Successful Relocation Representation Presented by REBAC

Introduction To serve a transferee, a buyer’s representative needs to know how the relocation process works. the types of services a transferee needs. where and how to find transferee business.

Introduction Outline Introduction Module One: How Relocation Works Module Two: Building Relocation Relationships Module Three: Providing Superior Service Module Four: Developing a Marketing Strategy Exam: 25 questions, multiple choice

Introduction

Introduction

Introduction What is the “Relocation Business”? The relocation business consists of providing services to meet a corporation’s objectives in transferring employees from one locality to another. It also refers to transferees moving to a new location where unique services are needed by the relocating buyer.

Evolution of the Relo Business Corps. bought transferees’ homes and oftentimes took a loss, plus the properties are on the corps. books as assets Economic expansion – increase in corporate relocations Homefinding services Equity liquidation services Third-party relo companies corporations were stuck holding the property longer than originally anticipated Losses are transferred to the corp. If employees bought poorly, corps were at risk if employee transferred again

Today’s Relo Business Established third-party relo companies National referral networks Relo departments in large brokerages Brokerages competing with relo companies Relo organizations using buyer’s representatives

Module One: How Relocation Works

Module One: How Relocation Works Objectives explain the relo process identify roles and expectations describe compensation methods

Relo Market Segments Third-Party Companies Buyer’s Rep Transferring Corporations Transferees

Transferee/Broker Relocations 1. Handle tasks 2. Hire listing agent 2. Hire buyer’s agent 3. Sell origination res. 3. Buy destination res. 4. Move

Roles: Transferee/Broker Relo assumes all responsibility for how the move transpires may sell by owner or hire a listing agent may purchase alone or hire a buyer agent Origination broker and agent assume more responsibility, non-real estate-related tasks Destination broker and agent

Corporate/Broker Relocations 1. Define Relo Package 2. Handle tasks 3. Hire listing agent 3. Hire buyer’s agent 4. Sell origination res. 4. Buy destination res. 5. Move

Roles: Corp/Broker Relo All parties share the moving tasks, with no necessary consistency from one transaction to the next. Employer/corporation manages some non-real estate aspects of the move. usually refers transferee to local listing broker in the origination market. Occasionally refers transferee to broker in the destination market. takes full responsibility for buyout contingencies unless the brokerage network has a home equity program.

Roles: Corp/Broker Relo, cont. Transferee deals with any move-related tasks that the corporation does not take on if no referrals, finds agents or perhaps chooses to work without representation Origination broker and agent usually refers transferee to a buyer rep or listing agent in the destination market assumes some responsibility for the move Destination broker and agent

Third-Party Relocations 1. Define relo Package 2. Notify relo company 3. Refer to broker/relo dept 4. Assign listing agent 4. Assign buyer’s agent 5. Sell origination res. 5. Buy destination res. 6. Move transferee

Roles: Third-Party Relo Corporation contracts the relocation company Relocation Company orchestrates all aspects of the move refers transferee to listing broker (origination) and buyer representative (destination) or to brokerage with relo department handles transferee’s equity liquidation if needed

Roles: Third-Party Relo, cont. Origination Broker and Agent sells the home at the best possible price responds to the requirements of the relocation company interfaces with the destination broker Destination Broker and Agent finds a home that meets the transferee’s needs within the time constraints interfaces with the origination broker

A. The employee becomes a transferee … and typically receives a buyout package: relocation schedule and deadlines allowances for travel, moving and temporary housing buyout package provisions for transaction costs other contingent and out-of-pocket costs

Recent Trends Flat fee packages Incentivized packages Risk-sharing packages

B. The relo co. initiates the move Counseling Start up actions Movers, temp. housing, refer to listing and buyer brokers, appraisal, other (family needs)

C. Sale of residence Listing referral Determine initial representation Buyout package Closing and reporting

The Buyout Package Typical (relo company “buys” house) relo company advances funds corporation pays interest until sold corporation reimburses for sales deficit Market-driven (transferee holds house) based on CMA or appraisal longer marketing period relo company pays transferee only when house is under contract

D. Purchase of the new home Preparations Prequalification, researching the neighborhood, (schools, amenities, etc.) Home search Closing and moving Financial reconciliation Financial report is sent to the corporation

Relo fee (net of referral) E. Compensation Corporation Relo co. Relo fee (net of referral) Referral fee Orig. Comm. Dest. Comm. Dest. Broker Co-ops Agents Orig. Broker Comm. split

Compensation: Relo Company charges the corporation a fee (flat, cost-plus, or other) referral fees are credits to the corporation against the relo company fee

