If you have accepted a job in a different part of the state, or across the country, you might have to move in a hurry. Some companies only give their employees a few weeks to pack their belongings, move to the new town, and settle.
Considering most homeowners need at least a month to prepare a home for listing and the average house stays on the market for 80 days in 2024, that’s not enough time to effectively sell your house and find a new one.
One option is to work with a relocation company which will buy your house in cash so you can move. This could be a good option if you are in a hurry, but there are some significant drawbacks to working with these agencies. Learn more about the pros and cons of selling a house through a relocation company and how to work with one of these firms.
What is a Relocation Company?
A relocation company is a firm that helps people move from one place to another. Relocation companies are frequently hired by organizations that hire employees from across the country.
If a company offers a job to a candidate or current employee who doesn’t live near its office location, the organization can either ask the worker to cover their own relocation costs or pay these costs through a relocation package. Relocation packages are considered perks of the job and incentives for taking the position.
On average, it costs companies $97,000 to relocate a current employee who is a homeowner. It costs $24,000 on average to relocate employees who are renters. You can see how the cost of selling a home and helping an employee purchase another one significantly increases the costs of relocation compared to simply ending a rental contract.
Relocation companies offer a variety of services and packages depending on what the company is willing to pay. The relocation company you use can help with moving coordination, selling your home, and purchasing a new one. Some relocation companies are more hands-on than others, which means you will get greater assistance.
How Does a Relocation Company Sell Your Home?
Relocation companies use one of two ways to sell your home. Depending on the company your employer uses, you might get to choose the best option based on your needs. Some relocation companies only offer one option, which can affect your home sale timeline. Here are the choices you have.
Cash Buyout
In this option, the relocation company will make a cash offer for your house and purchase it from you. This allows you to sell the property immediately and move to your new location. The main benefit of this choice is that you’re guaranteed to sell your house and can complete the real estate transaction quickly.
The main drawback of a buyout is that you might not get the desired price you want for your property. It is in the relocation company’s best interest to offer you a low price for your home. After the agency purchases your house and you move out, it will resell the property and try to turn a profit.
The lower the price you accept and the higher the resale of the house, the more money the relocation company makes.
Traditional Listing
The relocation company you work with might allow you to work with a real estate agent to list your house. The real estate agent acts on your behalf and goes through the relocation company so you don’t have to manage the home sale. There will be traditional showings for your house and negotiations on the price.
The main benefit of this option is you can get an ideal price for your home. However, using a traditional real estate agent will be slower and potentially more labor-intensive. Your house might stay on the market for longer than you want and buyers might offer contingencies that you need to work around.
For example, if a buyer makes an offer that is contingent on you replacing the HVAC system, you and your agent might have to work with a contractor to get that project done. it can be hard to manage a listing when you are trying to settle into a new neighborhood.
Evaluate the options offered by your relocation company to choose the best way to sell your house. Consider what the home’s listing price will be and your current financial picture. Also, evaluate the relocation package offered by your employer.
Advantages of Selling a House Through a Relocation Company
Relocation is a popular perk offered by organizations that want to recruit employees or promote them.
There are several benefits of working with a relo company if you need to sell your house as part of your career advancement.
Efficiency and Speed
Relocation companies can speed up the moving process. If you only have a few weeks to get to a new city, these firms can quickly purchase your home or list it while helping you move your things.
Relo companies work with moving firms and real estate agents throughout the week and are experienced in getting people from one place to another. They are particularly valuable if you don’t have a lot of moving experience. Don’t get overwhelmed and focus on your job relocation instead.
Financial Benefits
If your company is covering the cost of the relocation company, you can save a lot of money on the move. You might not have to hire movers and likely won’t have to make costly repairs and upgrades before you sell your house.
There is also a chance that you don’t have to pay closing costs or your Realtor’s commission if you opt for the cash buyout. Read the fine print of any relo company agreement to make sure you’re benefiting financially from the move.
Expert Support
Selling a home is so stressful that 36% of homeowners cry before the closing date. Listing your house requires extensive repairs, planning, decluttering, showings, and negotiations. Sellers also need to trust that their buyers are qualified and can get financing to close the deal.
