Costly Moves: Given the ongoing mess among the nation’s subprime mortgage
industry, it’s hardly surprising that companies are spending more to relocate
their employees. With home prices in some areas falling precipitously,
organizations are “adjusting their relocation policies” to help employees sell
their homes, including absorbing up huge losses on resale, according to The Wall
Street Journal.
The Journal reports: “The most generous companies are buying employees’ homes
from them at an appraised value, often determined by averaging two or three
appraisals from real estate professionals and reimbursing the employee the
difference—or, more often, a portion of it—if the price is lower than what the
employee originally paid. The company will then resell the house—often at a
loss. And because homes are selling slowly, some companies that offer this
benefit are seeing their inventory of unsold homes climb.”
According to the Employee Relocation Council, a trade group in Arlington,
Virginia, corporations spend more than $32 billion on relocation corporations
annually—with companies spending an average of $13.5 million each year to
transfer workers.
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