Compensation: Brokerage Relo Dept. Flat fee Split of commissions on listing and/or selling

Compensation: Licensee Relo company gets paid first Agents split listing/selling commissions with broker and co-operating brokers

Discussion Questions

Module Two: Building Relocation Relationships Objectives outline basic legal responsibilities identify requirements of transferees identify requirements of relocation companies and corporations identify ways of developing relationships with transferees, relocation companies and corporations

Discussion Question

A. Profile of Transferee pressure resistance ignorance of community stress family self-involvement ignorance of process pre-qualified repeated transfers

B. Service Philosophy

C. Fiduciary/Statutory Duties

Scenario

Scenario Disclose all pertinent information Advise of any risks Allow the CLIENT to make the informed decision (who is the client, transferee or corporation?) Verify client relationship according to your state law

The Corporation Wants happy transferee efficient move limited exposure maximum sale price marketable new property move handled by others relo company to work smoothly on-schedule move full accounting

Relationship Tips: the Corporation be cost-conscious observe relo etiquette discover wants and needs don’t overpromote treat transferees right make the corporation’s job easier don’t waste time

Discussion Question

The Relo Company Wants smooth relo on time and on budget full-price sale marketable new property experienced agents attention to corp as well as transferee preparation of transferee understanding of buyout agreement assistance in qualifying advance info on properties

Relationship Tips: The Relo Company coach transferee to “buy right” aim to reduce the cost of the transferee’s next move understand how the relo company gets paid meet urgency with action fit in to the relo company and corporate cultures

Review Exercise Two List the five most important things to the following parties in a relocation transaction: Relocation company Employer Transferee

Module Three: Providing Superior Service Objectives prepare to represent a transferee identify a transferee’s relocation needs orient a transferee to a new community describe a method of locating a home for a transferee assist in completing a relocation

Preparation Initial call Relocation packet Establish a foundation while being cautious not to create an agency relationship Relocation packet Includes general information and paperwork to begin the process. This should be sent immediately following the initial call.

Preparation Prequalification checklist Area Property Financial Family

Qualifying Methodology Ascertain needs over time Be flexible Let transferees qualify themselves

Preparing a Guidebook Guidebooks are used as a reference throughout the relocation transaction. Includes: forms to be completed daily schedule list of homes to be shown time frames

Finding The Right Home Show area, communities, neighborhoods Show properties Advise clients on how to “buy right” 1. AREA 3. NEIGHBORHOODS 2. COMMUNITIES 4. PROPERTIES

Counseling to “Buy Right” at or below market high appreciation stable neighborhood quick turnover least expensive good schools & services low taxes & assessments Wrong  over market low appreciation declining neighborhood one-of-a-kind most expensive incomplete subdivision stigmatized

Negotiating for the Buyer Strengths pre-qualified not contingent on sale of previous residence Weaknesses urgency vulnerability

Servicing Tips - 1 Pay attention to the situation Keep your eye on the transferring family Listen and remember Avoid self-promotion Never make assumptions Provide information Be flexible

Servicing Tips -2 Get along with the buyers Follow the buyers’ lead Let the transferees take responsibility Empower the transferees Let the transferees make the decision Let your actions promote your value Instill trust and a sense of security

Servicing Tips -3 Move at the transferee's pace Appreciate the eagerness to get it over with. Expect a close relationship Avoid "Rule 20” Help transferee buy a marketable house Keep the buyer and yourself in the center of the transaction.

Module Four: Developing a Marketing Strategy Objectives assess relocation representation opportunities identify ways to market relocation services develop a personalized relocation marketing plan

Assess Yourself Income potential Time pressure Emotional strain Information requirements Learning curve Non-financial rewards

Assess Your Market Size Volume Competition Ease of entry

Some Specialties geographical area type of employee cultural/language background origination market price range age group

Guidelines for positioning

Marketing: Third-party segment Targets: relocation companies Messages specialization process knowledge full service Approaches promotions directories connections

Marketing: Corporation Segment Targets: smaller local corporations human resources/relocation manager Messages: same as for relo company, plus unique services understanding of corporate needs more time to spend on transferees Approaches promotions calls and presentations to companies

Marketing: Transferee Segment Targets: Individuals professionals, government employees, business owners Messages full representation process knowledge all the properties Approaches promotions advertising market presence

A Marketing Plan Transaction/Income Goals Target Types Marketing Messages Marketing Budget Marketing/Promotional Programs Allocation of Resources Action Schedule

Final Thoughts on Succeeding in Relocation Representation Know what your market will let you do. Know what you have to do. Go after the right targets. Provide superior service. Be prepared.