mobility news

Disclaimer: The views and opinions expressed in this article are solely those of the authors and do not necessarily reflect the official policy or position of WERC.

Consumer choice has surged in the past 30 years, buoyed by the internet and the easy access to information it provides. This empowerment has given the average consumer the confidence to make informed decisions about products and services, effectively lifting the veil of mystery on consumerism.

In the context of employee relocation, this consumer empowerment translates to transferees wanting to choose their own real estate agents for buying or selling homes. However, this choice brings a unique set of challenges for relocation management companies (RMCs) and real estate brokers.

Employees now crowdsource information and visit platforms that share industry norms and resources. The advent of requesting real estate agents in the relocation homebuying and selling process makes sense. Employers likely thought, “If we let our transferees choose their own real estate agent, then they can’t complain about them, and they will feel more in control.” This logic acknowledges that the relocation process can be overwhelming for a family, making it easy to feel out of control.

An RMC representative noted, “[Transferees often] complain on their final survey if they are pushed to utilize our preferred broker. If anything goes awry or they do not get the value for the home they expect—even if that dollar amount was never realistic—[they express dissatisfaction].”

Challenges for RMCs and Real Estate Brokers

There is a lack of hard data on employee satisfaction when an employee chooses their agent during a relocation instead of using a trained relocation agent recommended by their RMC. However, the downstream challenges providers face based on those choices are undeniable.

It’s the dreaded call: The RMC consultant is letting a relocation coordinator of a real estate company in their preferred broker network know that one of their agents has been “requested” by a transferee. Sometimes, this notice comes via email or portal message without details of the agent’s relationship with the transferee. While a new referral is welcome, there might be pushback from the agent, making the management of the process more difficult. After all, agents are accustomed to bringing new opportunities to the company, not the other way around.

Understanding the Requested Agent Relationship

Understanding the relationship between the transferee and the requested agent is crucial. The transferee may be a past client, a friend, or they may have found the agent online. They may have just seen the agent’s sign in their neighborhood. The type of relationship matters. Real estate agents invest years cultivating and nurturing their relationships. When they receive a call from their relocation department informing them that one of “their” clients is now part of a relocation, it can be a significant challenge to grasp, especially if they lack an understanding of the overall process.

If a non-relocation-trained agent is requested, it is essential to determine if the agent and transferee know each other. Sometimes, it is not the transferee who requests the agent; it is the RMC that may have found an agent online or worked with them in the past and is now requesting them. That is why it is critical to ask a lot of questions about who and what has triggered this request at the time the referral comes in.

It is imperative to call and speak with the agent immediately to understand where they are coming from and align yourself with them so there is mutual respect and understanding. This will help ensure that this process is going in a positive direction. If it is a previous client with whom they have sold multiple homes, the reaction will be significantly different if they have never met the transferee.

Many RMCs have corporate clients that require their employees to use relocation-trained agents and state so in their company relocation policies. But there seem to be mixed opinions about how much some companies adhere to those policies. It may vary by organization, client, or consultant. Putting it into policy and putting it into practice are two different things. While no one wants to deny a transferee’s request, the key is having the information and tools for the mobility or RMC consultants to explain to them why the process is the way it is. Helping them understand how it might negatively affect them and the value of a trained agent in this highly controlled environment is a critical part of the benefits discussion.

How to Get Everyone in Lockstep

Sometimes, by the time the relocation department gets to the requested agent, they may have already been alerted by the RMC or the transferee that this will be a very different transaction than they are accustomed to facilitating and that a referral fee will be attached. If relocation departments can prepare their branch managers and leadership to understand what happens when a client becomes a transferee, then there can be a middleman to help dial down the temperature.

Working with some agents is easier than with others. We can only do our best to keep everything on the right track and put ourselves in their shoes. It means trying to stay in the neutral zone through education and advocacy. If the requested agent is a newer agent, a high-producing agent, or one with no experience working with a relocating transferee, our work may be cut out for us. Taking a leadership position to help all stakeholders associated with the real estate portion of the move is in the best interest of everyone involved. But when you mess around with preexisting relationships and people's compensation, it can get ugly pretty quickly.

The Telephone Game Gone Wrong

The key is to prevent the requested agent from going to their customer and complaining. If that happens, the transferee will go back to their employer and complain, and then the employer will call the RMC, who will contact the relocation director. If the relocation director and staff can’t get in front of it, it can set off a challenging chain of events. It becomes crisis management, which may set the entire process off on the wrong foot.

