RSC Home Sale, Purchase & Housing Assistance 2 — Questions and Answers
Question 1: Under the ERC Homesale Program, what is the primary purpose of the Amended Value Offer (AVO)?
- To allow the employee to negotiate directly with a buyer
- To provide a second offer when the property does not sell at the appraised value within the guaranteed offer period (Correct answer)
- To increase the guaranteed offer after a market appraisal update
- To allow the employer to reject the initial appraisal
Correct answer: To provide a second offer when the property does not sell at the appraised value within the guaranteed offer period
The AVO is issued when the property has not sold at the guaranteed offer price, giving the employee a revised offer based on current market data.
Question 2: Which document must a relocation management company (RMC) obtain before marketing a relocated employee's home?
- A power of attorney from the employee
- A signed homesale agreement and deed transfer authorization (Correct answer)
- A broker opinion of value (BOV) only
- A municipal certificate of occupancy
Correct answer: A signed homesale agreement and deed transfer authorization
The RMC must secure a signed homesale agreement plus deed transfer authorization to legally take title and market the property.
Question 3: When calculating a home purchase assistance benefit, which closing cost is typically NOT reimbursed by a corporate relocation policy?
- Loan origination fee
- Title insurance premium
- Discount points paid to lower the mortgage rate beyond policy limits (Correct answer)
- Attorney or settlement fee
Correct answer: Discount points paid to lower the mortgage rate beyond policy limits
Discount points exceeding the policy cap are generally considered an elective cost and are not reimbursed under standard corporate homepurchase programs.
Question 4: A transferee's home has two independent appraisals of $320,000 and $340,000. Under standard ERC guidelines, what is the guaranteed offer?
- $320,000
- $330,000 (Correct answer)
- $340,000
- Average rounded up to nearest $500
Correct answer: $330,000
ERC guidelines specify the guaranteed offer equals the average of the two appraisals, which is ($320,000 + $340,000) / 2 = $330,000.
Question 5: Which federal law prohibits an employer or RMC from directing a relocating employee to use a specific real estate agent or mortgage lender as a condition of relocation benefits?
- RESPA (Real Estate Settlement Procedures Act) (Correct answer)
- ECOA (Equal Credit Opportunity Act)
- TILA (Truth in Lending Act)
- HUD Reform Act
Correct answer: RESPA (Real Estate Settlement Procedures Act)
RESPA prohibits referral fees and kickbacks and prevents coercing buyers to use particular settlement service providers.
Question 6: What is the typical purpose of a 'loss-on-sale' benefit in a corporate relocation program?
- To compensate the employee when the home sells above the guaranteed offer
- To reimburse the employee for the difference when the home sells below the original purchase price (Correct answer)
- To cover real estate commission only
- To fund marketing costs incurred by the RMC
Correct answer: To reimburse the employee for the difference when the home sells below the original purchase price
A loss-on-sale benefit covers the financial gap when a transferee must sell their home for less than they originally paid, protecting them from market depreciation.
Question 7: In the Direct Reimbursement homesale model, who is responsible for listing, marketing, and negotiating the sale of the transferee's home?
- The relocation management company
- The employer's HR department
- The transferee themselves (Correct answer)
- A court-appointed trustee
Correct answer: The transferee themselves
Under direct reimbursement, the transferee handles their own sale and is later reimbursed for eligible expenses, unlike the BVO/GBO models where the RMC takes title.
RSC Home Sale, Purchase & Housing Assistance 2
Under the ERC Homesale Program, what is the primary purpose of the Amended Value Offer (AVO)?