Relocation company offer too low (closing, fees, brokerage, for sale)

[Keeper]

Not sure if anyone can help, but I have a friend who moved to a new job and city. Her company agreed to buy her home but now the relocation company they use is offering her 30K less than what other homes in the area are selling for and less than what she owes on her mtg.

Any suggestions on what she can do to make them pay fair market value?

[gbone]

It mostly depends on what the company's relocation policy says regarding the house purchase. I say mostly because I have seen some companies make exceptions for "key" employees, due to the offer being to low to allow the employee to move and not lose a bundle. Does the relocation policy specify how a purchase price will be determined? Does the relocation policy have a provision for an appeal and/or a second opinion on fair market value? If the price offered is putting a substantial financial burden on the employee I would suggest that they talk with both their immediate supervisor and Human Resources and let them know the situation. At least they will know what their options are then.

[Annemieke Roell]

Your friend may also want to have her own appraisal done.

[middle-aged mom]

The sponsoring company determines the policy for routine and key employee transfers. The Relo Company is paid to manage the relocation and administer the policy. When a Relo Company has to buy a transferee's home and carry it in inventory, the cost is rebilled back to the sponsoring company with management and transaction fees, plus carrying costs, that make the typical 5-6 % brokerage cost look like child's play.

Generally speaking, Relo is taking a tougher line in terms of buy out numbers because sponsoring companies are holding the line on cost. Some are now using the average of 3-4 appraisals whereas it used to be two and the offer is heavily influenced by the absorption rate for the area, the length of time it would take to sell all homes currently for sale in the market, based on the current rate homes are selling.

Most relo packages continue to offer a financial incentive for the owner to sell to the public including the cost of brokerage and an assist with closing costs on both ends.

I think it unlikely that multiple appraisers could all miss that other area homes are selling for more, assuming those homes are indeed comparable. Is it possible that your friend is looking at the ask prices instead of the facts of closed comps?

If your friend has recent factual information that is different that what is in the appraisals, as bgone said, most relo packages provide for a process of appeal.

If you think of it, come back and tell us how ths turns out.

[Keeper]

Thanks everyone.. I was told they are comparing houses that are not in the specific area (close by) but she lives in a planned community that is considered 'upscale'. Also, the home is in FL where homes just aren't selling very quickly.

I did tell her to get several appraisals.

I do appreciate the information.. Thank you sooo much.

[tulip66]

We recently had the same thing happen to us this year during our Corporate Relocation move. All expenses were paid as well. Appraisel came in low, and we were offered less than we paid for the home 3yrs ago. In the end we
sold to a buyer (still below our purchase price) but the company my husband
works for paid us a "lump sum fee" to make up SOME of the difference. We
still took a loss on the sale though.

We have always "made" money on corporate moves but not this time.

Good luck to you!

[Goodpasture]

She is in Florida?

The Relo company wants two values. One is a quick sale value and one is a normal marketing time value. If the company is requiring quick sale (90-120 days) and the typical marketing time at this point is in the 200+ range, then they are offering what they feel they can get for it without having to maintain a house for a year.

If she feels she can do better on her own, have her do it. I doubt she can, but she can try.