The Comprehensive Home Sale Experience: Emerging Stronger
after the Recession

As we move toward the close of 2009, many will look back at the year and say that this was a time in which companies began to view the home sale process in a new and different way. With the economic downturn, and the real estate decline throughout the U.S. and the world, many organizations were faced with significant challenges.

During Primacy’s 2009 Primacy Leadership Advisory Network meeting, two sessions explored the new dynamics of the home sale process in the form of a roundtable and client panel. In both sessions, it was clear that 2009 was a year of challenges to nearly every home sale program, punctuated by changes implemented to address the concerns of the transferring employee and organization as a whole.

The initial topic discussed during the client roundtable focused on the various hurdles organizations face as they move employees owning homes back to the origin location. Following is the list of challenges identified during the discussion, most of which have been felt by the majority of participants:

• Managing transferee expectations
• Cost containment
• Real estate market decline
• Managing policies
1. Consistency (or lack of consistency)
2. Competitiveness
3. Timeliness
4. Benefits removal
• Managing exceptions
• “Water cooler” talk
• Required internal education
• Understanding and visibility of cost
• Non-disclosure of issues by the candidate (ex. negative equity)
• Reluctance to relocate
• Creative solutions (not capturing “true” relocation costs)
• Negative equity

Panelists then addressed the types of changes organizations are making to manage these concerns and to facilitate effective relocations. The list of changes was lengthy, as many companies have explored innovative ways to account for these challenges, but the most frequently quoted items included:

• Created matrix for cost of relocations (to assist in gaining buy-in)
• Increased exceptions (added flexibility)
• Added lump sum (replacing home sale benefits)
• Increased temporary housing
• Added pre-assessment/candidate services
• Increased benefits for executive levels
• Changed/Added selling incentives
• Added listing parameters
• Added Loss-on-Sale benefits
• Reduced the number of home sale authorizations
• Created guidelines vs. policies for added flexibility
• Used staging to help sell homes
• Changed inspection process to major components

While many of these changes have recently been implemented, the next discussion topic analyzed the impact these changes had on the success of the move. With this in mind, the question to the group was, “Which of the changes you have made had the greatest impact on the success of the relocation process?” The answers varied, with several successful changes being implemented by a number of the organizations in attendance, including:

• Front-loaded homeowner benefits and incentives
• Added marketing allowance (“spruce up”)
• Delayed guaranteed buy-outs and added sunset clauses
• Added candidate services
• Added pre-appraisal as a tool (understanding the financial impact upfront for transferees and their business unit)
• Changed inspection process to major components only
• Added/Changed home sale bonus (more aggressive)
• Added incent to rent (if not using homeowner benefits)
• Added loss on sale
• Reported quarterly to business units handling recruiting

While organizations continue to deal with these challenges, it is obvious that many are looking toward the future with a much more positive outlook. While the home sale process may not mirror those prior to the economic and real estate challenges, it is apparent that organizations are still investing in the relocation of employees in order to remain successful in their industries.