I recently took a buyer out to tour Waterfront Homes in Bayville, NJ. One of the houses we looked at had this language in the agent remarks section; "Extra paperwork involved." The extra paperwork was in relation to the house being sold by a relocation company.
So, Is Buying a "Relocation House" a Good Deal?
A lot of people ask, 'Are relocation house purchases a good deal?' If you're asking this question, you are most likely interested in purchasing a house from a relocation company. By buying a house from a relocation firm, often called a 'relo,' you can get a good deal if you take a few precautions as you go through the home buying process.
Relocation companies typically buy homes at a discount, but with the increased number of foreclosures and short sales in the past couple of years, they may be more willing than ever to make a deal. With the glut of properties available at great prices, take your time, do your due diligence, and you should be able to drive a hard bargain.
Steps to Make Relocation House Purchases a Good Deal
You need to find out the pricing history for the home and the neighborhood. Is the relocation company pricing the property to move? Get pricing opinions on the properties you select. This will usually be called a Comparative Market Analysis or CMA, available through me. Make an offer only after you have all of this information. Also, remember that a relocation company is an unemotional seller, and this can help you get a good deal on a relocation house purchase. Unlike an individual owner, there's virtually no risk of 'offending' the seller with a low offer.
Buying a House from a Relocation Firm
Most properties owned by relocation companies will be sold 'as-is.' This means your home inspector's inspection needs to be as thorough as possible when buying a house from a relocation firm. Be sure the home inspector knows the home is a relocation house being sold by a relocation company. This is really important for all real estate transactions, but especially when buying from a relocation company. The relocation company's property disclosure form will likely say that they have "no knowledge of any problems." In other words, they can say whatever they want, and you'll have a virtually impossible time trying to prove otherwise. Make sure your inspector is extra thorough on your inspection and looks for things like water damage, evidence of poor drainage, foundation settling ... anything that could cost you money fixing after you've purchased the house.
Get pre-approved and not just pre-qualified by your mortgage lender. Pre-approved means you've filled out a mortgage application. This way your offer, even if it's a low one, will get more attention. The more complete your offer is, and the quicker and easier the relocation company perceives the closing to be, regarding what percentage you can put down, how quickly you can get settlement, and your credit score - may end up being more important than your offer.
As with other real estate listings, the length of time a house is on the market will have an impact on how willing the relocation company will be to negotiate on price. You will have the greatest bargaining power with homes that have been on the market longer. If you offer a low price on a house that has only been on the market a few weeks, the relo company may not budge. But, if you find a relocation house that has been on the market for a few months or one that has already had several price reductions, you may be able to get a really good deal.
It all depends on inventory, time on the market, and market conditions. You cause no harm by offering low, and you just might get a deal. The worst that can happen is the relo company says no. Unless you are in a seller's market or the home is already deeply discounted, your chances of getting a good deal on a relocation house purchase are good.
If the relocation company purchased the house, they are paying the utilities and taxes as well, so they may be in a good position to sell at a lower price to a quick and secure settlement. Ask if they'll pay or split closing costs if they won't lower the price.
You want someone looking out for your interests, not those of the relocation company, so you should hire a real estate attorney to review the documents. Most relocation companies require the use of their sales agreement forms, which differ from standard realtor-approved forms, and you don't want to end up in a bad mortgage deal.
Many people have successfully purchased houses from relocation companies. With a good real estate agent and a well-constructed offer, in this market, you should be able to get a good deal on a relocation house purchase. Which brings us back to the question, ôAre relocation house purchases a good deal?ö With the right market and a little effort from the buyer, they can be. Information provided by Karl Hess, Keller Williams Realty Ocean County and Realtor101.