Buying a home from a relocation company: What to expect

When an organization needs to relocate an employee quickly, they frequently turn to a relocation company to handle everything from finding a new place for that person to live to selling their current home. The home will usually be sold as quickly as possible, and this can create advantages for the buyer, though there are possible drawbacks to consider as well.

Here we explore how relocation sales work, the potential benefits and drawbacks, and help you consider whether this kind of home fits your needs.

What is a relocation company and how does it handle real estate?

When it comes to real estate, you can think of a relocation company as a middleman brought in by companies to help one of their employees sell their home quickly and without hassles. They usually manage every detail of the sale, so the employee is free to concentrate on their new role in a different location.

This often means that the relocation company is on a tight schedule to complete a sale. To do it, they:

• Market the home: They arrange for things like photography, brochures, staging, and listing services, like the MLS.
• Manage showings: The relocation company works with real estate agents to offer showings and open houses.
• Negotiate offers: They field and negotiate offers, often prioritizing speed and streamlined deals over maximizing price.
• Close the deal: Again, often timelines are compressed, and the relocation company will want a short escrow and fast close.

For some buyers, this emphasis on a speedy, no-hassle sale can mean scoring a great deal. For others it can mean not getting to fully vet the home they’re buying.

How does buying a house from a relocation company work?

Buying from a relocation company can be different from a traditional deal with an owner and their agent. So, it’s important to know what to expect.

Who owns the home?

Generally, relocation company homes are still owned by the employee who was transferred and needs to move quickly. They may even need to relocate to another state. Here, the relocation company is merely the middleman handling the sale.

Sometimes, the relocation company has already bought the home from the employee and is the legal owner. In this case, you are buying the home from that company.

What’s difference from a traditional home sale?

A lot of the process for buying a home from a relocation company is like other real estate transactions. But there are key and substantial differences, such as limited negotiations, accelerated timelines, the likelihood of an “as is” sale condition, and sometimes more paperwork. Let’s look at the specifics.

Step-by-step process of buying from a relocation company

1. An employee is transferred for work.
   A corporate employee who owns a home is relocated to another city, state, or country and needs to take steps to move, including selling their home. But, because of short notice and a quick transition, they don’t have time to do it themselves.
   
   
2. The employer brings in a relocation company.
   A relocation company steps in to expedite the sale of the home, minimizing stress for the employee and minimizing downtime in the transition.
   
   
3. The home is listed.
   Whether the home is still the property of the employee or not, the relocation firm lists the property for sale.
   
   
4. The buyer views the home and makes an offer.
   You view the home and make an offer through your real estate agent. Your offer is made to the relocation company, not an owner’s real estate agent.
   
   
5. The relocation company reviews the offer.
   You should expect firm terms since most relocation companies are interested in a fast, uncomplicated sale.
   
   
6. Earnest money is deposited, and disclosures are reviewed.
   Once your offer is accepted, you’ll receive any disclosures about the property and need to deposit earnest money , as this shows the buyer you are serious and committed. This money will get applied to your down payment or closing costs later.
   
   
7. The home inspection happens.
   You can order a home inspection, but don’t expect to negotiate repairs or the price based on faults found. Relocation homes are typically sold “as is.” An inspection is still a good idea so you know the state of the home and any repairs needed.
   
   
8. The mortgage approval and appraisal follow.
   While the process of getting a mortgage approval is standard, with a relocation company real estate sale, the timelines might be compressed to 30 days or less.

9. The buyer closes on the home.
   Once everything is approved and ready, closing on the house is finalized through a relocation agent or title company. You’ll sign a lot of papers and pay any outstanding costs, and then you’ll get the keys to your home.

Pros of buying a relocation property

Buying a relocation property can come with advantages. Here are a few common ones:

• Motivated seller and faster closing: Relocation companies want a quick return on their investment and know the real estate market well, so you’ll usually get a fair price and a fast sale with few hassles or negotiations.
• Potential for lower price: Because relocation companies are in it for a fast turnaround, you might be able to snag a good deal.
• Less emotional involvement: You’re dealing with a company that does not have years of memories tied up in the home, so you’ll probably avoid a lot of the typical back-and-forth over personal details. This can speed up the deal and allow you to concentrate on the major items that matter.
• Perks like furnished homes or closing-cost help: Some relocation packages include extras to entice buyers and expedite a sale. You might score some nice furniture or discounted closing costs.

