In a Buyer Value Option program (BVO), the employee is responsible for listing their home for sale, with marketing assistance from the Relocation Management Company (RMC). The employee must secure an outside buyer willing to purchase the home at a fair market value. A BVO provides all the tax benefits to the employer and employee, but it is dependent upon the employee securing an outside buyer. If the contract is deemed valid, the employee is funded their equity based on this outside offer amount and the RMC closes the sale with the buyer at a future date. In a BVO scenario, home appraisals are never ordered.
expatriate assignment, WHR Group, expat assignment

This differs from a Guaranteed Buyout (GBO) program. Under a GBO, the RMC orders two home appraisals and then averages the two to determine a guaranteed offer. If the employee is unable to sell their home on their own, the employer takes the home into inventory and must maintain it until the company is able to resell it. This obviously carries potential risks and additional costs for an employer. A BVO, on the other hand, minimizes this risk since the employer only purchases the home after the employee has secured an outside buyer. Both BVO and GBO home sale programs provide tax benefits to the employer and employee.

Consider both options to decide which aligns best with your company objectives.

BVO versus GBO Summarized

Buyer Value Option (BVO)

  • Employee is responsible for listing their home (with marketing assistance from the relocation company), securing a buyer, and then the RMC closes the sale with the outside buyer.
  • Broker Market Analysis completed by two real estate agents to establish an appropriate marketing parameter.
  • Tax advantage for the company & transferee.
  • No home appraisals.
  • Employee is not required to attend closing.
  • Minimizes company costs as buyer is secured by employee.
  • If home sale falls through, home goes into corporate-owned inventory.
  • Employee remains financially responsible for their home until an outside offer is accepted which might delay their move to new work location.

Guaranteed Buyout (GBO)

  • RMC orders two home appraisals and then averages the two to determine a guaranteed offer.
  • Guaranteed offer expedites the relocation process so that transferee can relocate faster.
  • If the employee is unable to sell their home on their own, the employer takes the home into inventory and must maintain it until the company is able to resell it.
  • The company carries risk of owning and maintaining the home until it is sold.
  • Tax advantage for the company & transferee.
  • Employee is not required to attend closing.

WHR can help employers and employees with BVO, GBO and other home sale program benefits including:

  • Direct Reimbursement
  • Home Inspections
  • Home Sale Bonuses
  • Loss on Sale
  • Rental Assistance/Lease Break Assistance
  • Destination Services (temporary housing; house hunting trip; destination closing costs; renter destination services)
  • Household Goods Moves (plus vehicle shipment and temporary storage)
  • Lump Sum Benefits
  • Cost of Living Assistance
  • Policy Exceptions
  • Policy Tiers vs Core Flex Benefits

Let us know if we can help you with your relocation and global mobility programs

Contact: 262-523-2800, sales@whrg.com

 

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Read more about Buyer Value Option (BVO) Home Sale Programs.
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