Like any industry, the world of third-party employee relocation management is rife with technical terms. But you don’t have to be an expert or work for a relocation management company (RMC) to understand what’s being said.
Here are 37 terms to help make the complex simple.
Amended-from-Zero Sale / Amend-from-Zero Sale
The Employee receives a third-party offer prior to receiving an appraised value offer from the RMC. The RMC determines if the offer is bona fide and provides a contract of sale to the Employee based on the acceptable terms of the outside offer.
Amended Value Amount
The offer amount extended to a relocating Employee from the RMC to purchase the Employee’s property based upon a bona fide offer from a qualified outside buyer. The RMC will amend the Guaranteed Buyout Offer to reflect the third-party value representing the Amended Value Amount.
Amended Value Sale
When the relocating Employee receives a bona fide offer from a qualified buyer after the Employee has received a Guarantee Buyout Offer from the RMC. The RMC amends its Appraised Value Offer to the acceptable terms of the outside sale price.
Anticipated Sales Price
The sale price at which a property would most probably sell when exposed to the market for a reasonable time with payment to be made in cash or its equivalent, assuming an arm’s length transaction. This is often done in accordance with the procedures in the Worldwide ERC® (Employee Relocation Council) Appraisal Guidelines.
Appraised Value Offer (AV or AVO)
An offer extended to a relocating Employee from the RMC to purchase the Employee’s property based upon the average of a specific number of appraisals conducted by designated, certified appraisers. The appraisals establish an Anticipated Sales Price for a relocating Employee’s residence.
Appraised Value Sale
The Employee accepts the contract of sale (Appraised Value Offer) extended from the RMC to buy the Employee’s property based upon the average of a specific number of appraisals.
Bona Fide Offer
An offer from an outside buyer that is in good faith.
Broker's Price Option (BPO)/Broker Market Analysis (BMA)
A Real Estate Broker’s “as is” and “with improvements” list price and estimated sales price of a property. The BPO/BMA is often used as a barometer for the appraisals, marketing strategies, and recommended inspections, repairs, and improvements.
Buyer Value Option (BVO)
Buyer Value Option (BVO) is similar to the Amend-From-Zero Sale; however, there is no appraisal or Appraised Value Offer to the relocating Employee from the RMC. The Employee lists the property and generates an outside offer. The RMC determines if the offer is bona fide and closes with the Employee under the terms of the outside offer. The BVO is an alternative to Direct Reimbursement and the Appraised Value Offer.
Carrier
Household goods movers with which the RMC has an established subcontractor relationship.
Commercial Bill of Lading (CBL)
The standard form that constitutes the contract of carriage between the RMC and a carrier.
Comparable Property
Comparable properties to the for-sale property in size and style and selected by the appraisers and broker or offered by the Employee for consideration. Properties must be in the same neighborhood, development, subdivision, or complex unless there are not sufficient comparable sales within the defined areas, in which case the appraiser may use comparables from general market areas.
Contract Price
The price at which the RMC agrees to purchase the Employee’s home whether as an Amend-From-Zero, Amended Offer, BVO, or Guaranteed Buyout Offer.
Designated Certified Appraiser
An individual who meets all the requirements of applicable laws to practice as an appraiser and/or be certified in states and/or localities that have certification and/or licensing requirements for appraisers. Specific criteria for a designated, certified appraiser include:
Have knowledge and experience in using industry-accepted relocation appraisal guidelines, such as the Worldwide ERC® appraisal form and standards;
Familiar with market conditions in areas of the home location;
Access to current location market data through multiple listing service (MLS) or other home list and sale data service, when available;
No present or future interest in the home, nor a relationship that would affect an independent judgment in determining Anticipated Sales Price;
No relationship with the Employee or RMC (personal or business) that would affect the objectivity and/or independence of the appraisal;
Not appraised the home within the prior 6 months;
Have ability to perform and deliver the appraisal in accordance with RMC-contracted timeframes; and
Appraiser’s fee is not based on a percentage (%) of the Appraised Value of the home nor contingent upon the sale of home.
Direct Delivery
A shipment that is delivered directly to the residence without Storage-in-Transit.
