When it comes to relocation, one might argue that it’s a Relationship lead source, not an Inbound lead source. But, when I thought to categorize it under Inbound, I was thinking about how Relocations sometimes just fall out of the sky. They come to you. Plus, some agents might be at a company that has a relo department that handles the relationship for them. So, this one probably deserves two tags – one for inbound and one for relationship.
What is a relocation?
Large companies might offer employee benefits that include a relocation package. If the employee is asked to move to another town, state or even country, the employer will possibly off set some or all the costs. It helps relieve the financial burden they’re placing on the employee. Nice perk, right?
But, not all relocation packages are the same. And, not every employee gets the same benefit.
Many relocation companies have preferred service providers (yes, based on relationship!) that they want their employees to use when they list their house for sale. That’s because the relo company has negotiated a referral payment or kickback out of the agent’s commission. Relocation fees are typical around 39.5% of the agent’s split.
WOW. Let's do some math on that.
Cost Breakdown
For this example, let's say you're working a listing that has a sales price of $300,000. And, your going commission is 3% of the sales price. Just for example.
And, that doesn't even take into consideration any marketing expenses you might have had.
In my opinion, relocation listings aren’t worth the trouble. Honestly, you’re signing up to do a ton of extra work – for almost half the pay. But, if your book of business is small, it’s a great way to have business handed to you (aka inbound lead source).
Relo companies might have strict requirements on how you handle the listing. Some are known to want a BPO (broker price opinion [fancy way of saying market analysis]) done on a weekly basis. They might be more involved in your pricing strategy than other sellers.
Some relocation companies will buy out the owner of the house. They have a contract agreement with the employee that they “guarantee” a certain price for the house. Usually, the relocation company will want the house listed for 60-90 days (varies) and hope for an offer. But, if they don’t get an offer that’s one of the employee perks - relocation will buy the employee out.
Often, once a house is bought by a relocation company, they will have it re-listed with another agent or agency. No guarantee you’ll get that listing back.
Personally, I think your time is going to be better spent on any number of other lead sources. Relocations don’t really help you build your database because those people are moving OUT of your town. Sure, the potential for referrals is nice, but let’s get real – they’re moving on. And, for your time, wouldn’t it be nice to actually get paid full commission instead of 60.5%?