Cartus relocation company is a CROC! (that is an opinion, for more opinions Google Cartus sucks).
Actually many "relocation" companies that are supposed to help the employee are just fronts for making profit. And they have such a compelling pitch! How could an eligible buyer actually decide to bypass them? EASILY!
I'll explain exactly why you might want to bypass your relocation company AND how you can use PART of their system to your benefit and ditch the other part.
Why am I picking on Cartus? Cuz I was robbed. I got this email the other day:
Hi, I'm moving to Virginia with my job in a month and my fiance and I are a big Frank fan! {Name Omitted} recommended you to us. We love the website and reading/listening to your blog. And, we'd like to go with your realty firm when we purchase a place in Northern Arlington this summer. Fortunately for us, my company (XYZ) is willing to pay Realtor's fees and closing costs but I need to approve you as a realtor/realty before they will allow us to get started.
I added the emphasis.
1) Fortunately for us. Wow, the company is so gracious. They really care about their employees. Consider it a benefit like healthcare. They will pay Realtor fees and closing costs! (end sarcasm here)
Ok, first of all when you are buying, there are NO "Realtor fees" (sidenote: ha, I wonder if they pay for the bogus Realtor Admin fees which the Washington Post, link, just covered and cited my blog) per se because the Realtor fees are paid by the buyer. But it surely makes for a good BS pitch in the brochure. Why not also add: free 
keys! As for the "closing costs" I'll get to that shortly...
2) Approve you. Approve me for what? Make sure I'm good? Knowledgeable with people that are relocating? Maybe a quiz or a check for references? No. None of this happened.
I knew the "approve" the agent sounded fishy. I warned the buyer... I said "I bet they are up to something."
Finally Cartus contacts me. I get an email that effectively said: You are approved when you agree to give us 40% of your commission.
(actually it said "registration entails a verbal agreement of a 40% referral fee.")
Are you F-ing kidding me? "Referral fee?" Did they refer business to me? Hell no. These buyers found me on their own. They were a personal reference from a friend that felt like they got great service. And Cartus demands 40% to be part of their program. What is this Robin Hood? Take from one to give a another? And keep a little for profit in the process?
So here are the details for their program, I am a fine print reader, so at the end I will try to parse this out for you.
CARTUS HOME PURCHASE CLOSING COSTS
There are numerous expenses associated with the purchase of your new home that vary by state and local custom. You will be reimbursed for buyer’s expenses customary in the new location; which should be discussed with your Cartus Relocation Consultant.
In all cases, only one set of lending fees and one-time closing fees will be reimbursed. Fees and charges most commonly recognized for reimbursement are:
Abstract or title search, Amortization fee, Application fee, Appraisal fee (1), Attorney fees (where required by state law), Certified copies, Credit report (1), Document preparation fee, Escrow fee, Guarantee fee, Inspections that are normal and customary for the area (termite, well/septic),
- Loan origination fee not to exceed 1% of the mortgage amount. If you do not contact Cartus prior to beginning the home purchase assistance program, you will not be eligible for the 1% loan origination fee.
Homeowners title policy for new construction only, Lender's Title Policy, Messenger service fees/express shipment fees, Notary fees, Recording fees, Settlement or closing fee, Survey, Tax service fee, Title examination, Underwriting fee
Isn't it fun making a really long list of fees that are paid? Even though many of them are next to nothing. I just pulled up a HUD1 for a buyer (note that fees can vary by closing company and frequently get renamed and shuffled around).
Here are a few of the next to nothing fees on the list that you get FREE!!: Notary Fee= $0, Messenger= $55, Tax service fee $0, Recording $65, Termite $35, Credit report $14, Title examination=$0.
The fees that have some real value: Survey= $265 Settlement fee=$195 Title Search=$175 Lender's title insurance=$1,800 (on a $650k VA home, reissue rate) NOT present in the list of closing costs: Owner's title insurance= $1350 (except for closing costs) Read more on Owner's Title
Conditional costs. Ie IF, a big IF, you use their "approved" Realtor. You get: Loan origination fee 1%. Lenders have a ton of names for these types of fees. Sometimes they are called "Rate buy down" points, or "Discount Fee." The short hand is just "points." Points aren't necessarily bad (make sure to subscribe to this blog for a full post on when to buy points). More often than not, if you put down 20% there are ZERO POINTS, ie $0 Loan Origination fees. So if you DO use the Cartus program, and an "approved" Realtor, make sure you go out of your way to max out the full 1% point. (ie if the lender was going to charge you no points, they can make up the fee and buy down your rate, as in make your 5% rate 4.75% approximately)
But here is the fine print as I understand it...
BOTTOM LINE: You only have to use their approved Realtor IF you need that Loan origination fee. In other words, you can still pick your favorite Realtor and get all the other fees covered for free by Cartus. (I could be wrong, but that is how I understand their rules above).
Why in God's world would you give up the ability to get a "free" 1% loan origination fee?
Well that is a separate and lengthy discussion on rebating and discounting. Heck, there are several companies that will give you a 1.5% cash rebate. Heck a 1.5% cash rebate is MUCH better than no cash reimbursement for a 1% fee you might not have purchased normally.
WAYS TO MILK CARTUS
1) Have them pay ALL your fees except the 1%, and find your own Realtor that will give you a rebate.
2) Or if you find a Realtor that is willing to be "approved" by Cartus, tell them "hey buddy, you are willing to give 40% to Cartus right? And Cartus will just turn around and refund 33% (1% or 1/3rd of the 3% offered to buyer's agents) of the 40% in the form of a 1% loan rebate, why not just give me the 40% directly?! Cut out Cartus and get 1.2% refunded on your HUD1 vs 1% lender fee repayment and Cartus pocketing the rest.
3) Get your own un-approved agent, skip the loan fee reimbursement, yet accept all the other fees. So why am I telling you the secret path to getting the most cash out of the relocation company and system? Well maybe, just maybe you will then believe me that #3 above might be the best solution for you in the end.
Stop and think about for a second. Cartus demands 40% from a Realtor that you pick or one that they pick. So for the ones that they pick, what kind of Realtors will accept that? Oftentimes desperate ones. Perhaps those that are kinda struggling. You know, economy is tough right now. Weekend warrior Realtors that have nothing better to do? One that will pressure you into a house and hope to get you off their slate as fast as possible so they can make the next 60% deal from Cartus. Perhaps they have to cut down half the time they spend on you, to make it worth it.
So signing with Cartus with an "Approved" Realtor, is not much different than Rebating. I have no problem with the rebating business model. (note: you won't find many other non-Rebating Realtors talk about it openly). 
Why do I talk about it? Well as I like to say "I use to rebate, but then I got good." Yep Read: Realtor Rebates. Free Money or Expensive Savings? and more on rebating.
In the end, know you do have a choice. You can get the best of both worlds. You can get Cartus to pay a good amount of your closing costs, get a loan with NO loan origination fees, and get to pick an agent that is working for YOU, and not for Cartus.
Oh, and remember I'm not too busy for you, so email me. See I'm Not Too Busy For You video #1 and Video #2
Make sure to subscribe and comment and debate. Nobody likes a stale blog!
Written by Frank Borges LL0SA
Broker FranklyRealty.com
Owner FranklyMLS.com
Croc image DrBartje Fish image Phillip
ps. My experience was on the BUYING side. Can somebody comment on the SELLING side of relocating? Do they really buy the house at the appraised price and eat any subsequent loss? Now that seems to have some value in this market.
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