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Your Corporate Relocation Package Explained

The relocation package is a financial tool. The employee who reads it carefully before the first property tour makes better decisions than the one who discovers the coverage limits at closing.

The Core Relo Package Components

The standard components of a corporate relocation package for a homeowner: (1) House-hunting trips: typically 2–3 covered trips to the destination city, including flights, hotel, and car. The employee uses these to tour neighborhoods and visit properties. Critical: use all covered trips. The buyer who makes one trip and commits to a $1.8M property has not used the package benefit that exists to prevent exactly this rush decision. (2) Temporary housing: 30–90 days of covered corporate housing or extended stay hotel in the destination. This is the breathing room that should be used to search without time pressure. The buyer who uses temporary housing to search carefully almost always makes a better purchase decision than the buyer who skips it to close faster. (3) Moving expense reimbursement: professional mover, packing, and shipping of household goods. Typically covers one move. Storage may be covered for 30–60 days during the transition. (4) Miscellaneous expense allowance: a lump-sum allowance ($2,000–$10,000+) for incidental relocation expenses not otherwise covered.

GBO vs BVO: Home Sale Assistance Options

The two main home sale assistance structures in corporate relocation: (1) Guaranteed Buyout (GBO): the relocation company orders two independent relocation appraisals. If the appraisals are within 5% of each other, their average establishes the GBO offer price. If outside 5%, a third appraisal is ordered; the two closest values set the price. The employee is typically required to market the home independently for 30–120 days first. If no independent sale occurs, the company purchases at the appraised value. (2) Buyer Value Option (BVO): the employee uses the relo company’s Realtor services to find an independent buyer. The relo company then makes an offer based on the buyer’s agreed price, purchases the home, and re-sells to the buyer. This structure passes the commission and closing costs to the employer. (3) Which is better? In a strong seller’s market: test the open market first (BVO/independent marketing) before accepting the appraised GBO price. In a slow market: the GBO provides certainty that the appraised value will be received and eliminates the contingency problem on the new purchase. Full guide: Selling your home on relocation.

Closing Cost Coverage: The Luxury Buyer’s Gap

Closing cost coverage is the area where the luxury buyer most frequently discovers the package’s limits: (1) Standard policy coverage: most corporate relo policies cover 1–3% of the purchase price in destination closing costs, or have a flat cap ($10,000–$20,000). (2) Luxury buyer reality: a $2M Florida purchase typically generates $35,000–$55,000 in closing costs (title insurance, lender fees, prepaid items, documentary stamps). If the policy covers 1% = $20,000: the buyer funds $15,000–$35,000 out of pocket. If the policy has a $15,000 cap: the buyer funds $20,000–$40,000 out of pocket. (3) What to negotiate: executives at senior levels often have room to negotiate enhanced closing cost coverage as part of the relocation package. Request a closing cost allowance equal to 2–3% of the actual purchase price, uncapped. This is a standard ask for director and above level relocation packages and HR is often authorized to approve it.

COLA and Tax Gross-Up: The Financial Benefits Often Missed

Two relo package benefits that employees frequently underutilize: (1) Cost of Living Adjustment (COLA): if relocating from a lower cost-of-living market to a higher one (e.g., Dallas to Miami), many companies provide a temporary COLA supplement to the base salary. This matters for mortgage qualification: the COLA period and amount must be documented for the lender. If the COLA is temporary (1–3 years), the lender may not count it for long-term qualification. Clarify the COLA structure with HR before the mortgage application. (2) Tax gross-up: relocation benefits are taxable income in the US. Many companies gross up the tax liability on relo benefits (i.e., pay the employee enough extra to cover the tax on the benefit). If your package includes $30,000 in benefits without a gross-up, you owe tax on $30,000 of additional income. With gross-up: the company pays the tax. Confirm gross-up status with your HR contact before closing.

Corporate Relocation Guides: Relo Package — Search Timeline — Luxury Buying — Mortgage Qualification — Selling Your Home — Temp Housing — Agent Selection — Florida Markets

Frequently Asked Questions

What does a corporate relocation package cover for home buying?

Typically: house-hunting trips (2-3), temporary housing (30-90 days), closing cost contribution (1-3% or capped amount), moving expense reimbursement, and a miscellaneous expense allowance. Home sale assistance (GBO or BVO) for the prior home. Coverage varies significantly by company and employee level.

What is the difference between GBO and BVO in relocation?

GBO (Guaranteed Buyout): company purchases your home at appraised value after a marketing period. Provides certainty. BVO (Buyer Value Option): find an independent buyer first, then the relo company transacts. BVO can yield higher than appraised value in a strong market.

Can I negotiate my relocation package?

Yes, especially at senior levels. Common negotiable items: uncapped closing cost coverage (2-3% of actual purchase price), extended temporary housing, additional house-hunting trips, enhanced moving allowance, and tax gross-up. Negotiate before signing the relocation agreement, not after.

Are relocation benefits taxable?

Yes. Relocation benefits are generally taxable income. Many companies provide tax gross-up (paying the tax on the benefit for the employee). Confirm gross-up status before accepting the package.