Selling Your House for Job Relocation in 2021: Is a Guaranteed Home Buyout Program a Good Option?
Even though the information on this web page is provided by a qualified industry expert, it should not be considered as legal, tax, financial or investment advice. Since every individual’s situation is unique, a qualified professional should be consulted before making financial decisions.
From this article you will learn about three ways to sell your house for job relocation. First, we will discuss guaranteed home buyout programs, and then offer you two alternatives.
We will go over the pros and cons of each option, so that you will be able to make the best choice.
Keep reading to decide on what works best in your situation.
Note: you may also be interested in reading our article Selling Your House Fast when You Need to Move Out of State or Abroad.
Guaranteed Home Buyout Programs
What Is a Guaranteed Buyout Offer (GBO)?
A Guaranteed Home Buyout Offer (GBO) means that the company who is making it promises to buy the property from the homeowner when certain conditions are met. The purchase happens either initially or if the house isn’t sold after a certain amount of time starting from listing it for sale.
A guaranteed home buyout can be offered either by an employer, when selling a house for job relocation, or by a relocation company to clients moving homes for any reason.
Sometimes, however, this term is used as a marketing gimmick by real estate agents or brokerages—a phrase by using which they try to catch their potential client’s attention. In this case, an agent doesn’t even have as their goal signing you up for the program. They just want to have you contact them and then talk you into hiring them for regular agent’s services.
Specifically they use this phrase to demonstrate that they are confident in their ability to sell your house fast—”if we can’t sell your home in a month, we will buy it”. Of course, they don’t specify for how much and on what terms.
How Do Guaranteed Home Buyouts Work?
There are three common ways of how a guaranteed buyout offer can work.
The first one is when your employer or relocation company assesses your property’s value and buys your house right away. When the house is bought for a fair market price (which doesn’t always happen), one or two independent appraisals are done to determine the market value of the property.
The second way requires you or the GBO provider to list the property for sale in a traditional way. If the house doesn’t sell by a specified date, the company buys it from you.
The last method involves you listing the house for sale “by owner” or with a realtor’s help. When you find a buyer, the company finishes the selling process for you. They handle the remaining procedures required to transfer the ownership of the property from you to the buyer.
Advantages of a Accepting a Guaranteed Buyout Offer
In the first two cases, a guaranteed home buyout means that you are confident that you will sell the house within a limited amount of time and move to the new place as soon as possible.
The third option doesn’t offer you as much certainty regarding the time frame, but it does help you speed the process up significantly: when selling a house, finding a buyer is only half of work. The other half is waiting through their mortgage approval (that can last up to a month), going through inspections, and other details of the buyer’s due diligence procedures.
Disadvantages of Accepting a Guaranteed Buyout Offer
Not every company that offers you a guaranteed home buyout program has as their only goal helping you relocate fast and cheap. More often than not, a GBO comes with a below market value offer for your property: the company will need to resell your house afterwards, and they want to make sure they will do it at a profit.
While the agreement can stipulate “fair market value” and involve two independent appraisers to determine it, the contract can also contain hidden fees and other conditions reducing the amount of money you will get in the end. Be diligent when reviewing the agreement, whether it’s offered by your employer, relocation company, or a realtor.
When a guaranteed home buyout option is offered by your employer, keep in mind another interesting stipulation to check your contract for. There may be a number of restrictions dictating what kind of property you are allowed to buy after you relocate.
For example, your employer will not want you to buy a house with too much land coming with it. Or they will not be happy if you choose a manufactured house. If you want to save by buying a fixer-upper and renovating it, this may not be an option either. As well as if you aren’t scared by hidden asbestos or mold problems.
The reason for these restrictions is that your employer is trying to protect themselves in case you will need to be relocated again in future. If this happens, they will have to buy your house and resell it again. And they don’t want you to buy a home that will be difficult for them to sell afterwards.
Depending on your situation and the conditions of the guaranteed home buyout offer, the amount of work you have to do to sell your house can still be too high. If you need to sell your house really fast and relocate now, because the employer doesn’t wait, not every GBO program from a relocation company will be a good option.
How to Get a Guaranteed Home Buyout Offer?