Cons of buying a relocation property

While the pros are attractive, there can also be problems with buying a house from a relocation company. Here are a few you should prepare for:

• Limited flexibility on terms: To streamline the process, relocation companies often have preset contracts with strict terms. Ironically, this can also result in more paperwork since these companies often attach extra riders and disclaimers to protect themselves. Use your own real estate agent or lawyer to ensure you understand the contracts.
• Often sold “as is”: These companies usually don’t want to get bogged down with contingencies or negotiations about needed repairs. Get a thorough home inspection and budget for any repairs the home needs.
• Narrow inventory: If you want to find a hideaway in a remote part of a state or want to view many homes for sale in an area, relocation homes might not be on the menu. These tend to be in specific markets and have low volume.
• Quick decision windows: Relocation companies do not want to hold properties or assist in sales for long. Be prepared to view and make an offer fast if you want to land one of these homes. It’s also a good idea to get preapproved for a loan so the company knows you’re qualified and serious.

When to consider buying a relocation property

As with most things, the decision to buy a relocation property comes down to whether it fits your needs, goals, and lifestyle. These properties might be a good fit for people who are themselves relocating for work and are on a strict timeline to find a home. They work for any buyers who want a fast, no-hassle sale and aren’t interested in protracted negotiations about contingencies. All-cash buyers and investors on the hunt for deals might also like relocation properties.

There are some buyers these properties might not be right for, of course. If you’re a first-time buyer who wants to negotiate repairs or upgrades, rather than paying for them yourself, relocation properties might not be a good fit. If buying a home “as is” worries you, or if you don’t like making big decisions quickly, these properties may not be a match.

How to prepare for a relocation home purchase

By now, you’ve probably picked up on a theme in this article: prepare for a condensed buying process that moves fast. Here’s how to set yourself up for success:

• Get preapproved early. Getting preapproved does many things. It tells you exactly how much home you can comfortably afford and what your monthly payments will be. It also demonstrates to the relocation company that you are qualified and serious about buying the home. This is very important to them.
• Find a real estate agent with relocation experience. Nothing substitutes for experience, especially when a deal moves fast, with no time for learning on the go. A knowledgeable real estate agent can save you time, stress, and money.
• Review ‘as is’ clauses carefully. Because relocation property deals often have very limited negotiations, you want to know exactly what you’re buying and what you are agreeing to.
• Understand the company’s timeline and offer procedures. Because these companies often have strict timelines for when things can happen, you’ll want to make sure you understand these thoroughly. You don’t want to lose a house you’re very interested in because you didn’t know about a deadline.

FAQ

Are relocation homes priced below market?

Sometimes, but not always. While relocation companies want fast sales and therefore usually don’t overprice homes, they also know the market well and often set a fair price.

Can I negotiate when buying from a relocation company?

Negotiations are usually limited since these can slow down the deal, which is exactly what the relocation company doesn’t want. Your leverage will come in concessions that expedite the process, like closing cost help or appliance and furniture inclusion.

What does ‘relocation sale’ mean on a listing?

It means that the sale is being negotiated by a relocation company either on behalf of themselves or an employee who had to relocate quickly. It also means they have their own procedures and timelines for a sale.

Is a relocation sale risky for buyers?

It can be if you don’t do your due diligence. This is why it’s important to get a professional home inspection and use a real estate agent or attorney to review all contracts and paperwork. You need to know exactly what you are buying and signing.

Do I need a real estate agent to buy a relocation home?

It’s highly advisable to have one well-versed in relocation home or corporate relocation sales.

The bottom line: Relocation homes can be great for the right buyer

Buying a home from a relocation company is not right for everyone. But if you’re prepared and diligent and can make quick decisions on a compressed timeline, buying a relocation property could offer savings and a streamlined, no-hassle process.

Because of the added paperwork, strict timeline, and typical “as is” nature of these sales, it’s important to work with a real estate agent experienced in these sales.

A great place to start your search for the right relocation property is with a Rocket Mortgage relocation expert.