Relocation homes hold bargains Corporate owners upgrade houses, want to negotiate.

November 01, 1991|By Kevin Thomas | Kevin Thomas,Evening Sun Staff

When Michael and Kristen Mordenti decided to buy their first home, they were disappointed to discover that, despite a withering recession, new-home builders weren't willing to negotiate on price.

When the Mordentis turned to resales, they discovered a seldom-considered segment of the market where sellers are almost always motivated to negotiate and the properties are often upgraded to look like new.

In June, the Mordentis purchased a three-bedroom Victorian in Baltimore for $17,500 less than the asking price. The house had been freshly painted, the hardwood floors refinished and the upstairs bedrooms wallpapered.

Part of the discount the Mordentis got was undoubtedly a result of the currently soft real estate market. But many experts would also say that the young couple got a good deal because they chose to buy a relocation property.

Such properties -- those that are being purchased and resold by the employer of a mid- to upper-level executive being transferred out of town -- may be the safest and best buys available today.

At a time when agents complain that too many buyers expect homes to be priced unreasonably low and sellers aren't obliging them, relocation homes may be a good alternative.

"I would recommend to anyone buying a home right now, tell your agent you want to see all the corporate listings," says Nancy Sack, Coldwell Banker's director of relocations for the Baltimore and Washington areas.

Sack says the corporations selling such homes -- usually through a real estate agency such as Coldwell Banker -- want to sell them as quickly as possible to avoid the high monthly carrying costs associated with such properties.

Relocation homes come on the market when a company is transferring an employee and decides to purchase the employee's home. The market value of the property is determined by averaging the results of at least two appraisals.

Once the home is sold, the purchasing company takes over responsibility for mortgage payments and the costs of maintenance and repairs.

Those carrying costs usually amount to 1 1/2 percent of the price of the home for each month it is on the market, says Sack. On a $300,000 house, that comes to approximately $4,500 a month that the corporation must foot.

"The advantage to the buyer is that the the property is going to be realistically priced and the seller is going to be a motivated corporation," she says.

Also, unlike homeowners who are emotionally involved in selling their homes, corporations have no such attachment. It would not unusual for that same $300,000 home to sell for $280,000 in very short order, Sack says.

The recession has made relocation homes very attractive at the moment, says Desiree Kaminski, relocation manager for Prudential Preferred Properties.

Kaminski says that interest in relocation homes is highest among executives who are moving into the area.

"I'm getting a lot of transferees," she says. "Agents from all of the large companies are calling me on a regular basis saying, 'What do you have in a certain price range?' "

While relocation homes can range in price and style from $70,000 condominiums to $500,000-plus executive homes, more than 60 percent of the properties are listed at $200,000 and above, Kaminski says.

The deals are good, but the biggest selling point is the condition of the home, she adds. It is not unusual for a corporation to order major cosmetic work done to a home to move the property quickly.

As an apparent testament to their attractiveness, relocation homes sell faster than other resales.

The average relocation home listed through Prudential sold in 60 to 62 days during the last six months, Kaminski says.

That compares favorably with the pace of other settlements. The Greater Baltimore Board of Realtors reports that more than one-fourth of all resales in the Baltimore area this year took 90 days or more to sell.

And PHH Homequity Corp. in Wilton, Conn., one of the largest relocation companies in the country, says that nationally an average corporate listing sells 34 percent faster than other resales.

The fact that most relocation homes have been heavily inspected and appraised before a potential buyer sees them may be a factor in how quickly they go to settlement, experts say.

Mary Collins, Long & Foster's relocation director for the Baltimore and Washington areas, says the inspections are just another factor in favor of such homes.

"People have taken such a long, hard look at this property up front," says Collins, adding that potential buyers are usually shown copies of all inspection reports about a home.

Often those reports cover such things as general home, termite, radon and asbestos inspections.

"For the buyer, it means getting a known quantity," Collins says. "If they're new in the area, and they don't know that older homes in Baltimore have a problem with asbestos or that radon is a problem in Western Maryland, they really should be glad to know that up front."

Collins is more coy on the question of whether a buyer can get a "steal" on a relocation property.

"Will a company give it away? No," Collins says. "But time is money. It's a business decision for them. They can step back and look at the situation because they're not emotionally involved."

Of course, the buyer may feel differently.

First-time home buyer Michael Mordenti says he doesn't really know how great a deal he got on his relocation house.

But there were other considerations.

"It really was an emotional decision," he says. "My wife and I walked in and we both said, 'We love this house.' "

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