When the relocation services contractor acquires the property, a deed transferring the title to the contractor is completed. Upon acquiring the property, the relocation services contractor pays off the mortgage within calendar days of acquisition. In most cases, the relocation services contractor pays off all mortgages or other obligations secured by the residence, except as required by a higher offer transaction.
The relocation services contractor reserves the right to review this provision in the event interest rates rise substantially and result in an adverse cost effect for the relocation services contractor and the IRS. If this should occur, the relocation services contractor will notify the employee in advance.
If the relocation services contractor makes a delinquent mortgage payment, the relocation services contractor bears the cost of any late charges. In addition, the relocation services contractor promptly responds to any adverse credit reports with written mortgage payment indemnification notices. If the employee makes any delinquent mortgage payments, then the employee must bear the cost of any late charges.
Should the offer involve the assumption of the existing mortgage on the property, the employee must sign a written release of liability that protects the relocation services contractor, should the purchaser of the property default in any way on the assumption loan at any time in the future.
The relocation services contractor will not indemnify the employee if the purchaser defaults. The ultimate responsibility for the assumption loan lies with the employee. The employee remains responsible for the mortgage in the event of default by the outside buyer as with any other assumption. The relocation services contractor sends the equity payment via electronic funds transfer or wire transfer, whichever method the employee prefers.
Final equity is reduced if any trash, debris, firewood, paint or chemicals remain in the house after the employee vacates the premises. If the outstanding mortgage balance and any other encumbrances on the property exceed the GHS offer, the employee must remit the difference to the relocation services contractor via electronic funds transfer or wire transfer at the time the employee accepts the GHS offer.
The relocation services contractor estimates the deficit at the time it makes the purchase offer. The relocation services contractor sends any refund upon final computation of the equity within five working days of the acquisition.
If the employee receives Form S for any other reason, the employee should contact the CFO relocation coordinator immediately. The relocation services counselor confirms the signed purchase agreement on the new home by either requesting a copy of it or by contacting the real estate agent. In order to process acquisition of the property, a relocation services counselor will request a certified check for the equity deficit to accompany the acceptance paperwork.
The employee must remit any deficit amount to the relocation services contractor within five working days of the acquisition of the property. The relocation services contractor will not complete the acquisition of the property until it receives the deficit funds owed.
If the employee obtains an independent offer after the acceptance into the home sale assistance program, the employee may take advantage of the following services:.
Under the AZ and AV programs, the employee sells the home to the relocation services contractor who then sells the property to the outside buyer. The difference between these programs is based on where the employee is in the appraisal and offer process.
The benefit to the employee is receiving the equity in the property within five working days after completing the sale with the relocation services contractor if the home is vacant.
This will occur once the buyer has removed any non-allowable contingencies and the relocation services contractor has received all required paperwork. The relocation services contractor completely handles the sale to the outside buyer, so the employee does not have to be present at settlement.
The employee does not have to use their own funds for settlement expenses and then be reimbursed. The employee should contact the relocation services contractor as soon as possible after they find a prospective buyer so that the relocation services contractor can review the offer terms and counsel the employee with negotiations.
The employee should not sign any outside sales contract before notifying the relocation services contractor and discussing the possibility that the outside offer might qualify for one of the programs under the contract. Prior to acceptance for any of the higher offer programs, the relocation services contractor reviews all outside offers in detail.
This sale may occur when the employee receives an acceptable bona fide offer from an outside buyer prior to the completion of the appraisal process conducted through the relocation services contractor. At this point, the employee cannot enter into a contract or sign any agreement document with the outside buyer.
This sale may occur when the employee receives an acceptable bona fide offer from an outside buyer after the relocation services contractor has completed the appraisal process. The relocation services contractor may have also tendered the employee a GHS offer. If the employee is successful in finding an independent buyer willing to pay a net purchase price equal to or greater than the GHS offer, then the employee should not sign any documents including counter-offers or accept earnest money.
