Currently, I am working with one of my buyer clients purchasing a relocation listing. It isn't the same as a regular listing. If you happen to fall in love with a relocation listing, here are the 7 points I want you to be aware of.
1. The homeowner is no longer the seller of the transaction. Okay, so who is the seller then? Instead of dealing with the original homeowner, the relocation company is the seller on the sales contract. The original homeowner pretty much has nothing to do with the listing at this point. The listing agent will forward all the negotiations and agreements to the relocation company. All the negotiations and agreements are done verbally.
2. There will be no option period. So does it mean that the buyer can't inspect the property? No, the buyer can have a home inspection done within 10 days after the contract is executed. In case of any repairs, they must be put in writing for the relocation company's approval. Depending on the relocation company's policies, the repair allowance may vary.
3. The seller's disclosure is blank. There will be 2 sets of seller's disclosures. The original homeowner is required to fill it out with her best knowledge of the property. The relocation company signs it as the buyer of the transaction. The second set is blank because the relocation company is the seller and it has no knowledge about the property. My buyer client needs to sign it and he is allowed to review the first set for information purpose only.
4. Earnest money is more than 1%. Since it is a relocation listing, the relocation company can ask for whatever they want reasonably. In my case, the earnest money for my buyer client is 2% of the purchase price.
5. All the required documents must be perfect. What I mean is that all the information, intials, signature fields must be correct. If there is one mistake on one of the documents, your buyer agent must have to redo the entire set of paperwork. It is simply because the relocation company wants everything to match, especially when it comes to the time stamps on all the paperwork if it is signed electronically. It can be more work for your agent and he/she may need extra time to go over all the documents before you review and sign them all.
6. There will be more paperwork. Since the relocation company is the seller, it is no surprise to expect more paperwork for the transaction. Luckily, most of them are just for your information purpose only. You may not have to sign 100 pages of documents.
7. It may take longer to close the transaction. Whether the buyer is going to pay for the property with cash and he/she totally expects to move in to the home in less than 3 weeks, there is a very great chance it wouldn't happen. Keep in mind that the paperwork will be forwarded to the listing agent. He/she will have to review everything. Depending on how busy the relocation company gets, it may take up to a week or so to get a reply from them.
Well, now as a buyer, you know very well on what to expect when you are pursuing a relocation listing. My advice is to follow your agent's instructions and be very patient with everything.