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Wakum Mata!
Politcally Incorrect Musings
25th-Apr-2006 09:25 pm
Okay... The new employer screwed up and didn't realize that I don't actually live in Tucson and will have to relocate. I received a relocation packet today. There is a thing called a BVO, or Buyer Value Option, which they apparently want me to use. Huh?

A BVO is when you want to sell your home and you let a third party (set up by your new employer) put it up for sale. You get an offer and you don't sign it, but then send it to the third party. They review it and then give you the money. You have just sold your home to the third party, not the one making the offer. The third party then sells your home to the other party.... or something like that.

I read the agreement several times and am very confused.

There are apparently some tax consequences associated with it, too. Could someone explain this BVO thing in Modern American English? It is far too esoteric for me. So far, Google ain't helpin' me.
26th-Apr-2006 10:53 am (UTC)
So your house would become what they call a "relocation house".
We looked a one or two of those.
I will ask Morgan if he can explain it in some less then technical terms.
26th-Apr-2006 12:49 pm (UTC)
I was going to say ask Morgan lol, he is the wiz at this stuff :)
26th-Apr-2006 02:06 pm (UTC)
If it works the way it worked for my Sister at Ford, the third party basically buys you out of your house. You get the appraised value (I believe) of the house, then the third party actually does all the selling of the house. It's a great deal, especially if the housing market isn't very good in the area (my sister sold both her houses in KY and MI that way.)

Yes, there are tax implications. All $$$ the company spends on your relocation is taxable income for you.

Morgan will know better, and I'll be curious to see if I am right.
26th-Apr-2006 02:39 pm (UTC)
I think in essence it makes sure you house gets sold so you can relocate much more quickly and easily...be lucky you didn't get the college hire package...it bit cookies. I could only move 5000lbs of stuff and my piano was almost 1000 of that...
26th-Apr-2006 03:16 pm (UTC)
Please talk it over with my mom before you decide anything. She would be able to give some insight on it :)
26th-Apr-2006 07:35 pm (UTC)
Please, email me her number.
26th-Sep-2007 03:47 pm (UTC) - A BVO Is...
Anonymous coward
Employers Help Workers with Real Estate
By Holden Lewis

It's never easy to sell a home and move long-distance. When you relocate, either for your current company or to take a new job, your employer might help you sell your house.

Employers, often through relocation companies, offer three basic levels of service. From least to most lavish, they are:

Marketing assistance;

Buyer value option;

Guaranteed offer.

The transferee's employer decides the level of service. It often depends on where the employee stands in the company hierarchy. "A higher level may get a guaranteed buyout, and a lower level might get a buyer value option or marketing assistance," said Lina Paskevicius, a consulting manager for Cendant Mobility.
Whatever the level of service, the goals are to keep the worker productive and to reduce taxes for both the employee and the company. Some employers perform the relocation work out of their human resources departments, but most hire relocation companies to attend to the details.

How does a transferee benefit from that expertise? It depends on the level of service. A lower-tier employee might receive marketing assistance only. Commonly, the transferee will be assigned a consultant from the relocation company who will explain the relocation policy and benefits, help select a real estate agent, pick an appropriate asking price and offer advice on staging the house to make it attractive to prospective buyers.

The relocation consultant acts as a liaison between the seller and the real estate agent, ready to apply a little social lubricant. "Oftentimes," Paskevicius said, "it's easier for a third party to tell a transferee that they've got to get rid of that orange wallpaper."

In this basic level of service, the transferee sells directly to the buyer. With the next level of service, the buyer value option, the transferee finds a buyer and negotiates a selling price. Then the transferee sells the house to the relocation company at the agreed-upon price. The relocation company turns around and sells to the buyer at that price.

This convoluted approach saves taxes for both the seller and the employer. The seller doesn't pay a real estate commission, which means that the employer doesn't have to reimburse the seller for it. That's good from the seller's standpoint because he or she would pay income tax on the reimbursement.

For sellers, other benefits arise from using the relocation company as a middleman. All the seller has to do is find a bona fide buyer who genuinely intends to purchase the house. If the deal falls through after the relocation company has bought the house, or if the buyer has to delay the closing for some reason, it's the relocation company's problem. Typically, closing is done by mail and the transferee receives the equity within a week.

27th-Sep-2007 12:05 am (UTC) - Re: A BVO Is...
Thank you, Anonymous from Knoxville.
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