housing market
  • How the price is set: averaged appraisals from independent relocation appraisers, typically within a 5% spread
  • Tax treatment: structured to keep selling costs and commissions tax-protected for employer and employee
  • Why ARC: GSA Schedule 653-1 vendor, independent (no franchise affiliations), decades of program experience
The Guaranteed Buyout Program Explained in 1 Minute

What Is a Guaranteed Buyout Option?

A Guaranteed Buyout Option, or GBO, is a relocation benefit where the relocation management company buys the transferring employee’s home at fair market value so they can relocate on the company’s timeline rather than the housing market’s. The relocation company holds the home in inventory and resells it on the open market while the employee starts at their new location.

The GBO usually exists as a fallback inside a broader relocation home sale program. Most company policies require the employee to market the home for 60 or 90 days first. If the home doesn’t sell in that window, the GBO kicks in.

That fallback structure matters because it pushes the employee to sell on the open market when possible, which keeps the relocation company from carrying inventory and keeps the program affordable for the employer.

Guaranteed Home Sale Process
Guaranteed Home Buyout

Do relocation companies buy houses?

Yes. That is one of the most utilized/needed services for some employees to relocate in a timely fashion.

Commonly known in the relocation industry as a “guaranteed home sale” or a “guaranteed home buyout” the relocation company purchases the home directly from the relocating employee to allow the employee to continue the relocation proceeds without having to wait for an offer on the open market from an outside buyer.

What are the advantage of using a Guaranteed Buyout Option?

There are three main advantages that company recorgnize when providing a Guaranteed Buyout Offer to employees that are relocating:

  • The Guaranteed Offer expedites the process and allows the employee to relocate to their new destination without having to wait to procure an offer from the open market.
  • A Guaranteed Buyout provides tax protection for both the employee and employer in regard to the realtor commissions and selling / closing costs.
  • It reduces stress by streaming the “escrow process” by dealing with a “professional buyer” vs the a buyer and agent from the general public.

The Advantages of Using ARC Relocation for a Guaranteed Buyout Program

  • ARC’s independence and lack of franchise affiliations allow ARC to list homes with the best real estate brokerages to sell more quickly and for top do
  • We take the title to the home and truly become the owner.
  • ARC is considered an industry leader for guaranteed home buyouts (based on certifications and experience)
  • We offer clients the best in software and technology to track the process.

ARC uses its expertise to advise clients on best practices while following all of the IRS and ERC guidelines for relocation home sale programs.  Click here to learn more about IRS regulations. Also, we are a guaranteed home buyout vendor for the United States Government under GSA schedule 653-1. Being on schedule 653-1 means our process, technical capabilities and experience have all been screened and approved by the GSA. ARC provides guaranteed home buyout and home sale services for many of the agencies who regulate these services.  In turn, our experience, technology and clientele, place us at the forefront of the industry.

GBO vs. BVO vs. Amended Value: What’s the Difference?

These three programs sound similar and get confused often. Here’s the practical difference.

Guaranteed Buyout Option (GBO). The relocation company commits in advance to buy the home at appraised fair market value if it doesn’t sell during the marketing period. The employee has a guaranteed exit.

Buyer Value Option (BVO). The relocation company doesn’t commit to a price upfront. The employee markets the home and finds an outside buyer, and the relocation company then steps in to purchase from the employee at the outside buyer’s price before reselling to that buyer. The structure preserves the tax protection of a relocation home sale without the company taking inventory risk.

Amended Value Option. Similar to BVO with a twist. The relocation company orders appraisals and offers an amended value buyout the employee can accept if no outside offer materializes. The employee has more options than a pure BVO and the company has more flexibility than a pure GBO.

Most modern programs use BVO or Amended Value as the default and reserve the full GBO for situations where speed and certainty truly matter.

Advantages of a GBO

A few things separate the GBO from other home sale benefits.

The employee can relocate on the company’s timeline. That’s the headline benefit and the reason GBOs exist in the first place.

Tax protection runs through the structure. Real estate commissions and closing costs paid through the GBO are typically deductible for the employer rather than taxable income for the employee, which improves the after-tax value of the benefit by tens of thousands of dollars on a typical home.