Contrary to some consumer’s beliefs, all real estate agents aren’t cut from the same cloth. Many don’t handle referrals because they don’t want to pay referral fees. Some don’t like the paperwork. Some don’t want to be told how to sell a property or to be managed by the RMC on the required process or how much to list it for. Compensation may have already been established between the agent and the transferee by the time we get involved. There is typically a reason they are not on the relocation team. It doesn’t mean they aren’t a good agent; they may not have the appetite or temperament for this type of business or may not qualify based on the company or RMC’s eligibility requirements of experience or production.

The relocation director and staff must monitor the transaction and guide the agent through every step to ensure it does not go sideways, which can happen quickly and leave little room for recovery. Sometimes, when the transferees have not been properly counseled about the processes outlined in their benefits, the requests for referral fees surface far along in the process after the home is already listed or the agent has spent a significant amount of time touring the transferee, adding an extra sting to the agent.

Survey Insights

We sent out a four-question survey to an email list of about 900 relocation directors and also posted the survey link on LinkedIn. That group included Relocation Directors Council members and many other directors throughout the U.S. Here are some of the results:

• 23% of respondents felt that requested agents always created a challenge in their organization.
• 58% said they did sometimes.
• 19% said they did not cause a challenge.
• 26% believed that requested agents were becoming more prevalent
• 60% thought they were about the same.
• 13% thought they were less.
• 1% didn’t know.

Relocation directors have stories—a lot of them. Many reflected on times when the requested agent didn’t follow protocol and jeopardized the transferee's benefits, which then somehow reflected negatively on their own survey results. One misstep can cause a ripple effect in various ways, including a poor service evaluation rating, which causes a larger issue for the entire brokerage and possibly the RMC.

The term that was repeated over and over in the comments of the survey results was “hand-holding.” This describes the micromanagement needed by the staff, a branch manager, or leadership to ensure the requested agent doesn’t derail the entire process. The additional time and manpower to facilitate these referrals is significant, and often, the brokers don’t charge their usual fees on these, so they may service them at a loss. At a time when resources are thin, this can put a significant strain on the brokerage.

Some real estate companies mentioned they add clauses to their independent contractor agreements or company policies stating that the agents must comply with the referral fees if this situation arises. While that forces compliance, it doesn’t relieve the irritation often felt by the agent. Other directors said they offer on-demand or live crash course training for the requested agents. Another tip is to train the agents to ask any client they meet with if they are moving for a job, which can uncover the transferee’s status at the start of the process.

Many directors mentioned that some requested agents intentionally created a rift between the transferee and the RMC by challenging their involvement and the process in an attempt to eliminate the RMC and relocation department oversight and potentially avoid paying a referral fee. The challenges created by noncompliant agents can pose legal, financial, and compliance challenges for the brokerage, transferee, RMC, and the corporation. Keep in mind that, typically, less than 15% of the brokerage agent population is on the relocation agent team. That percentage varies based on the size of the brokerage and the amount of referral business received.

Other Thoughts About a Requested Agent Situation

“The agent allowed early occupancy of a property, but the transaction fell through, and we couldn’t get the people out.”

“Used their own vendors for property repairs without RMC approval.”

“Our requested agent assumed they were getting the listing and didn’t take the time to go over their marketing plan. The other agent came prepared and got the listing.”

“We had an agent requested for a listing in an area in which he was not an expert and would not relinquish the referral. The sellers ended up not even meeting with him, and we completely lost the opportunity.”

“The requested agent followed the client's wishes to list the property at a very high price without concern for whether it would sell. They took their buyout, and the RMC changed brokerages, so the agent and our company lost this listing altogether.”

“The requested agent caused problems by not reporting a sale or a delay in closing, which delayed the move, required more temp housing, delayed school registration, etc.”

“We have had agents that offered to reduce their commission in lieu of the benefits or to pay the referral fee outside of the program.”

“The agent allowed the transferee to sign the contract. Our brokerage ended up paying for the gross-up.”

“Agent introduced their own lender and title company instead of the approved providers.”

“I’ve had top agents threaten to leave the company if they have to pay the required referral fee, so my department paid it.”

Several directors mentioned that, due to missteps by their requested agents, they would lose business from the RMC or that corporation in the future, even though they had warned of the challenges of using an untrained agent. While some of the above scenarios could certainly happen with trained relocation agents, the likelihood is slim, as the relocation agent has been trained to ask a lot of questions before acting if they are uncertain how to proceed. A relocation-trained agent will work diligently to support the relationship with the source of business because they want more referrals. Independent contractors can be very hard to control.

