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.

Published: November 27, 1998

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