The relocation services contractor cannot work with the sale if the employee has done either. The relocation services contractor will ask the employee and his or her agent to submit information relative to the purchase offer and the buyer's qualifications. To determine if it is bona fide and if the buyer is qualified based on the written information submitted. The counselor uses the GHS offer as a benchmark to evaluate the reasonableness of the outside offer price.
For any expenses or concessions that are deemed non-reimbursable under the Federal Travel Regulation. If the offer involves the assumption of the existing mortgage on the property, the employee is required to sign a release of liability that protects the relocation services contractor should the purchaser of the property default in any way on the assumption loan at any time in the future.
The ultimate responsibility of the assumption loan would lie with the employee. Once the relocation services contractor receives and reviews all the required documents and any non-allowable contingencies have been removed, the relocation services counselor will instruct the employee to amend the GHS offer to the value of the independent offer and complete acquisition of the property.
If an employee signs an outside sale contract prior to entering the home sale assistance program or prior to the completion of the appraisal process under the program, the employee may be eligible to use the relocation contractor for closing assistance. Under the closing assistance program, the relocation services contractor manages the sale process and closing with the outside buyer, including disbursing the equity to the employee.
The advantage of this program is that it allows the employee to focus on the move itself and relocating to the new post of duty. The employee remains the seller of record and is responsible for all decisions related to the property. Property management services are programs provided by private companies for a fee that help an employee to manage his or her residence at the old official station as a rental property. The service assists employees who are relocating but have decided to maintain their homes at the old post of duty.
Employees may submit their request to use the relocation services contract for property management once they have received an approved relocation authorization for basic moving expenses.
Before employees can use the relocation services contract for property management, they must complete Form , Request for the Use of Relocation Services Contract, and forward it to the CFO relocation coordinator.
The CFO relocation coordinator will complete and forward the relocation authorization amendment for basic plus moving expenses to the appropriate budget office for approval.
See the chart below for the time-frame for using property management services:. The IRS may pay for property management services outside the contract if employees cannot sell their home at the old official station. The amount the IRS will reimburse the employee for property management services cannot exceed the monthly fee that the IRS would pay under the contract. Employees are responsible for any additional expenses.
Employees must complete Form , Property Management Reimbursement Request, for reimbursement of property management service fees paid to a certified property manager that is not part of the relocation services company.
The employee must attach copies of paid property management service invoices to their voucher. If the IRS pays for property management services on an employee's residence at the old official station and if he or she decides to sell the residence at government expense under the same relocation, the employee will owe the IRS for the property management paid on his or her behalf.
To recover the property management fee, the IRS will reduce the amount paid to the employee for reimbursable home sale expenses. Reimbursement of property management services, whether paid to the employee or the vendor, is taxable income to the employee. The relocation services contractor contacts a local agent to meet with the employee at the property to evaluate the rental value.
The local agent determines rental value by reviewing recent rentals and current available listings along with property and general market conditions. These factors, viewed together, allow the agent to formulate an estimated rental value.
The local agent assists with the rental marketing of the home through the applicable multiple listing services MLS or local newspapers. The relocation services contractor works to secure a qualified tenant and runs a credit check on each prospective tenant to ensure that the tenant is credit worthy and can make the monthly payments. If the relocation services contractor cannot find suitable tenants within a reasonable period usually within two months , the employee may withdraw from the agreement.
The contractor provides a copy of the standard lease to the employee in advance to review. Both the employee and the relocation services contractor approve any major changes to the lease. Please note that state and local regulations may require modification or provisions to be added to some aspects of the lease.
The relocation services contractor acts as a single point of contact for repairs, maintenance or requests by the tenant. The statement reflects income received and expenses incurred and paid for the period, as well as any credit or deficit balance the amount relocation services owes the employee or the amount, if any, owed by the employee to the relocation services contractor.
