 An estimated 44 million people moved last year. About
42 percent of the moves were job related. Corporate downsizings and
consolidations are uprooting more families each year as employees fear
turning down jobs in a weak economy.
Relocation has become the watchword in American business.
Weichert Realtors, a nationwide company based in Morris Plains, New Jersey,
with sales volume topping $10.5 billion and 225 offices staffed by over
8,000 personnel, and its subsidiary Weichert Relocation Company, Inc. (WRCI)
has become a formidable force in the relocation marketplace. As an innovator
in the 20-year-old relocation industry, it has designed, developed, and
successfully delivered a full range of services to its clients, including a
long list of Fortune 500 companies.
Relocation agents have to be sensitive to the needs and
concerns of transferring families, but at the same time be responsive to the
current economic market and industry trends.
Relocation services assist businesses in transferring
their employees from one location to another. They coordinate everything
about the move or give the client and transferee options from which to
chose. The important point is that the transferee always has options or
options with assistance.
Though there has been a nationwide drop in domestic
transfers by large corporations, there has been an increase in relocations
by smaller companies. Corporations that used to move 1,000 people a year now
move only about 200, but the number of companies that move employees has
increased tenfold. There's a growth and vitality in younger companies,
especially pharmaceuticals.
A move takes approximately four months if it’s a
homeowner who’s buying a resale. Buying a home under construction takes a
bit longer.
Because family and financial issues have made the
relocation process more complex over the last ten years, many companies who
offered considerable relocation services inhouse are now outsourcing,
farming out to a relocation company, such as WRC, some or all of the
required services, such as selling of the home, moving possessions, and
pre-marketing and home researching.
Moves are critical and must be successful. Companies have
to get their people on board and going immediately.
There are two parts to the relocation process: departure
services and destination services. While both are equally important, the
departure side is the more costly of the two.
Relocation, a process that takes up to four months and
sometimes longer, begins with the departure service. WRCI starts with its
Home Marketing Program, designed to sell the transferee's house so it
doesn't have to be sold by the corporation. Up to 50 percent of the cost of
a relocation–$47,000 per relocation being the national average--comes from
selling the house. This amount can be cut in half if the house is sold
rather than if the corporation takes it into inventory.
Corporations used to buy back houses. This has been cut
back today using the pre-purchase appraisal, though some companies are still
doing it. Companies tightly manage this process, using every available
marketing technique to intensely market with the average selling time being
about 120 days. Agents also show transferees a video on pricing a house
properly so that the house has a better chance on the market.
The typical departure service also covers the moving of
possessions and a temporary living allowance. Many businesses have contracts
with major moving companies, but the transferee is free to use the one
Weichert offers.
WRCI's Home Marketing Program has three options: (1)To be
eligible for the Home Purchase Program, a transferee who owns his or her
home must participate in the Home Marketing Program if the company has
contracted with the relocation service; (2) the transferee is given the
option of using the Home Marketing Program and, if he does, is given a
bonus; (3) the company can suggest that the transferee learn about the Home
Marketing Program, with the corporation buying the home directly or through
a third party.
Transferees are given options, but they must use the Home
Marketing Program if the company mandates it, since it's tied to benefits
offered by the corporation. In the pre-marketing program, we suggest that
the transferee use two brokers, each doing their own market analysis. It's
like getting a second opinion from a doctor. But once the home becomes part
of the Home Purchase Program, the relocation company sets everything.
The next stage in the relocation process is the
destination service. Weichert uses a Benchmark Program, designed to make
sure that there's some value in the home to be purchased, thus making it
easier to obtain a mortgage. This program gives the transferee all the
questions to ask, such as: Is there an electromagnetic field, a dump, or
railroad tracks nearby? Is the transferee paying more for the house than is
needed in that market? Are there good schools nearby? Using these and other
questions, transferees can make educated decisions for themselves.
In our destination service, we line up and evaluate
agents, thus easing the burden on corporations and their employees. We are
unique in the relocation industry in our selection of completely independent
real estate brokerage services, utilizing only market-dominant brokers
nationwide. We also help the family find the community best suited to their
needs.
Tax laws due to change in 1994, thus raising the cost for
relocation.
Companies with an expertise in consumer products or other
areas have become increasingly frustrated with attempting to administer and
track employees relocation expense reimbursements for the IRS. Last year,
77.6 percent of all transferees were fully reimbursed for their relocation
expenses, according to the American Movers Conference. Over 51 percent
needed to make at least two expense-paid trips to find new housing. The
problem is further complicated by recent announcements by the IRS that these
payments must be reported to the IRS when paid with the required tax
withholding. A corporation which waits until the end of the year to do this
isn't in compliance with IRS regulations.
While the departure and destination services help
transferees, WRCI's Financial Administration Program helps companies,
themselves. The corporation need only to provide its policy statement and a
written authorization for each employee entering the program. Expense
reports are routed directly to WRCI and processed for payment. Any gross-uptax
on tax) and tax withholding is calculated and reported to the corporation's
payroll department. Each month the corporation receives an itemized report.
Relocation has become a constant in business today. At the
same time, it's also become more complex. The stress and problems associated
with moving are compounded by intricate tax laws and a drastic change in the
home marketplace throughout the country. Therefore, it's imperative that
businesses today think seriously about engaging relocation companies such as
WRCI, whether for all or part of their services
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