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Corporate relocation policies often include generous home sale benefits and perhaps some options. Before any decision making, decipher the esoteric language, assimilate the concepts and defer to the relevant subject matter experts for personalized information.

Marketing assistance program (MAP)

This program is designed to help the transferee sell their home in the shortest time at the best price. The employer's relocation partner typically assigns a real estate specialist for this support. They provide marketing assistance by identifying licensed brokers, ordering Broker Market Analyses (BMAs) and working with the broker to recommend a list price. Once the home is listed, the specialist maintains contact with the Realtor to track and monitor marketing efforts, home showings and price reductions, and acts as a consultant on strategy for effective market positioning.

If the owner already has a relationship with a broker, they may be able to work with the preferred agent. However, some employers require that the broker register with the relocation service partner. By registering, the broker agrees to pay a referral fee to the company, which defrays the cost of the relocation program.

Direct reimbursement

In addition to marketing assistance, the employer may reimburse the assignee for reasonable and customary home sale closing costs, including broker commission. It is advisable to consult with the mobility consultant on whether or not this benefit is contingent upon broker registration. If so, confirm a preferred broker's compliance before signing a Listing Agreement.

Buyer value option (BVO)

In a BVO program, the fair market value is based on a bona fide written offer received from a qualified buyer. The term buyer value is used to refer to this offer. If the offer is accepted, the relocation company contracts to purchase the home from the transferring employee at the buyer value and then sells the property to the prospective buyer for the same price. Therefore, there are two sales transactions that occur. In addition to tax benefits, the employee does not need to attend the closing. Nor is the employee responsible if the transaction with the outside buyer falls through.

Appraised value option (AVO)

In an AVO program, the company offer to buy the employees property is based on appraisals conducted by two or more professional certified appraisers. It is designed as a backup plan, should the owner not be successful in procuring a qualified buyer. It is also referred to as a Guaranteed Buyout Offer or GBO.

When followed in accordance with IRS guidelines, this provision provides favorable tax treatment to the transferee. However, the program is not the optimal solution for either the company or employee. When the employer buys the home, they will be responsible for covering the marketing and carrying expenses until the home is sold, and the employee typically finds the offer based on appraised value to be lower than expected. However, it does serve as a safety net for a transferee who needs to move on to their new assignment prior to a sale.

Listen, learn and inquire

The design of a home sale program is influenced by several factors, including tax implications, federal regulations and budgetary constraints, resulting in a web of complexity. To unravel the mystique behind home sale benefits, read your company's relocation policy carefully, understand the terminology and consult with a tax adviser. Of utmost importance, identify the most appropriate resources for information and ask a lot of questions.

My article on the Amended Value Sale explains this benefit, known as AV.