Technology TransactionsHomeowning Employees Are More Expensive to Transfer
An Opportunity for the Realtor?
The average cost to relocate a homeowning current employee and a homeowning
new hire are greater than the costs of relocating an employee who rents,
according to research performed by the Employee
Relocation Council.
That means there is an opportunity for the enterprising Realtor. If you can
show the HR manager of a relocating company how you can make her/his life
easier and save the company time and money - you will be given the names of
the transfering families. All you have to do is ask.
According to its 1998 membership survey, 71 percent of ERC members offer
third party (TP) home sale assistance. This remains the most common primary
form of home sale assistance. Roughly one in 10 organizations (8 percent)
operates an in-house purchase (IHP) program. The remaining organizations either
offer a direct reimbursement (DR) or guarantee-against-loss (GAL) program or do
not offer home sale assistance.
Company Costs
The 1997 average costs to relocate a homeowning current employee and a
homeowning new hire were $51,930 and $37,835, respectively. Compared to figures
for 1996, homeowner relocation costs for current employees increased 8 percent,
while those for new hires increased less than 1 percent.
The 1997 average cost to relocate a renting current employee was $14,210;
the corresponding cost for a new hire renter was $10,390. Compared to figures
for 1996, renter relocation costs for current employees increased 4 percent,
while those for new hires increased 6 percent.
According to the ERC, the majority of company respondents expect costs to
remain the same in 1998 as in 1997 for all categories of relocating employees,.
Approximately 65 percent of organizations expect no change in costs for
renters; roughly one-half anticipate no change in costs for homeowners.
Of respondents who project a change in costs, most expect an increase by
year-end 1998. Reasons frequently cited for projected cost increases: inflation
, cost-of-living increases, policy revisions, corporate reorganizations and
mergers, tight labor market, and appreciating real estate markets.
For 1997, shipping household goods was the most expensive form of surveyed
assistance, averaging $7,311. Following close behind: federal tax liability
($7,185), and home purchase closing costs ($6,358). Travel and lodging at the
time of the move ranked as the least costly form of surveyed assistance,
averaging $1,205 (Averages based on transferees who actually received
assistance.).
Among current employees, the type of assistance available in 1997 averaged
as follows:
Cost Shipping of Household Goods -$7,311
Federal Tax Liability - $7,185
Purchase Closing Costs - $6,358
Bonuses/incentives given for employee-generated homesales - $4,119
Miscellaneous expense allowance - $4,108
Temporary living at new location - $3,680
Duplicate housing costs - $2,596
Homefinding trips - $1,702
Spouse employment assistance - $1,319
Travel and lodging expenses at the time of move - $1,205
*Averages based on transferees who actually received assistance.
The enterprising Realtor can help a company who is relocating employees by
providing the human resources (HR) manager with a schedule of events which will
save her, the transferee and the company time and money. All you have to do is
contact the company, ask to speak to the HR manager, and make an appointment to
present your services.
If temporary living, homefinding trips, expense allowances, and travel and
lodging expenses are among the highest costs, that is where the Realtor can
provide the best service.
Show the HR manager that you have strategic relationships with a lender,
title company, temporary housing company and that you have those services
bundled to provide quick, streamlined services. (The lender needs to be able to
pre-qualify, not just pre-approve the transferee before they come to town for a
house-hunting excursion. The title company needs to be able to go into gear as
soon as the contract is signed and the lender has supplied the company with all
necessary information for closing.)
Obtain the e-mail of the HR manager and all transfering employees so that
you can e-mail them news and information about your area, and keep in touch
over future plans.
Sign up for the new Real Estate Update newsletter, that you can start
mailing to your new corporate farm.
For more information, please contact the Employee Relocation Council.