Once a home is sold, the owner packs up their belongings and moves to the new location, where they start the equally stressful buying process. This comes with a new set of negotiations and you could potentially live in temporary housing until you have access to your new home.
Relo companies offer expert support that can overcome these hurdles so you can focus on packing up your things and finding a new house that you love. They can take care of all the stressful parts that make moving exhausting.
Disadvantages of Selling a House Through a Relocation Company
There are a few reasons why you might not want to work with a relocation company to sell your house and buy your next one. Here are a few drawbacks to keep in mind.
Cost Implications
While some people enjoy financial benefits from working with one of these firms, you could lose money on the sale through a buyout. The relocation company might offer a lower price than you think your home is worth.
To avoid losing money, consider paying for a home appraisal before you start meeting with relocation companies. This will give you an idea of what your home is worth in the current market. If you get lowballed by the firm, you might decide to work with a real estate agent instead.
Make sure you review all of the costs, commissions, and fees that you will pay through any property sale option to ensure you make the best possible choice for your finances.
Limited Control
When you hand over control over the sale of your house to a relocation company, you no longer have input over the offers, contingencies, and closing date. While your main goal might be to move quickly, you might not be ready to give up total control of the sale process.
You also might have to work with preselected moving companies and stay in their chosen temporary housing options. Some people enjoy having all of these things planned for them, while others feel stressed if the services don’t meet their needs.
Market Value Concerns
Even if you work with a real estate agent selected by the relocation company instead of opting for a buyout, you might still get a lower price on the sale of your home. This is because the Realtor is going to price the house to sell quickly. The agent might feel pressure to perform from the company, especially if they want to be hired by the organization again in the future.
As a result, your house might be listed for lower than you want or the Realtor might recommend accepting lower offers than you feel comfortable with.
What Homebuyers Should Know Before Buying from a Relocation Company
If you are looking to buy a house, you may come across a relocation property. There are benefits and drawbacks to making an offer on one of these homes. The main benefit is that you could get a deal on the price because the relocation company wants to sell the house fast.
The longer the relocation company holds on to the property, the more they have to pay in taxes, insurance, and utilities. These firms are looking to flip the house fast, so they might price the relocation property aggressively.
Despite the competitive market value of the listing, there are some drawbacks to buying a relocation property. Many people who work for relocation companies only respond during standard business hours.
Your real estate agent might have a hard time contacting the owner in the evenings and on weekends. Additionally, these houses are usually sold as is. You won’t be able to negotiate for repairs or upgrades with the homeowner. Even negotiating down the price might be difficult.
Because you are purchasing a house through a company, not from an individual, the real estate transactions might be slower. It could take a couple more weeks for you to reach your closing date.
However, if you have a flexible timeline and you find a house that is in good condition, it might be worth the wait to move into a relocation property.
Alternatives to Selling a House Through a Relocation Company
Many organizations work with a dedicated relo company when they move employees to different locations. Fortunately, you might be able to consider other options for selling your home. Here are a few ways to list your property.
- Hire Your Own Realtor. Experienced real estate agents will understand that you are working on a tight deadline and want to sell the house fast. They will do their best to make sure you get competitive offers. Use FastExpert to find a qualified Realtor near you.
- Look into iBuyers. Cash-for-homes companies and online buyers will make offers on your home within 24 hours. This could be a more affordable alternative to working with a relocation company.
- For Sale By Owner (FSBO). If you can take your time with the sale and have the ability to represent yourself, look into FSBO options.
- Keep the Property as an Investment. If you can secure another mortgage or buy a new house with cash, consider holding on to your current property. You might be able to rent out the home and use it as an investment for the future.
Each of these options comes with benefits and drawbacks, including your ability to make money and sell your home quickly. Knowing your options can help you make the best possible decision before you travel to your new location.
Know Your Relocation Company Real Estate Options
Not everyone can choose the relocation company they work with, especially if your employer is taking care of all the details for you. If you are able to choose your relo company, make sure they have multiple home sale options.
Decide whether a buyout or traditional listing is best for your needs. You can also stick with a traditional moving service and work with real estate agents instead of getting a relocation company involved.
To find experienced Realtors who understand the real estate market, turn to FastExpert. You can read agent profiles and hire a Realtor who understands your relocation timeline. They can help you move quickly while still getting a fair price for your house.