Stress drops for the employee. They deal with one counselor and a professional buyer rather than a string of showings, lowball offers, and inspections. For a senior hire with kids in school and a spouse with their own career, this matters more than the dollars sometimes.

Inventory risk shifts to the relocation company. The employer gets cost predictability and the employee gets a closed transaction.

Complete to Work with a Certified Relocation Counselor

Faq

The following FAQs were answered by ARC Relocation Consultant Andrew Sumner, with over a decade of experience in assisting companies and transferees execute guaranteed buyout offers.

These outline the industry best practices that both clients and transferees should consider and why.

What is a Guaranteed Buyout Offer?
A GBO is the safety net provided by an employer in the event the relocating employee is unable to sell their home over a fixed period of time but is needed at their new location. A GBO is typically accepted after the transferee has marketed their home for sixty or ninety days (depending on the company relocation policy). The reason employers embrace a mandatory marketing time in their company relocation policy is to encourage the transferee to sell their home on the open market to a buyer. The GBO is only reserved in events where the transferee has marketed the home but cannot attract a buyer in time to relocate to their new location.
What Do Relocation Companies that Buy Houses Do?
My job, as the Relocation Counselor, is to administer a client’s relocation policy for the transferring employee and educate them on relocation benefits such as the home sale process. It is important not to rush the employee counseling process. Once the employee reviews their GBO benefits and feels comfortable with the details, I arrange a phone call to personally speak with them. I dedicate up to an hour of my time educating, addressing questions, and easing any concerns. There are many misconceptions and concerns about buyouts, so this allows me the opportunity to separate fact from fiction before beginning the process and put the transferee at ease about the program and process.
How is the Guaranteed Buyout Offer Price Calculated?
Depending on company policy, two relocation appraisals are typically ordered, and if they are within 5% of each other, their average establishes the guaranteed buyout offer price. Some clients may allow a 7% or 10% spread, but 5% is standard in the relocation industry. If the first two appraisals are out of spread, a third appraisal is required (per the ERC guidelines). Then, the two closest usually determine the transferee’s GBO. This is the most common way that the GBO offer amount is determined. This is known as “fair market value” in the relocation industry.
How are the Appraisers Selected?
I always inform the transferee that they can provide names of appraisers for consideration. If their appraisers are qualified to complete a relocation appraisal, I have no problem suggesting they use these resources. Although it’s rare for a transferee to provide appraisers for consideration, when this perk is taken advantage of, I have experienced occasions when their appraiser’s bid is lower than those supplied on our list. When this happens, it often makes providing the GBO a much smoother process.
What is The Importance of the List Price?

Providing an employee with their guaranteed buyout offer should always be handled delicately by the relocation counselor, especially if the transferee’s home is priced significantly above their GBO. In real estate “over listing” a home is the largest mistake in home marketing. This often renders extended days on market and a lower ultimate sales price. A relocation counselor should know if the GBO will put the transferee in a deficit situation by asking about their mortgage balance during the initial call or seeing the balance noted on their title report. A deficit would require the transferee to send money to the relocation company prior to the acquisition of their home if they were to accept the GBO. This factor can make-or-break a phone call, so the presentation of the GBO to the transferee is vitally important.

Before delivering their GBO, I find it important to reiterate the purpose of a relocation appraisal.  Most commonly the appraisers appoint a listing price for the home with an expectation to sell within a 120-day marketing period. It would be ideal for a transferee to sell their home on the open market to a buyer for a price higher than their GBO. However, in the event the transferee is unable to sell their home within 60 days (or 90 days, depending on the client), the GBO is their “fallback”. I also review what is done if an offer arrives that is greater than their GBO. (This ensures that the transferee is aware of all options to attract the highest offer on their home.)

What is the Goal of the Guaranteed Buyout Offer Program?

The program’s ultimate objective is to allow the transferee to relocate whether or not an outside offer from the open market is received. The GBO price should be fair, and should reflect what the Relocation Company will ultimately resell the home for after carrying the home in their “inventory”. This is most successful when the client has established GBO requirements. If two Broker Market Analysis (BMA) are completed, many clients mandate that the list price does not exceed 105%. If these requirements exist, then a client can reduce the need to take a home into inventory.