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A Guide To Buying A House From A Relocation Company

Katie Ziraldo4-Minute Read
March 31, 2021

Whether you’re a first-time home buyer or an experienced real estate investor, finding a good deal on a property is exciting. If you find a good deal on a property that also happens to check all your boxes, it can be tempting to jump on it – and for good reason, considering these homes typically sell quickly. But if the deal is brought to you by a relocation company, it’s important to understand what you’re facing before jumping in headfirst.

So, what are relocation companies, and how does buying a house from a relocation company differ from a traditional sale? Let’s explore.

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What Is A Real Estate Relocation Company?

A relocation sale, or relo sale, is a home sale organized by a relocation company. A relocation company, also called a relo, is hired by a corporation to help its employees move from one area to another for employment purposes, such as one office location closing and another opening.

Corporate relocation services often offer employees relocation assistance, up to and including the sale of the employee’s current residence as well as the purchase of a new home in the desired location.

Why Do Relocation Companies Own Houses?

If the employee, or client, is currently renting, the relo company may hire movers and assist in finding a new rental home. But if the client is a homeowner, the relo company will often take on the responsibility of selling the property.

Typically, this means the property will remain in its owner’s name for the first few months on the market, with the relo company offering advice on pricing, marketing and other sales techniques. But in some cases, the relo company may offer to partially or completely buy out the property – freeing up the funds for the client to buy a home in their new location. This is the main reason relo companies own and sell houses.

How Does Buying A House From A Relocation Company Work?

Buying a relo property can be similar to any other real estate transaction, although the process does involve some differences.

One difference between a traditional home sale and a relo sale is that relocation companies typically prefer a clean sale without contingencies. A contingency is a clause in an offer stating that specific conditions must be met for the deal to close. If those conditions aren’t met, the buyer can break the contract without financial repercussions.

Waiving contingencies can make your offer more appealing, but be careful to ensure that no surprise costs arise down the line. If you’re thinking about making a clean offer, we recommend consulting a real estate agent.

Another difference is that negotiating the home price may take longer on a relocation sale. Relo companies usually work during business hours only, so they might not be available to respond to your home offer right away.

Because their availability is limited, you’ll have to be prepared to move through the relocation sale process more quickly. You’ll want to have all necessary paperwork in order, plus an earnest money deposit, preapproval letter and clean offer at the ready.

Finally, relo companies may offer the home as-is, meaning they’ll do no repairs or offer no warranties concerning the condition of the home. In this case, it’s more important than ever for a home inspector to take a close-up look at the property and identify any major needs for a repair.

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What Are The Pros And Cons Of Buying A House From A Relocation Company?

When compared to a conventional home sale, buying a house from a relo company can offer a few distinct advantages and disadvantages.

Pros

Buying a house from a relocation company might come with the following benefits:

  • Bargains are possible. Although relo houses aren’t necessarily steals, they can offer great value due to the fact that a business, rather than an individual, is selling the home. Relo companies are primarily focused on getting back the money they spent on the property, so you can rest easy knowing these properties will almost always be fairly priced.
  • Houses tend to be in good shape. Compared to short sales and foreclosed properties, relo homes are generally well-maintained and in good condition.
  • Emotions don’t influence negotiations. Homeowners have invested time and energy into their house, so when you’re dealing with an individual seller, emotions can sometimes get in the way of negotiations based on reality. Relo companies have no history with the property, removing any emotional bias from the equation.

Cons

The potential exists for problems with buying a house from a relocation company. Review the following disadvantages before deciding to purchase a home through a relocation sale.

  • Delays are possible. Relo companies often take longer to respond to prospective buyers. This is due to the companies’ corporate structure, which usually includes a Monday through Friday schedule.
  • Paperwork abounds. Buying a relo property comes with extra paperwork. To minimize the relo company’s liability, buyers are required to sign additional riders, amendments and disclosures.
  • Fewer contingencies are accepted. Relo companies often prefer clean, no-contingency offers, which mean less risk protection for the buyers. 
  • You must be prepared to move quickly. Despite the delays that working with a relo company may cause, the company will still expect prospective buyers to move quickly, so buyers are encouraged to start the approval process or get preapproved for financing before they start looking for homes. 
  • Properties may be sold as-is or without warranties. As previously noted, if you’re interested in buying a relo property as-is, be sure to order a thorough home inspection to identify any structural issues or reasons for significant home repairs.

Where Can I Find Listings For Relo Houses For Sale?

If you want to find relo properties for sale, real estate agents who specialize in relos and often work with more than one relo company may be able to help. Relo companies also list their properties through the traditional channels – meaning you may come across a relo house in your search even if you aren’t actively looking for one.

The Bottom Line: Relocation Companies Are One Option If You’re Looking For A Bargain

Whether it’s a traditional sale, short sale or relo sale, it’s possible to find bargains on the housing market. If you’re thinking of buying a house from a relocation company, it’s important to consider all the pros and cons of this option to minimize your risk and give yourself the best chance of approval.

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Katie Ziraldo

Katie Ziraldo is a financial writer and data journalist focused on creating accurate, accessible and educational content for future generations of home buyers. Her portfolio of work also includes The Detroit Free Press and The Huffington Post.