When you're relocating to accept a new job or promotion, you may be excited about putting down roots in a new location. However, if you purchased a home during the recent real estate bubble, you may still be tied to your current location by an albatross that can't be sold for enough to pay off your mortgage.
If you don't want to rent out your home, but can't afford to carry two mortgages at once (or rent in your new location while owning a home elsewhere), you may be wondering whether you have any other options. Fortunately, there are several types of relocation services that may help you offload your underwater home. In some cases, your employer may even cover these services as part of your relocation package.
Read on to learn more about what you can do to quickly rid yourself of a home that's worth less than you owe.
What type of home selling services are available?
If you choose to sell your home to a relocation company rather than bring money to the table at closing, there are a few different home selling options that may be offered to you.
A guaranteed buyout offer (GBO) is one of the most common choices. When you seek a GBO, you'll have several property appraisals performed by different agencies, taking into account local comparable sales. These appraisal amounts will be combined to create an average price, and once you've placed your property on the market for a specified period of time, you'll be able to accept the GBO and walk away from your home.
If you owe more on your mortgage than the GBO will cover, your employer may make up this difference as one of the benefits offered through your relocation package. In other cases, you may be able to persuade your bank to agree to accept the GBO amount in full satisfaction of your mortgage debt, similar to a short sale.
Another choice that may be offered is the buyer value option (BVO). This essentially requires your employer to pay for the marketing of your home for a specified period of time, and if an acceptable offer isn't made within this time period, the process will convert to a GBO.
This can be a good option if your home isn't too far underwater, but real estate sales in your area are slow and you don't want to potentially wait months (or even years) to be rid of your mortgage. You'll also have some freedom to negotiate and accept a final sales price, as long as you're not rejecting offers that are appropriately priced.
What will you need to do to get this process started?
If your employer has offered you one of these options as part of your relocation package, you may want to speak to a certified financial planner or trusted tax professional to determine which of these options would provide you with the greatest benefit. Pay careful attention to any expiration dates on the offer—if you delay communicating your choice until after this date has passed, you may no longer be able to receive the same level or type of assistance previously offered.
Once you've accepted an offer, you'll want to have your house staged quickly. Even if your actual move isn't scheduled for a few weeks or months, you'll want to pack, ship, and store any belongings you and your family don't immediately need. A clean, uncluttered home will photograph better, and the relocation company may even provide professional stagers to help relocate your remaining furniture and mask any minor imperfections to help your home fetch the highest possible price.
Because there's generally a minimum amount of time your home is required to be on the market before your buyout offer is settled, the sooner the relocation company can start to market your home, the sooner you'll be able to walk away from your home free and clear.Share