Home Sale Assistance June 2014 Home Sale Assistance programs such as a GBO and BVO continue to be prevalent in U.S. Domestic relocation policies despite the relatively high costs associated with them. In U.S. Domestic relocation policies, Home Sale Assistance provisions often represent the cornerstone of the mobility benefits. The Worldwide ERC 2013 U.S. Transfer Volume and Cost Survey reports that real estate issues continue to be the primary reason that employees are reluctant to move and that company paid home sale assistance costs average more than $44,000 per employee. Despite their high cost, Home Sale Assistance programs remain popular as they ensure that transferring employees are able to relocate in a time frame that meets the needs of the business. Most companies find that they must offer some type of Home Sale Assistance program to meet their recruiting and talent management needs. Home Sale Program Offerings The most common types of Home Sale Assistance programs offered by employers to their relocating employees are: Guaranteed Buyout Offer (GBO) – company makes offer to purchase the employee’s home at an amount determined by two independent relocation appraisals Buyer Value Option (BVO) – after employee finds an outside buyer for home, the company extends an offer to purchase the home from the employee and then subsequently sells it to the outside buyer. Appraisals and a delayed GBO may be offered if an outside buyer is not found within a defined period of time. Direct Reimbursement (DR) – company does not extend an offer to purchase the employee’s home. The employee finds an outside buyer and is reimbursed for approved closing costs after the closing has occurred. Please send feedback or questions to: Jill Taylor, SCRP, SGMS, VP Consulting Services [email protected] or 630-972-2280 Benchmark Findings Brookfield Global Relocation Services (Brookfield GRS) has reviewed and benchmarked the U.S. domestic relocation policies of 35 companies in 2014 with specific focus on the components and guidelines within their Home Sale Assistance provision. Benchmark findings include: 77% of participants provide GBO to one or more policy tiers 20% of participants provide BVO as their only type of Home Sale Assistance 3% of participants provide Direct Reimbursement as their only type of Home Sale Assistance Since the Home Sale Assistance expense generally represents such a large portion of the overall relocation spend, developing policy parameters that will result in a successful and cost efficient Home Sale Assistance program is a top priority. Most companies that offer a GBO have implemented guidelines to contain costs such as allowing employees to accept outside offers that are below the GBO amount and requiring employees to list their home within a certain percentage of the GBO amount or the BMA’s Most Likely Sales Price. Concluding Thoughts Home Sale Assistance programs provide companies with an effective way to meet their business mobility objectives while offering employees vital support during their transition. The complete Home Sale Assistance Benchmark document is available by contacting Brookfield GRS Consulting Services.
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