If a guaranteed home buyout option is something that interests you, first of all, ask your employer if they offer it. You can also get one from a relocation company—shop around and study the conditions each available company offers.
As noted above, even some realtors can offer it to show that they are confident in their ability to sell your house fast. However, we don’t recommend you to take this offer seriously in this case.
Regardless of whose GBO you are considering, be very attentive when reading the contract.
Selling Your House to a Real Estate Investor
Who Are Real Estate Investors?
Real estate investors are entrepreneurs who buy properties to turn them into profit. A real estate investor can either be an individual or a company. They are looking for good deals on homes that they will be able to either resell later for a higher price or turn into rentals.
It’s common for investors to purchase homes from owners having an urgency in selling their property and/or who are having a difficulty in selling the house because it has problems attached to it.
If you want to learn more about how real estate investors work, you can also read our in-depth guide How to Sell Your House to a Real Estate Investor the Right Way. And here, let’s make an overview of how this course of action works for you as a homeowner.
How Does Selling a Home to a Real Estate Investor Work?
Normally, an investor needs one walkaround to estimate the value of your property. After that, they make you an offer, either on the spot or in one or two days after the appointment.
If you accept the offer, you will sign a purchase contract, which is followed by the closing.
If the property doesn’t have legal problems attached, such as mortgage foreclosure, property tax debt, disagreeable co-owners, etc., the whole selling process can take just about a week or two.
Advantages of Selling Your House to a Real Estate Investor
Real estate investors work fast. A normal home sale to an investor takes about a week.
Real estate investors buy houses “as is”—in their current condition, no matter how bad it is. For them, a run down house means a good investment opportunity with a room for adding value and getting more profit from reselling the home. Unlike a real estate agent or a person looking for a home to live in, an investor will not ask you to spend time and money upfront for repairs.
Investors don’t need to go through a regular mortgage approval process. They either have cash, a private source of credit capital, or a “hard money” lender who issues financing within about a day. This prevents you from waiting for weeks for your buyer to get financing, and in the worst case, from the deal falling through if the buyer doesn’t qualify for a mortgage at all.
Selling your house to a real estate investor will not require you to market it. If you want to sell it to them, they are willing to buy. One quick visit to estimate your home value is enough for them to decide how much they are willing to pay for your property. Therefore, you don’t have any upfront expenses for home staging, photography, yard signs, ads, and others.
Investors don’t work with real estate agents and don’t require you to pay realtor commissions. Most investors also advertise taking all responsibility for all of the closing costs. So, unlike in a traditional sale, the amount you are offered in the agreement is what you get at the closing and walk away with.
Disadvantages of Selling Your House to a Real Estate Investor
While an investor will buy any property and ASAP, the price they will offer for it, will be lower than the home’s market value. Here is how they usually determine how much to offer to the homeowner:
First, they calculate how much your property will cost after doing all improvements and repairs necessary to put it in the marketing condition. They multiply this by 70% and subtract the estimated repair expenses from this amount. The figure obtained as a result of these calculations is what an investor usually offers to the homeowner.
How to Find a Real Estate Investor to Sell My Home?
Begin with an internet search. Make several searches with different wording and include your location in the search. Try, “we buy ugly houses in [your city, state]”, or “sell my house fast in [your city, state]”, or “[your city, state] cash house buyers”.
Next, you will need to investigate all the names you find. Check their websites, if they have one. Look for experienced and professional real estate investors and stay away from newbies.
Look outside of their site for reviews. Check the Better Business Bureau for complaints. Then, interview several of the best investors you find to learn about their process, costs, and their quote for your property.
The largest and most trusted platform for off-market property sales is HouseCashin. Each investor on the HouseCashin platform has been carefully checked out for their reliability, integrity, and transparency. We have helped many relocating property owners sell properties quickly by matching them up with reputable investors.
After contacting us through our convenient Request a Fair Cash Offer online form or by phone, we put you together with one or more legitimate investors in your area. Once they have reviewed your information, and possibly visited your property, you will receive cash offers to consider as quickly as within 24 hours.
