Featuring original art by John Bennetts.

The relocation industry is a multi-million dollar business. Whenever someone is transferred by their employer, someone with a relocation company is going to attempt to get the family to commit to their service. Even if you are not being transferred by your employer and you are moving on your own, when you list your home for sale the agent is going to attempt to get you to commit to sending a referral through their relocation company. If you accept either of these referrals, you most likely will be the loser and the referring party will be the winner.

To learn how you will be the loser and the referring party the winner, you need to understand how the industry works. When a relocation company makes the referral, the company will find an agent to assist you with your house search and purchase. Most often these relocation companies will refer you to an agent with a traditional company, one that lists homes for sale. These agents will not contract to represent only you in the transaction. In addition, when the relocation company makes the referral they will require the agent to pay a referral fee for the business. This fee often is as much as 40% of the commission that the broker and agent earn on the transaction. Many of the good agents refuse to pay these high fees, as a result you are likely to end up with an agent with limited experience.

The following is an example of how the fees are divided when working through the big relocation firms. The home buyer pays $200,000 for a home which sold with a 3% selling commission.

You should question how fair it is, when the relocation company makes more for the small service of matching the buyer with the agent, then the agent makes for all the work they do and the liability they face with providing the service.

Be aware that when transferred by your employer what appears to be a great service, may benefit one of the employer's staff more than it will benefit you. The following communication illustrates a pattern of what is a common occurrence.

These managers often will promote an agent that will represent the seller, or one that will change buyer agency status to a designated agent. It is a serious conflict of interest because he/she is using the power of his/her position to refer business to an agent that will provide an incentive for the business.

Meanwhile, the transferring employee is assuming that the employer is looking after his/her needs and referring the best real estate service. If the employer was really concerned with your needs, the employer would be referring an exclusive buyer agent.

Occasionally the employers will have agreements with relocation companies which will make payments back to the employer for each transferee who purchases a home through their referral. If this is the case, the company may have a policy which will require you to use the service or give up all moving benefits.

You should have a right to choose your own agent, and that agent should be an exclusive buyer agent. If you are told you have no choice, ask the relocation staff employee to put it in writing. Then take the document to your hiring manager and/or company president. Ask if it is the company policy. It may be that the relocation employee is receiving personal incentives to refer specific agents. If that is the case, the employee won't put the requirement in writing and you will be free to choose your own agent.