White Papers
Loss on Sale Assistance
As the real estate market has declined, loss-on-sale provisions have become an important policy consideration for the first time in many years. Too many transferees now find themselves “upside down”, where their home’s selling price is less than what they originally paid for it. While Worldwide ERC data indicate that the majority of companies (60%) do not offer loss-on-sale assistance, most are acutely aware of the issue and considering their options.
Best Practices in Inventory Management
Clearly, the best inventory strategy is to keep properties from entering inventory in the first place. The better relocation policies today reflect current market realities, with aggressive home marketing assistance programs and incentives to employees to price realistically and to complete the relocation efficiently. Still, in today’senvironment, it’s not surprising that some properties will end up in inventory. The best practices outlined in this paper will help to minimize both days in inventory and total program costs.
The Importance of Cultural & Language Training
Companies commonly invest $1 million or more in a typical international relocation assignment, yet about 30 percent of assignees end up returning early and an alarming 70 percent do not achieve all of the goals established for the assignment. Too often, we ascribe failed assignments to poor housing choices, unhappy spouses and children and misdirected emotions, but not to issues related to cultural differences. Careful cultural assessment and training, in fact, can mean the difference between a successful assignment and a costly, failed one.
Short Sales
What is a short sale? A real estate short sale means the lender has agreed to accept less than the total due on the outstanding mortgage. From a transferee’s perspective, if the departure home is worth less than the mortgage balance, the “least bad” alternative is often to persuade the lender to agree to a short sale.
Supply Chain Management: Avoiding a Weak Link
In considering relocation service providers, it’s important to consider how they select and manage their supplier networks. Many service failures can be averted by conscientious supply chain management. Diligent management begins with informed partner selection and relationship building and continues with frequent measurement and evaluation.
The Tax Man Cometh
Tax assistance is typically the third most expensive benefit behind home sale and household goods. It costs more to provide tax assistance than it does to help an employee buy a new home. In fact, it often costs more to provide tax assistance than to pay for an employee’s house hunting, temporary living and final trip expenses combined! By properly structuring relocation benefits, taking advantage of relocation-friendly tax laws and customizing tax assistance policy to the needs of transferring employees, companies can control, and potentially reduce, tax assistance costs.
Relocation Technology
The rudimentary relocation data systems of the 1970s and 1980s have been left in the dust; in fact, even the technology from just a few years ago is obsolete. The ability to harness the power of the latest technology, leverage its capabilities and capitalize on its efficiencies allows the most savvy corporate relocation companies to provide first class mobility services.