Expierences with relocation companies (appraisal, foreclosed, 5%, commission)

[rubytue]

How long do they usually give sellers to sell before they buy the house and sell it themselves? Is their a standard method they use to figure out what to buy it for (e.g. 10% under initial list price)?

I'm looking at a house on the market for over 90 days, and the sellers are going through a relo company (I know which one, but I don't want to post it). We (me, husband, & agent) all believe its still over priced, despite their price drops. Our offer is still on the table, but the sellers won't budge. So I'm thinking we might just try to wait it out and deal with the reloc company. That, of course, assums no one else wants it in the next couple weeks, since I'm guessing its 120 days.

[Apple Annie]

It varies between *relo companies. They usually get 3 appraisals which are very comprehensive and accurate, including a written opinion of value and suggested market time. Some also send out a scout anonymously to the area/neighborhood to "look it over" and take photos as to desirabililty, then they make their offer to the seller. The seller locks in a purchase price with the relo company and turns the house over to them after a negotiated period of time (which as I said can vary from 30 days or longer sometimes) The real estate broker cannot divulge any information to you because he/she is working for the relo company. The relo company pays the commission and closing costs on the selling end and the seller gets the gross purchase price. Unless you are offering more than what the seller is getting from the relo company, you are beating a dead horse. Don't try to second guess the situation, just go in with your top dollar. The relo company might wiggle slightly on the price, like $2,000 or so, but no fire sales. Any "discount" takes into consideration the qualifications and terms of the buyer. Such as length of time to close, their carrying costs, etc., amount of down payment, pre-qual letter, home inspection etc.

Normally, the relo companies offer the seller a very fair price and they do their homework. I would venture to say that the house is priced right on the button or very close to it because they are not in the business to lose money. *Actually, the relo company itself is not the one who will eventually "own" or take title to the home in the interim. They use what is known as a "holding" company in between buying and selling the property; title is being held by their "holding" company.

Simply pay market value if you love the house and want it. That goes for any house on the market. You are not going to get a deal from a relo company unless they made a huge mistake and the house is an "OPT". OverPricedTurkey

[RickMG]

A few other things. Although this does sound like the relo company did give the seller a buyout figure because it seems like the seller has nothing to loose by not accepting your offer. They get to pocket anything over the buyout amount and as long as the seller is still the owner, they are the only ones with the power to accept an offer until they take the actual buyout amount (even though they don't sign the contract). That means a relo company has no power to force a seller to accept an offer.

I've seen a lot of relo's lately where the relo company does not offer a buyout, they only pay the commission and moving expenses. Now paying the commission saves the seller a lot of money and realistically they could accept less than what the home would normally sell for and still come out ahead, but good luck finding a seller like that. Apple Annie gave the best advise, if you want the house pay the price they will take and don't wait unless you don't care if you loose it.

[rubytue]

Thanks for the info

Originally Posted by Apple Annie

I
Normally, the relo companies offer the seller a very fair price and they do their homework. I would venture to say that the house is priced right on the button or very close to it because they are not in the business to lose money.

My only quibble with this is that they have dropped the price $30k over the past 90 days. It might be priced well now, but it wasn't to start with.

[RickMG]

"They get to pocket anything over the buyout amount and as long as the seller is still the owner, they are the only ones with the power to accept an offer until they take the actual buyout amount (even though they don't sign the contract). That means a relo company has no power to force a seller to accept an offer."

rubytue, when I said that, I forgot to say that until the relo company actually buys the home, the seller, not the relo company pics the asking price and accepts the selling price. The relo companies don't loose money, the seller's employer does (actually they consider this as a business expense) as they pay the relo company.

I think I explained why the price was so high, and the reason it came down is the seller still wants to make more than he's being offered and probably got little or no showings or lots of showings and no offers and knew it was priced too high. Good luck, sounds like you're doing a lot of homework and at least you're smart enough not to have overpaid when the price was way up there.

[OcalaSeller]

I am currently selling my home, and am working thru a relo company. The relo company doesn't actually buy the house from me until I accept an offer from a real buyer. At that point, the relo company buys the house at the accepted offer price, and then goes to closing with the actual buyer on my behalf. The only benefit to me is that I don't have to worry about the sale falling through.

Hope this helps.

[FLPL75]

When we were looking into a possible relo
this is one of "packages"
The "relo" company would get 3 appraisals
they would set the price
we could of sold for 5% less that the price and still get the set price
if we sold within 90 days we would get a bonus
if we didn't sell with in 90 days the company bought the house

now also in the "relo" information there was a blurb that said we could buy our "new" house from "company inventory" for 5% less that the list price

There were also other "relo" packages where they would pay the commission and closing costs but not buy the house.

I have read many postings on a different forum where folks have tried to buy relo houses once the company had bought them offering lowball bids and the process seemed to go on forever

karla

[richmondyanks]

I have a question that I'm hoping someone can help me figure out. We are selling our house through a real estate company, but our new employer will use a relo company to purchase it from us if the house doesn't sell in the next 60 days. I'm trying to figure out how to assess any offer we might get between now and then that comes in, most likely, below asking price. If we think, based on comps etc., that we have our house priced appropriately right now, what is the likelihood that a relo company's purchase price will match it? How far off could they be? Is there any way to know/guess at this so we know not to accept an offer more than x% below asking? Thanks!

[middle-aged mom]

Originally Posted by richmondyanks

I have a question that I'm hoping someone can help me figure out. We are selling our house through a real estate company, but our new employer will use a relo company to purchase it from us if the house doesn't sell in the next 60 days. I'm trying to figure out how to assess any offer we might get between now and then that comes in, most likely, below asking price. If we think, based on comps etc., that we have our house priced appropriately right now, what is the likelihood that a relo company's purchase price will match it? How far off could they be? Is there any way to know/guess at this so we know not to accept an offer more than x% below asking? Thanks!

Relocation companies will minimally order two appraisals. Many are trending towards three and occasionally four appraisals. They average the appraised values and that becomes your buy-out offer.

There is no telling if the buy-out offer will match what you think your property is worth. Generally speaking, right now, in most areas, the buy-out offer tends to be less than what most people believe their home is worth. Right now, in most areas, transferred sellers eventually end up taking the relo offer because it's the best offer, at the time.

In this market, in most places,when the relo company eventually sells the place, it is almost always for less than they paid the former owner because most markets are depreciating.

Most buy-out offers contain a bonus if the owner sells the house without benefit of a buy-out. Some relocation packages also pick up closing costs, including brokerage, giving the transferred party a tremendeous advantage over traditional sellers.

Having said this, there are many,many transfered sellers who are offered only a token fixed $ amount to help cover some of the costs of relocation. These "packages" are becoming increasingly more common that the buy-outs.

[middle-aged mom]

Originally Posted by Karla with a K

I have read many postings on a different forum where folks have tried to buy relo houses once the company had bought them offering lowball bids and the process seemed to go on forever karla

Relo- company owned homes often represent the best values in the market because they tend to be well maintained homes, that show well.

Most relo -owned homes in my area, are good values but are not going to sell at a foreclosed sale prices.