If a balance is due from the employee, the relocation services contractor expects prompt payment. Before the tenants move in, the property management counselor contacts the employee to arrange the first property inspection. During this first inspection, the inspector records the:. Inventory of items the employee will leave in the property such as appliances and window treatments.
The property management counselor coordinates four property inspections per year to ensure that the home is in good condition. These inspections alternate between complete interior and exterior and exterior-only. In an emergency, the property management counselor and broker immediately inspect the home and contact the employee as soon as an assessment of the condition is prepared. The property management counselor forwards to the employee a full report of all inspections, along with the recommendations, comments and photographs.
The relocation services contractor provides destination services at the new location. The employee may contact the relocation services contractor directly to obtain these free services:. The relocation services contractor provides the employee a home finding kit and refers the employee to a rental agency. Depending on the locale, the rental agent or real estate agent showing rental properties may charge the employee a fee.
The relocation services contractor notifies the employee if there is a charge, prior to placing the employee with that agency. This fee is a non-reimbursable item, which means the employee is responsible for the payment directly to the rental agency should he or she use the service.
The relocation services contractor identifies a qualified real estate agent to provide the employee with an orientation to the area and help the employee locate communities and neighborhoods for the employee to visit during the house-hunting trip.
The relocation services contractor assigns a loan specialist to assist the employee in understanding the types and amounts of loans available in the new area, as well as referring the employee to local sources. A national mortgage lender in the new area will assist the employee in the search of market rate financing. The relocation services contractor provides general information regarding the real estate market, advice on planning a home search, referral to national mortgage lenders and research on family requirements including schools, child care, community life for major cities when available.
The relocation services contractor refers the employee to national mortgage lenders who are available to work with the employee to determine the mortgage amount the employee can afford and to arrange to have a mortgage pre-approved for the employee.
This service is provided at no cost to the employee or the agency. If the employee does not provide his or her selections within this time period, Relocation Services suspends the relocation process until it receives the list from the employee.
Home IRM Part1 1. Part 1. Organization, Finance, and Management Chapter Servicewide Travel Policies and Procedures Section Relocation Services Program. Program Scope and Objective. Director, Travel Management. Updating and maintaining this IRM. Travel Policy and Review. Travel Policy and Review is responsible for: Coordinating contractual services for allowances under the Relocation Services Program.
Relocating Employee. The relocating employee is responsible for: Meeting the prerequisite for the guaranteed home sale marketing period. Receiving approval for using the Relocation Services Program prior to incurring expenses. Business Unit. CFO Relocation Coordinator. The CFO relocation coordinator is responsible for: Counseling and assisting relocating employees with allowances under the Relocation Services Program. Initiating the approved use of the relocation services allowance with the provider.
CFO Relocation Technician. The CFO relocation technician is responsible for: Reviewing and paying relocation services invoices. Processing W-2s for taxable property management reimbursements. Program Management and Review. Open relocation voucher and invoice report. Program Controls. Travel Operations reviews for effectiveness by: Conducting a weekly review of all Relocation Services Program invoices to ensure compliance with prompt payment processing guidelines.
Funding requirements Relocation authorization amendments for basic plus moving expenses must be approved for using the Relocation Services Program. Manual quality invoice Each Relocation Services Program invoice is reviewed with the approved relocation authorization amendment for basic plus moving expenses for accuracy and compliance. Separation of duties Approving officials are responsible for following the delegation order when approving basic plus moving expenses.
CFO relocation coordinators counsel employees and establish relocation authorizations and authorization amendments. The following terms and definitions apply to this program. The following acronyms apply to this program.
Related Resources. General Rules. Employees relocating to non-professional positions when the move is involuntary. Requesting Use of the Relocation Services Program. Employees may use the relocation services if they: Signed a service agreement and disclosure statement. Marketed the home with a qualified broker for the required amount of time. Written Notification of Reporting Date Requirement for Marketing Home 30 days 15 days 60 days 45 days 90 days 75 days days days. Original listing price.
