Anticipating a strong recovery in first-time buyer volume generated by corporate relocations, we offer these suggestions for recognizing these new customers and serving them effectively.
When employers ask their people to move for new jobs, they unpin accustomed lifestyles. Potential transferees have much to consider and decide. High among their concerns are choosing and securing a new residence in the destination area.
With housing markets recovering in much of the U.S., we see growing optimism among corporate people regarding the value of homeownership. Employees who have always been renters now look at a relocation as a timely opportunity at least to consider buying a first home, in the hope of building future equity.
For the relocation and real estate industries, this is welcome news. Corporate transferees were historically mostly homeowners, but this has declined over time. The housing crisis accelerated this trend to the degree that today’s relocations are predominantly of renters. An uptick in first-time buyers helps both near-term sales growth and a higher homeowner proportion in future repeat moves as well.
Corporate employers may benefit from greater homeownership. Intuitively, you’d expect new owners to depend more on their jobs and to be less turnover-prone. Local commitment and stronger employee engagement support lower attrition and better key-talent retention. Nonetheless, corporate mobility assistance policies have generally not been very supportive of first-time buyers. Policy benefits are most commonly based on the employee’s current residential status, i.e., home buying assistance extended only to those already having a departure home to sell. So called “needs-based” policies suppose that a current renter does not need to buy a home with company assistance.
A more progressive corporate approach, though, is to offer at least some scaled back home-buying support for first-timers, to improve transfer acceptance, turnover and perceived value.
For a real estate broker or relocation director, this is an attractive, yet very sensitive, market segment. Employers that do not support first-time buyers would not welcome your generating attention to such a policy gap. On the other hand, supportive employers would encourage higher eligible-employee utilization of the intended home buying benefits. For relocation company referrals, you should ask your RMC contact to relay to you any applicable home buying benefits for each case.
So, how can you navigate this potentially lucrative minefield?
1. Start with the customer’s needs and interests. Most renters will be determined to remain so, and this should be served, not challenged. However, exploring the possibility of first-time home buying with receptive (or even just curious) transferees can enhance your destination services.
2. Ensure that your customer understands what their employer does and does not provide for home purchases. You are not expected to know the employer’s policies, as this is the relocation company’s responsibility, but you can make sure that the employee asks all the right questions:
– “Does my personal relocation assistance package provide any home purchase benefits?”
– “If so, which of these are included, and with what limitations?”
• Buyers’ closing costs
• Lender fees and points
• Preferential mortgage products and rates
• Purchase closing administration
• Direct employer billing of costs and fees
• Temporary or permanent subsidies (COLA, Housing, Mortgage buydown, etc.)
-“Are there any policy compliance rules for home purchase benefits eligibility?”
• Broker/agent registration
• Referral fee agreement
• Listing exclusion clause
• Designated national lenders
• Pre-purchase valuation/inspections
• Others
This dialogue will ensure that the customer is aware of any company assistance and resources for which he or she is eligible.
3. Help the customers envision their adjusted buying power. A new job often brings better compensation, too. Using company benefits, the employee’s new salary and possibly a spouse’s, encourage customers to get a mortgage pre-qualification or pre-approval. At some employers, their selected national lenders offer this service to all levels of relocation eligibility and even to non-relocating employees.
4 If the stars align, make it happen. Use your local market expertise to find the right property. Getting a first-time buyer happily into an affordable home is more than a gratifying career experience—it is a business builder. It is an extra measure of service to the employer, an appreciated revenue to your RMC partners, and a life-changing gift to your customer.
Give some fresh thought to what you can be doing to find or generate more of these grateful first-timers.
John B. Sculley, SCRP, is vice president – managing director of RIS Consulting Group, johnsculley@rismedia.com.
