CRPA CRPA Corporate Relocation Policy & ERC Guidelines 2 — Questions and Answers
Question 1: What is a 'guaranteed buyout' (GBO) in a corporate relocation home sale program?
- A promise by the employer to pay above market value for the transferee's home
- An employer's commitment to purchase the transferee's home at the appraised value if it does not sell on the open market within a specified period (Correct answer)
- A contractual guarantee that the home will sell within 90 days of listing
- A government-backed program ensuring relocation home sales are insured against loss
Correct answer: An employer's commitment to purchase the transferee's home at the appraised value if it does not sell on the open market within a specified period
A GBO obligates the employer or RMC to buy the transferee's home at the appraised value after a defined marketing period, ensuring the transferee can move forward regardless of market conditions.
Question 2: Which of the following best describes a 'tiered' relocation policy?
- A policy that offers different benefit levels based on the employee's grade, level, or position within the company (Correct answer)
- A policy that stages relocation payments over multiple years
- A policy that applies different appraisal standards depending on home price range
- A policy requiring multiple levels of management approval before benefits are authorized
Correct answer: A policy that offers different benefit levels based on the employee's grade, level, or position within the company
Tiered policies provide varying benefit packages—often more generous for senior executives—based on the employee's job level or relocation importance to the company.
Question 3: Under ERC guidelines, what action should a relocation appraiser take if the property has significant deferred maintenance that affects value?
- Ignore the deferred maintenance and appraise the property as if in average condition
- Note the deferred maintenance, adjust value downward accordingly, and flag items that may require disclosure (Correct answer)
- Refuse to complete the appraisal until all repairs are made
- Add the estimated repair cost to the appraised value to reflect the property's potential
Correct answer: Note the deferred maintenance, adjust value downward accordingly, and flag items that may require disclosure
The appraiser must document deferred maintenance, reflect its impact in the adjusted value, and flag any items that could affect marketability or require seller disclosure.
Question 4: What does 'homesale assistance' typically include in a comprehensive corporate relocation policy?
- Only the moving of household goods from origin to destination
- Appraisal coordination, marketing assistance, equity advances, and a guaranteed buyout provision (Correct answer)
- A lump sum cash payment with no oversight of how the employee disposes of their home
- Free temporary storage of household goods for up to one year
Correct answer: Appraisal coordination, marketing assistance, equity advances, and a guaranteed buyout provision
Homesale assistance is a bundled benefit covering appraisal services, marketing support, potential equity advances, and a buyout guarantee to facilitate the transferee's home sale.
Question 5: A 'lump sum' relocation policy differs from a traditional policy primarily because:
- It requires the transferee to purchase a home in the new location within 30 days
- The employee receives a fixed cash amount and manages relocation expenses independently without program administration (Correct answer)
- All benefits are paid directly to the relocation management company on behalf of the employee
- The employer guarantees to reimburse all actual expenses regardless of the total cost
Correct answer: The employee receives a fixed cash amount and manages relocation expenses independently without program administration
Under a lump sum policy, the employer provides a predetermined cash amount and the transferee is responsible for managing and spending it across all relocation-related expenses.
Question 6: In the context of corporate relocation policy, what is 'repayment agreement' or 'clawback' provision?
- An agreement requiring the transferee to repay relocation benefits if they voluntarily leave the company within a specified period after the move (Correct answer)
- A clause allowing the employer to reclaim unused household goods moving allowance
- A provision permitting the RMC to adjust the appraised value after settlement
- A requirement that the transferee repay the housing differential if home values rise within two years
Correct answer: An agreement requiring the transferee to repay relocation benefits if they voluntarily leave the company within a specified period after the move
A repayment or clawback provision requires the transferee to refund relocation benefits—often on a prorated basis—if they resign or are terminated for cause within a set timeframe post-relocation.
CRPA CRPA Corporate Relocation Policy & ERC Guidelines 2
What is a 'guaranteed buyout' (GBO) in a corporate relocation home sale program?