(DANBURY, CONN. – February 1, 2010) – Cartus Corporation, the premier provider of employee relocation solutions, has released the findings of its recent pulse survey on home valuation practices in the United States. The survey of 178 companies confirmed that businesses are seeking new strategies to help home-owning corporate transferees sell their homes.
One such new approach is using “early home valuation” to determine the viability of a proposed transfer. The Cartus survey found that 45% of respondents’ companies “always” or “sometimes” use early valuation of a potential transferee’s home to assess financial fitness before extending a firm offer to relocate. Early valuation can help a transferee decide whether to accept a transfer, and it can help employers determine the extent of potential financial exposure. At the very least, early home valuation helps companies establish more accurate budgeting and plan ahead by allowing advance fine-tuning of any needed assistance.
“Determining the value of a transferee’s home before his or her relocation is a ‘done deal’ that flies in the face of tradition, but it is a best practice that we have been recommending to our clients,” said Renee Carnes-Rook, Cartus vice president of supply chain management. “In the past, all parties involved—transferees, HR reps, real estate agents, and employers—assumed that a house would sell quickly, and often for more than its original purchase price. But such assumptions have been off the table in recent years, and now the biggest question is, ‘Can the employee and the company afford this move?’”
Of the 45% of respondents who use the early valuation approach, one-quarter said they have recently added the process to their relocation programs. When the early valuation process was used for candidate assessment, 26% of respondent companies said they have had candidates “deselect” themselves from the relocation offer, and nearly 10% of companies had proactively withdrawn offers due to a candidate’s individual financial situation related to his or her home. Overall, 40% of the time, the outcome of the early valuation process influenced the relocation in some way—either by a deselection or an increase in the level of benefits and/or support offered by the company.
Another facet of the home valuation process addressed in the survey is the guaranteed buyout offer. Cartus found that 76% of respondent companies now require mandatory marketing—a process through which employees must market their homes themselves for a predetermined time period prior to the start of the appraisal process that precedes a guaranteed buyout. This represents a 10% increase over results from a similar Cartus survey conducted almost one year ago. “This increase can be directly correlated to today’s real estate market pressures,” said Carnes-Rook. “Furthermore, 54% of companies that don’t presently require mandatory marketing by their relocating employees are considering adding it to their programs.”
Challenging markets call for distinctive marketing approaches. Companies today are more actively exploring the financial impact of relocations and requiring their employees to share more responsibility for the relocation process. Concluded Carnes-Rook, “Once the employer and employee have agreed on the relocation decision, selling the house at the departure end becomes the bridge to a successful relocation effort. Quite simply, both right now and for the foreseeable future, it’s all about selling the house.”
About Cartus
Cartus is the premier provider of global employee relocation solutions serving the corporate, government, and affinity markets. Through its industry-leading mobility management, outsourcing, consulting, and intercultural and language training, Cartus helps the mobile workforces of organizations of all sizes achieve success worldwide. With more than 50 years of experience, Cartus helps clients achieve cost reductions and enhance service performance to accomplish their organizational objectives. Cartus is part of Realogy Corporation, a global provider of real estate and relocation services. Visit www.cartus.com and www.realogy.com for more information.