Let the experts at HouseCashin save you time and unnecessary stress by performing your search for you and lining up the best prospective buyers for your home.
When Is Selling My House to a Real Estate Investor the Best Option?
Generally, selling your house to an investor is the best option when:
- you don’t have time to market and sell it traditionally
- you don’t have money for out-of-pocket expenses necessary to sell it traditionally
Selling to a real estate investor can be a good option if you need to sell your home quickly. This can be particularly helpful to people who are suddenly relocating to another city or country for work.
If the property you are selling is a rental home, you can sell it to an investor without removing your tenants. They can stay through their lease and won’t be disturbed by multiple prospective buyers visiting the property and conducting inspections before deciding whether or not to make an offer.
For a homeowner who is selling a house in poor condition, there are investors who will buy the property as-is so you won’t have to come up with the cash for repairs while being on a tight schedule.
If your area has undergone sudden changes that make selling your house more difficult, real estate investors are always looking for affordable property deals in such areas.
Selling Your House Traditionally
The most common way to sell your property is to sell it to someone who is looking for a home. Most people do it by hiring a real estate agent.
Of course, there is an option to sell the property without the agent’s help. But assuming that you are limited in time, this might not be a good idea. Unless you already have someone ready to buy your property such as an investor, the agent will help you sell it significantly faster. An agent will save your time in finding a buyer, as well as processing the legalities of a real estate transaction.
So, in this section, we will discuss how selling your house with an agent works. To understand what the process would look like if you decided to skip hiring a realtor and to sell the house “by owner”, just imagine that you have to do all the agent’s work described below yourself.
Who Are Real Estate Agents?
Real estate agents, also called realtors, are middlemen who offer their help in selling (also buying or renting) a property for a fee. They are knowledgeable about how real estate transactions work, how to market properties, and about their local real estate market.
How Does Selling the Home Traditionally Work?
Before hiring a real estate agent to sell your property, you will have an appointment with them. During the appointment, the agent will evaluate your property’s condition, approximate market value, and what needs to be done to sell the house for the highest possible price and within a reasonable amount of time.
When you agree to hire the agent, you will sign a contract (listing agreement) with them. In some cases you will be asked to sign an exclusive agreement, meaning that you are not allowed to work with any other real estate agent to sell the same property.
The main points that the contract will stipulate are:
- the realtor fee (percentage from the final selling price)
- contract expiration date
- the agent’s responsibilities
After signing the contract, the agent will either start the marketing process or oversee the preparations that need to be done before marketing. Such preparations are usually repairs and renovations, home staging, and photography.
When the property is ready to be advertised, the agent will list it to your local MLS (the database of properties for sale accessible to buyer’s agents), as well as to other websites where people look for properties to buy. Your realtor will also take care of other advertising methods such as installing “home for sale” yard signs, print advertising, and other methods.
You will likely be getting multiple offers from different prospective buyers. Your realtor will negotiate with them and their agents and conduct showings. One of the most popular ways among realtors to find a buyer is to hold an open house—a publicly advertised event when multiple people visit your property on the same day.
After getting an offer you are happy with, the realtor will take care of all legalities to complete the transaction. This includes but not limited to:
- being present during home inspections the buyer may request
- handling and negotiating the buyer’s repair requests
- helping the buyer to qualify for a mortgage loan
- coordinating the earnest money payment
- communicating with the title company during the title search
- conducting the closing
At the closing, the agent is paid their commission you previously agreed on. It’s subtracted from the selling price, as well as other closing costs.
Advantages of Selling Your House Traditionally
When selling your house to a future homeowner, you have a chance to find someone willing to pay the market price for it. If you are in sellers’ real estate market, and you or your realtor are good at negotiating, there is even a chance to get a higher offer than the asking price.
Particularly, if you opt for using a real estate agent, they will help you with setting an optimal asking price to help your house sell sooner and for more. They will also make the whole selling process significantly easier for you.
Disadvantages of Selling Your House Traditionally
Even when using a real estate agent, homes don’t usually sell that fast. It normally takes from two to six months on average to sell a house traditionally. In the worst cases a house can sit on the market forever.