Current listing price. Number of times the price was reduced. Length of time on the market. Residence Eligibility and Title Requirements. Homes that do not comply with state and local codes. Solely in the name of one or more members of the immediate family. Exclusion Clause. Upon execution of a name prospective purchaser and me us of an agreement of sale with respect to the property, the listing agreement shall immediately terminate without obligation on my our part of any named prospective purchaser to either pay a commission or to continue this listing.
Note: Without the clause, the employee will not be able to enroll in the program. Pre-Counseling Services. Pre-counseling services can assist with: Reviewing property and employee eligibility requirements. Explaining the program services available. Providing information that may help avoid decisions that result in out-of-pocket expenses. Exploring both rental and purchase options at the new duty station. Broker's Market Analysis. Home Marketing Assistance. Relocation services counselors are available to help with the process of: Selecting a qualified real estate agent.
Setting a list price. Promoting and advertising the home. Handling the offer negotiation process. Recommending repairs or improvements to enhance salability. Home Sale Assistance Services. The home sale assistance services includes the following programs: GHS Amended value Amended from zero sale Closing assistance only. Receives an independent offer. Accepts a GHS offer from the relocation services contractor. Decides to take the home off of the market and not sell it at the present time.
Obtain an outside buyer, sell the home, close on their own, and file for direct reimbursement. Accept the GHS offer from the relocation services contractor. Allow the GHS offer to expire at the end of the calendar day offer acceptance period.
Guaranteed Home Sale Program. Choosing an Appraiser. The requirements for an appraiser: The appraiser has no financial interest in the property. The appraiser has not appraised the property within the previous six months. The appraiser is not designated as the listing real estate broker. Appraisal Process. The appraiser considers the following factors when preparing the report: Overall market conditions, including economic Supply and demand of available housing Available financing and terms Property assessments Zoning School district.
Neighborhood Proximity to services and schools Location Interior and exterior condition Decorating Functional appeal and other factors listed in the WERC appraisal guidelines Home size. Relocation Services Contractor's Appraisal Review. Here is an overview of the most common relocation home sale programs. This is perhaps the easiest home sale program to explain, because it simply means that the employee is responsible for the sale of his or her home, and is then reimbursed for the costs associated with that sale.
The issue with this program, is that the reimbursed expenses are viewed as taxable income by the IRS. This program mitigates the tax liability of the direct reimbursement program. It allows the employee to list and market the home until an offer is received on the property. Then, the Relocation Management Company RMC purchases the property from the employee based on the sales contract amount, and in turn sells it to the ultimate buyer.
So, with the BVO program there are actually two distinct sales that take place for the property. However, if the sale falls through for any reason, there is the risk of the home being taken into inventory, which can be costly.
With the AVO program, the employee normally has a set timeframe in which to find a buyer for the property. A relocation counselor should know if the GBO will put the transferee in a deficit situation by asking about their mortgage balance during the initial call or seeing the balance noted on their title report. A deficit would require the transferee to send money to the relocation company prior to the acquisition of their home if they were to accept the GBO.
This factor can make-or-break a phone call, so the presentation of the GBO to the transferee is vitally important. Before delivering their GBO, I find it important to reiterate the purpose of a relocation appraisal.
Most commonly the appraisers appoint a listing price for the home with an expectation to sell within a day marketing period. It would be ideal for a transferee to sell their home on the open market to a buyer for a price higher than their GBO. I also review what is done if an offer arrives that is greater than their GBO. This ensures that the transferee is aware of all options to attract the highest offer on their home.
This is most successful when the client has established GBO requirements. If these requirements exist, then a client can reduce the need to take a home into inventory. Skip to content. How does a Guaranteed Buyout Option work? Do relocation companies buy houses? What are the advantage of using a Guaranteed Buyout Option? ARC is considered an industry leader for guaranteed home buyouts based on certifications and experience We offer clients the best in software and technology to track the process.
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