Direct Reimbursement of Home Sale Expenses
The reimbursement provided to an Employee who has been authorized for relocation expenses and is entitled to reimbursement of home sale expenses. The RMC may provide home marketing services designed explicitly for direct-reimbursement home sale efforts.
Disclosure Statement
A statement made available to potential buyers providing known information of the property; community or association; and repairs and defects relevant to the home, such as water seepage in a basement or the presence of radon gas or lead-based paint.
Employee (EE)/ Transferee (TEE)
A relocation or transfer eligible employee as determined by his or her Employer. In relocation, Employee and Transferee (EE or TEE) are interchangeable.
Escrow
In relocation, escrow encompasses the following:
An arrangement where an independent, trusted third-party receives and disburses money and/or documents for two or more transacting parties with the timing of such disbursement by the third-party dependent on the performance by the parties of agreed- upon contractual provisions;
An account established by a broker, under the provisions of license law, for the purpose of holding funds on behalf of the broker’s principal or some other person until the consummation or termination of a transaction; or
An account held by a lender to pay obligations, such as property taxes and insurance premiums.
Expiration Date
The date by which the Employee must accept or reject the Guaranteed Buyout Offer for participation in the home sale program.
Foreclosure
The legal process reserved by a lender to terminate the borrower’s interest in a property after a loan has been defaulted. When the process is completed, the lender may sell the property and keep the proceeds to satisfy its mortgage and any legal costs. Sales resulting from foreclosures may be used in the appraisal process to determine the Guaranteed Buyout Offer as prescribed by client policy.
Guaranteed Buyout (GBO)
Once the property appraisal process is concluded according to policy, the Guaranteed Buyout Offer (GBO) is delivered to the Employee both verbally and by hard copy. As determined by company policy, a standard GBO is valid for 60 – 90 days.
Home Sale Services
These services include the performance and coordination of all real estate transactions for the Employee, including assistance in marketing the home, negotiating with potential outside buyers, helping the Employee become familiar with his or her new location, providing renter/buyer assistance, and dual-career and mortgage counseling.
Inspections
A professional examination of a home’s major components that may include exterior, foundation, framing, plumbing, septic, electrical system, heating, air conditioning, pest, roofing, and interior.
Line Haul Services
Transporting a shipment under tariff from the point of origin to its destination.
Loss on Sale
The difference between the GBO and the eventual sales price. This amount usually has a limit of how much the RMC can accept without direction from the client.
Loss Protection
A relocation policy that provides a provision where a relocating Employee is reimbursed the difference between the original home purchase price and eventual Contract Price. There may be caps on this amount with provisions for tax protection and capital/structural improvements to be included or excluded in loss protection as determined by company policy.
Management Fee
The price paid to the RMC for managing the Employee’s move.
Mortgage Payoff
Represents full payment of all monies due to the Employee’s mortgage lender(s) when acquiring the Employee’s property based on client policy and sale type. The RMC is responsible for ensuring that all mortgage liens are released by lenders and no further obligations of any kind are held by Employee based on the contract date.
Move in Transit
The activities associated with the shipment and storage of an Employee’s personal property in connection with one’s relocation.
Move Management Services (MMS)
The process of and activities related to moving an Employee’s personal property, including carrier selection; preparation of bills of lading; shipment booking; moving; overseeing carrier evaluation process; performing service performance and prepayment audits; providing management information reports; assisting in claims preparation, filing, and settlement; and providing on-site quality control service and a quality assurance plan.
Moving Expenses
All costs incurred by the RMC in handling and moving an Employee’s personal property, including but not limited to packing, transporting, storing, and unpacking. Moving expenses exclude the negotiated Management Fee.
Prepayment Penalty
A monetary penalty imposed by a lender on a borrower who pays a loan off before its expected end date.
Relocation Management Company (RMC)
The third-party corporation engaged by the Employer to manage Employees’ relocations.
Storage-in-Transit (SIT)
Temporary storage authorized in connection with a shipment of household goods.
Tax Protection
Most costs associated with relocation are considered income to an Employee. The company policy may provide for tax protection, referred to as “gross up” of some or all of the taxable expenses.
Title
All interest held by the Employee in the property. For purposes of the home sale services, “title” shall mean the degree of ownership held by the Employee that provides full power for the disposition of the property.