Most home buyers look for a property in good condition. Depending on the condition of your property, your agent will or will not ask you to do repairs or renovations. Many agents don’t even list a house until the most important problems with the property are resolved. Note that repairs take time and require an upfront investment from you.
There are also other marketing measures popular among real estate agents such as real estate photography and home staging. They also require out-of-pocket expenses from the homeowner.
Even if you find a buyer quickly, they will need to take their time for the buyer’s due diligence period. Unless they are buying the property for cash (which happens rarely), they will need to get approved for a mortgage. In some situations this can take up to a month. And in others, the buyer doesn’t qualify at all, the deal falls through, and the seller has to start looking for a new buyer.
During the marketing process, the property likely has to be shown to multiple potential buyers. This may be inconvenient for you if it’s still your residence.
A traditional sale normally comes with surprise costs. When being offered one amount in the agreement, you will get another, lower, amount at closing. This is because of the realtor commission and closing costs such as title insurance fees, escrow service, transfer tax, and others. If you want to get a better understanding of closing costs, read our guide Closing Costs for Home Sellers that provides detailed information on the subject.
How to Find a Real Estate Agent?
If you have acquaintances who have recently used a realtor’s services, ask them if they were happy with the agent’s help. If yes, consider hiring the same realtor.
You can also find a few agents through online search. Try looking up the most reputable real estate companies (brokerages) in your area and consider agents working for them. Look them up on business directories such as Yelp or Google My Business and read reviews left by their clients.
Choose a few candidates that seem to provide the best experience to their clients and interview each. One such directory is our own real estate agents directory on HouseCashin. We have already selected the top-rated realtors throughout the USA who close deals fast and meet our reputation standards.
Ask them to estimate the asking price of your house and compare the numbers each agent will give you. A property’s market value is usually calculated based on the recent sale prices of comparable homes. Most realtors are knowledgeable about their local market, so their numbers should be pretty much the same. Don’t pick candidates whose estimates significantly differ from the majority.
If the time you have before moving is limited, it’s important to find an agent who is able to sell your property fast. Find their past listings on websites like Zillow or Trulia and look at how quickly they were closed on. Compare this data across the candidates.
Check how responsive the considered agents are. Try contacting them about their current listings and see how soon they will respond to you. For this purpose, choose the properties with the lowest asking prices. This will help you estimate how hard they will be trying to sell your house. A good agent is very responsive, no matter the property’s price.
When Is Selling the House Traditionally the Best Option?
Overall, a traditional sale with a realtor is a go-to option for people who have about half a year to their relocation date, don’t mind inconveniences that come with showings, and have enough cash to put their property in order before the sale.
If you already have someone who is ready to buy your house as it is, you may skip hiring the real estate agent. But it’s recommended to use a limited realtor or real estate attorney services to get assistance with composing a contract and taking care of other legalities. You want to be assured that you are walking away from the property without any possible liability for its physical condition or other problems.
Types of Relocation Help Offered by the US Employers
If your employer has a written relocation package you should go over it carefully and ask questions. You need to make sure that you take advantage of everything that is available to you. Someone in the Human Resources department should have the responsibility of overseeing the program and can provide answers.
Basic relocation packages usually include moving expenses, including packing materials if you use a professional moving company. Temporary housing in your new location used before moving into your new home should also be included as well as transportation costs.
Sometimes your employer will reimburse you for a trip to the new city to look for your new house and the cost of transporting a vehicle there.
Not typical, but not unheard of either is for your employer to help with your down payment or closing costs on the new home. If you are leasing a home or apartment, you may be eligible for help with any penalties you incur for breaking your lease.
As explained in one of the previous sections, if you are really fortunate, your employer may have a buyout program for your old home. The offer usually requires that the home has been listed for a prescribed period of time before a buyout is available. The amount that the company will pay you may not be top dollar, but it should be a reasonable amount compared to market value.
Oftentimes, major employers have a relationship with a national brokerage firm that specializes in employee relocations. The firm may offer a reduced commission on the sale of your home if they can refer you to one of their offices in your new city for your purchase.
Most financial incentives are negotiable, and that should include relocation assistance. If the package doesn’t address all of your needs, you should ask if they will add other items.