Buyer Value Option (BVO) vs Guaranteed Buyout (GBO) Home Sale Programs. How Do they Compare?

In the realm of corporate relocation, home sale assistance programs play a crucial role in easing the transition for employees and companies alike.

Among the relocation home sale programs, the most popular options are the Buyer Value Option (BVO) and the Guaranteed Buyout Option (GBO) programs.

Each option offering distinct advantages tailored to different needs, our blog will review:

Buyer Value Option (BVO) features and benefits
Guaranteed Buyout (BVO) features and benefits
Provide a side-by-side comparison of the home sale programs

BVO vs GBO Home Sale Benefit home sale with contract

Buyer Value Option
(BVO)

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 buyer value option program provides all the tax benefits to the employer and employee, but it depends on the employee securing an outside buyer. The employee is funded their equity, if the contract is deemed valid, based on the outside offer amount. The RMC closes the sale with the buyer at a future date. In a BVO home sale scenario, home appraisals are never ordered.

Buyer value options are a good way for an employee to oversee the entire process and ensure the best fit for their home. The risk of the home sale falling through falls onto the employee in this home sale option.

Read our blog: What is a Buyer Value Option (BVO) Home Sale Program

Guaranteed Buyout Option
(GBO)

What is a Guaranteed Buyout (GBO) program and how does it differ from a Buyer Value Option (BVO)?

Under a GBO program, the RMC orders two home appraisals and then averages the two to determine a guaranteed offer, with a fixed acceptance period. If the employee cannot sell their home on their own, the employer takes the home into inventory. The employer must maintain it until the company can resell it. This carries potential risks and additional costs for an employer.

A BVO home sale, on the other hand, minimizes this risk since the employer only purchases the home after the employee has secured an outside buyer. BVO and GBO home sale programs provide tax benefits to the employer and employee.

BVO Home Sale versus GBO Home Sale

When comparing the two, the choice between BVO and GBO depends largely on the company’s risk tolerance, market conditions, and the level of support they wish to provide to their employees.

BVO programs are cost-effective for companies but can place additional burdens on employees, making them more suitable for strong housing markets.

Conversely, GBO programs, while more expensive, offer greater assurance to employees, making them a preferred choice in uncertain markets or when a company prioritizes employee satisfaction and seamless relocations.

Relocation Home Sale Comparison reviews Buyer Value Option versus Guarantee Buyout Option

Here’s a side-by-side comparison of Buyer Value Option (BVO) and Guaranteed Buyout Option (GBO) home sale programs

Program Structure

Risk to Employee

Risk to Company

Home Sale Timeline

Employee Involvement

Financial Considerations

Market Impact

Flexibility

Appeal to Employees

Usage

Buyer Value Option (BVO)

Employee secures an outside buyer before the company purchases the home

Low risk if the home is sold quickly; however, the employee bears the risk if the market is slow

Lower financial risk since the company only purchases the home after an offer is secured

Typically, longer as the employee must find a buyer before the company purchase

High, as the employee is responsible for marketing and negotiating the sale of their home

Costs are generally lower for the company, but the process can be more stressful for the employee

The success of the BVO depends heavily on the current housing market

More flexible for companies that prefer to minimize upfront financial commitment

May be less attractive to employees due to potential delays and uncertainties

Preferred in stable or strong housing markets where homes are likely to sell quickly

Guaranteed Buyout Option (GBO)

Company provides a guaranteed buyout offer to the employee before listing

No risk to the employee as the company guarantees a buyout, regardless of market conditions

Higher financial risk for the company as they commit to buying the home regardless of market conditions

Generally faster, as the company buys the home directly if it doesn't sell within a set period

Lower, as the company takes over the home sale process after providing the buyout offer

Higher costs for the company due to the guaranteed purchase but provides more certainty and support for the employee

The GBO is less impacted by market conditions as the company assumes the risk

Less flexible due to the company’s financial commitment but provides more stability for employees

Generally, more appealing to employees due to the certainty and reduced personal risk

Often used in slower or volatile markets where securing a buyer may be difficult

Our countless years of BVO and GBO Home Sales experience can help you better navigate your journey.

This can include the range of tax implications, relocation variables, benefit payouts/amounts, and marketing work.

Let the experts at WHR Global help you with your BVO or GBO home sale relocation
and other global mobility program needs

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 – view Lump Sum breakdown vs. Managed Budget
Cost of Living Assistance (COLA)
Policy Exceptions
Policy Tiers vs Core Flex Benefits