When establishing a mobility policy, one of the decisions Human Resources (HR) will need to make is whether to require their transferring employees to use their Relocation Management Company’s (RMCs) network of agents. In last week’s blog we discussed the role that agent referral fees play in reducing the overall cost of the mobility program for the company. Today’s blog covers potential dynamics that could occur when a relocation policy allows transferees to use licensed relatives or close acquaintances as their real estate agent. I’ll also review how relocation agents are different from non-relocation agents.
Dynamics that could occur if using a licensed family member or friend as a realtor include:
Emotional attachment: An emotional attachment can impact decisions by making people more likely to focus on their feelings instead of facts and logic. They may be more likely to act impulsively, overlook potential drawbacks or pay more than they should for a property or service because of their personal relationship.
Unequal expertise: The transferee’s friend or family member may not possess the same level of knowledge and experience as a real estate agent who specializes in relocation. This could potentially lead to errors or missed opportunities that could affect the outcome of the transaction. Given that a home is usually a persons’ largest financial investment, it is wise to position the transferee for optimal success by enlisting an agent with substantial expertise in real estate. And given that a transferee is relocating, it’s also wise to secure the services of an agent who is an expert in relocation.
Conflicting interests: When working with a friend or family member, there chance of conflicting interests and priorities increases. This may make it difficult for the transferee to negotiate and make decisions that are in their best interests. If something goes wrong with the transaction, the transferee has the option to escalate. However, if the agent is a friend or family member, the transferee may feel uncomfortable escalating the issue to a broker or involving a lawyer, especially if it could negatively impact their personal relationship. This may lead the transferee to prioritize their relationship over financial considerations, which may not be the case if they were working with an external agent.
Strained relationships: Conflicting interests and missteps can lead to communication breakdowns, misunderstandings, and hurt feelings. This could cause challenges when negotiating important details of a real estate transaction. If the transaction doesn’t go as planned or there are disagreements along the way, it could put a strain on the transferee’s personal relationship with their friend or family member.
Many corporations write specific language into their mobility policies requiring transferring employees to utilize the RMC’s network. This policy reduces potential conflict of interest and eliminates situations where a transferee may feel pressured or obligated by their personal network.
Here are some reasons why your transferee should utilize your RMCs network of agents:
Increased oversight and support: In comparison to conventional agents who typically have only one level of oversight and support from their broker, relocation agents have the support and oversight of up to three different parties: their broker, Relocation Director (RD), and their RMC. The agent, broker, RD and RMC work together as a team to support your transferee.
(An RD hand picks agents in their brokerage for the relocation team. They assign referrals to them based on expertise. They oversee the referral, manage and coach agents. If the agent doesn’t perform, they may remove the agent from the team. They attend industry events and are well rounded on relocation policies and dynamics, which enables them to better train agents to understand these dynamics as well.)
Motivation: Relocation agents may have greater motivation to perform at a higher level than conventional agents, since they receive repeat business from their RD. If a transferee is not satisfied with their service, the relocation agent may not receive another relocation referral. Since agents rely on closed transactions for their income, they are usually very focused on performing well for referral sources. In contrast, conventional agents may not view the transaction as the same potential source of repeat business so may not assign the same level of importance to it. This is because the transferee went direct to the agent instead of the agent receiving the referral from a repeat source of business.
Relocation is a specialty: Many consumers believe that realtors are all similar, but the reality is that they have different skills, focuses and training. For example, relocation is a specialized industry that has its own training and certifications. Transferring employees usually need a higher level of support from their agents due to the need to be in their new location quickly while wrapping up their housing details in their old location. Delays could dramatically impact duplicate housing costs. There are also financial implications related to tax-protected home sale programs that require expertise and knowledge to navigate. By working with specialized relocation agents, transferees will receive the highest level of expertise and support specific to the unique needs that come with a relocation.
Trust through depth of experience: Your RMCs network agents are local to your transferees’ market and understand the dynamics of where they’re looking to sell or purchase. The network is made up of award-winning national, regional, and local brands. Partner agents and RDs have proven their ability to help thousands of transferees each year with their real estate needs. A transferee could find a local agent online and trust online reviews or they could put themselves in your RMCs experienced hands to connect with a network of relocation agents and RDs who have built trust through thousands of successful relocation transactions.
Real Estate is the most significant part of your transferring employees’ relocation experience, regardless of whether the transferee receives real estate benefits or not. The best agent is most likely one that can give impartial advice, full representation, and open communication. Many employers write the requirement for their transferring employees to use their RMCs agent network into their mobility policy. This removes the burden of choice from the transferee, who may not have the adequate time or experience to make an informed decision and prevents potential conflict of interest that could arise from using a family member or friend.