A respondent posed a great question in the survey comments: “Rarely does an RMC allow transferees to choose their own immigration attorney, corporate housing, or household goods mover. Why does the RMC not have the same standard for working within its own broker network?”

We can assume people are less likely to personally know an immigration attorney versus a local real estate agent, but it causes one to pause, especially when the corporation is funding the benefit.

RMC and Corporate Feedback

Most RMC representatives we spoke to said they would not offer the option for requested agents if the corporate client did not allow it.

An RMC representative said that one of their biggest challenges is that the requested agents often list the properties too high to appease the transferee, causing delayed sales and possible buyouts.

“The employee was asked to sign a buyer broker agreement by their requested agent. The agent told the employee they will put $0 or TBD in the compensation agreement, which is unenforceable and provides no referral fee opportunity for the RMC,” said an RMC representative. This is also a violation of the NAR settlement agreement. Now, more than ever, it will be imperative for the RMC to counsel the transferee on their benefits upfront and what is not allowable.

When asked if they feel the changes coming with affect the use of requested agents, one person said, “We see daily that non-network brokers/agents do not have the training and resources to manage through these myriad changes, and the importance of firms with relocation departments will be critical to ensure we are compliant and successful for the employee and their employer.”

A corporate global mobility executive who requires that their transferees use the preferred broker network to abide by the terms of their referral arrangement with their RMC said that they felt like whether the transferee chose the agent would have little effect on the satisfaction rating. They felt the satisfaction rating would be the same (negative or positive) whether the agent was transferee selected or RMC assigned.

The Upside

By keeping a pulse on the process and being readily available to support a cooperative and compliant requested agent, you may find some great emerging talent who could be a future candidate for the relocation team.

“It would be very easy to go down the rabbit hole with bad experiences, but I want to share a positive one,” said one relocation director. They went on to say that they had a requested agent who was excited about the relocation referral as a “new experience.” There was a devasting storm during the BMA process and then again during escrow. The agent jumped into action and supported the transferee’s family in multiple ways by helping them find housing, taking their perishables, and helping with vendors to avoid an insurance claim, going above and beyond what they needed to do. The director said, “After we closed, the RMC consultant reached out to say it was the best ‘requested agent’ transaction they had ever had and to thank the agent.”

What Can Be Done to Ensure the Employee Experience Is Sound?

Allowing flexibility for the relocation director to determine who is the right fit for the relocation team can ensure compliance and control. Relocation directors have a keen sense of whether agents are in it for the right reasons. The relocation staff knows their agents and is equipped to decide the best fit in most cases, and they can collaborate internally with leadership if they are not. The relocation director knows the inner company procedures and if the agent is compliant. They know their production and even their personal situations, which are not typically known or discussed externally.

When agents join the relocation team in their brokerage, they commit to specific performance metrics and training. They may be asked to leave the team if they don’t maintain performance levels and high standards. Because real estate agents are independent contractors and not employees, the relocation staff has little control over them unless they have signed on to comply with the relocation team’s requirements. Team agents have opted into the requirements, which allow the brokerage to hold them accountable.

Experienced Relocation Agents Working With Corporate Moves Have These Essential Qualities:

• Flexibility in personal style and temperament
• Willingness to adhere to procedures
• Open to guidance during the process
• Strong negotiation skills and market knowledge
• Detail-oriented
• Understand the time commitment to complete paperwork
• Spend the time needed with these types of clientele
• Adhere to short timelines
• Achieve specific performance metrics
• Have good survey results on relocation clients
• Attend all recurring training and pass background checks
• Collaborative in nature
• Sell enough to be an expert in their field
• Willing to pay the required referral fees
• Understand the mission
• Provide quality and empathy in all aspects of the process

What Does the Future Hold?

As we face the rapidly changing real estate process due to the NAR settlement, it will be critical to ensure the transferee and their family have an experienced professional to guide them through the new challenges. While transferees may think all real estate agents and transactions are the same, as professionals, we know the importance of not leaving the selection to chance. Using high-quality agents and brokerages is more important than it has ever been. Listen to the relocation directors. They have the experience and insight to help navigate these changes. They are a trusted adviser for the transferee, their employer, and the RMC.

It is imperative that corporations and the relocation companies facilitating the move understand that while the concept of requested agents may make sense in theory, the logistics of managing an untrained agent can be quite complicated and costly. By educating the transferee on why specific agents are hand-selected to provide this service, we can rest assured that the process will progress as expected, ensuring compliance and an excellent employee experience.