More often than not, you may find Relocation properties, or “Relos” as they are often called, available at attractive prices. Naturally, those unfamiliar with relocation companies may ask how is buying a house from a relocation company different from the regular buying process.
In reality, buying a house from a Relocation company is not an entirely different process. But there are a few details that you need to be aware of since different Relocation companies have different modes of working.
Once you know the pros and cons of buying a property from a Relocation company, it is possible to find a great deal.
What is a Relocation Property?
One of the biggest challenges for a relocating employee is selling the old home to the right buyer. This is where a Relocation company, which is a third party hired by the employer, steps in to assist the employee with the move.
The seller and the company negotiate for the house and during the sale, it can be owned by the Relocation company or by the seller. Usually, the company covers expenses like appraisal fees and attorney fees which can help the seller looking to avoid closing costs during a property sale.
Such a home is termed as a relocation property and real estate transactions for it are conducted through the Relocation company and not through real estate agents.
Apart from assisting employees in selling their current homes, the company also helps with the move and the process of buying a new home. The main objective is to make the process of relocation easier for the employee and save them time and money during long-distance moves.
Now, a seller may expect the Relo company to sell the house quickly and deliver the money. But, what if they are unable to sell the property within the time period?
In such cases, the employer may accept the risk and acquire the entire property through a guaranteed buyout option that ensures the employee a sales price. If there is no buyout option while Relocating, the employee deals with the Relocation risk.
Since a Relocation company provides a broader range of services than a moving company they can make the process of moving less of a headache. So, for an employee, including the services of a Relocation company while negotiating a moving package is a good choice.
Benefits of Buying a House From a Relocation Company
While the popular belief is that Relocation properties are cheaper, it is not so in reality. However, there are a few pros of buying a Relocation company real estate. Take a look.
- Most Relo companies want to get a quick return on their investment and are well aware of the market. So even if you do not get a steal of a deal, you can expect a fair price tag on the property. In some cases negotiating aggressively is possible as these companies are not looking to make the highest profit.
- Since the company works with a professional mindset, there are no emotions involved with the selling process to complicate the negotiations. Getting emotions out of the way is a good way to complete the selling process quickly.
- Most Relo companies ensure that the house is in good shape to make the sale as quickly as possible. This means they will spend money to make the necessary repairs prior to selling.
Downsides of Relocation Company Properties
While buying a Relo property, it is best to sell your old home first. Quite simply, Relo companies will not give you extra time if you are awaiting closing with a buyer.
Also, Relo companies will not waste time on non-serious buyers. Since they are looking to make a quick sale, they are interested in buyers with solid finances.
Apart from that, here are a few downsides of dealing with Relo company properties.
- In most cases, buying a Relo property involves additional paperwork. Since they tend to minimize their liability there will be additional riders, disclaimers, and contract documentation that you will have to sign. This will stretch out the buying process.
- Since these companies have a corporate structure they do not have extended working hours like real estate agents. So, they will not work through weekends to reply to your queries at the earliest.
- Most Relo companies prefer no-contingency offers which can be a risky move for buyers. In such cases, you should consult an experienced real estate agent to find out the contingencies that you will need.
- Some Relo properties are sold as-is by the companies. This means that the cost of repairs for the home will be more than the money made from sales. It is best to avoid buying such properties as repairing costs can add up quickly.
How to Save Money When Buying a Home
Even with property values skyrocketing, there are some effective ways to save money while buying a relocation property. Listed below are a few that you can make use of.
- Choose an experienced real estate agent who is a first-rate negotiator and is committed to their client’s cause of saving money. The right agent can help you locate properties of great value and help in listing down inspection and appraisal contingencies to protect you from overspending.
- Try to time your home purchase so that it does not fall in the peak house-hunting season. The right season when sale prices drop varies depending on the location and you can take the advice of agents who can point out the offseason period
- Consider making a higher downpayment to lower your mortgage interest loan. Additionally, this can help you to save on private mortgage insurance (PMI). There are ways you can save for a house down payment and make more savings in the long run.
- Set an ideal price range and try to find a home that is at the lower end of your budget. A more affordable home may be smaller in size, but, it will not only allow you to make a higher down payment but will bring down your property tax bill as well.
Another great option is to take advantage of the ARC Realtor Rebate when you sell or purchase a home. When you work with an ARC-affiliated agent (which are available everywhere) you get a cash rebate which is a percentage of the agent’s earned commission.
ARC has a large network of experienced agents that you can choose from. Unlike other rebate programs, the ARC Realtor Rebate has no caps and a quick 2-day turnaround time.
Final Thoughts
All in all, you can expect great service and professionalism from a Relocation company. In case your Relocation package includes the service of Relo company, we suggest that you grab the chance.
Before fixing on a Relocation company real estate, make sure that you understand the pros and cons of doing business with them. Also, do your own research on the real estate prices in the area before negotiating with the Relo company.
In case you need any support to take in the pros and cons of a Relocation home sale program, the ARC Relocation team is here to support you. No matter the type of Relocation assistance you are looking for, you can depend on our comprehensive Relocation services to guide you through the process.