10. How does the 3% buyer incentive work?
If it is a cash transaction, and a loan is not involved, then Caterpillar can directly pay the 3% incentive to the buyer. However if a loan is involved then there are certain lending guidelines that must be taken into consideration. As such, a buyer can submit invoices or estimates for almost anything (must be lender approved in some cases) ranging from closing costs, to inspection charges, home repairs, upgrades, appliances, remodel projects, etc. The invoices should be supplied to their Realtor so that it gets to the appropriate people, and then AT THE CLOSING checks will be given to the buyer, made out directly to the vendor, and the buyer can then be responsible for getting those items paid for.
9. How are other non-Cat sellers going to be able to compete with the Caterpillar incentives being offered.
Personally I think it still comes down to making a home, any home, as presentable, as updated as possible and priced right for the market. All of the homes that are currently in the market right now that are Caterpillar relocation homes only represent 4.5% of the total homes for sale in the same price range. Some areas have a higher percentage, some have a lower percentage, but it’s 4.5% overall. Nothing is stopping any seller from offering a buyer incentive of sorts, and those can certainly be priced into the listing price of the home as well. While we’re very involved in this program, we have also sold many more homes outside of the program during its duration than homes within the program. No amount of incentives-on a Caterpillar home or private seller-is going to make a buyer buy a home they perceive to be overpriced for the condition it’s in.
8. How many homes are currently in the program? Where are most of them?
As of today, there are 75 homes that are currently for sale in the MSP program. This of course changes a little day by day as new ones come up and old ones go pending. They are throughout the tri-county area, with a higher concentration of them in Peoria County. Visit this article I wrote today that breaks down a lot of the data of the program and shows where most of the homes are located, which subdivisions, which school districts, etc. Of course if you would like a list you can always drop us an email or call and we would be happy to send you the most current list available and also set you up to get updates as new ones come into the program.
7. Are the offers that Caterpillar is making on the buyers homes being traded in at market price? Above? Below?
When a buyer makes an offer on a Caterpillar home subject to Caterpillar buying their home, two Realtors will be assigned to work up a report on the buyers home. Caterpillar will make an offer to the buyer within 14 days (usually) from the time they make an offer on the Caterpillar home. In over 90% of the transactions thus far, these offers have been successful and have been agreeable to the buyers making them.
6. What are some of the qualifying factors for a home to be traded in?
They are pretty basic really. It can’t have 5 or more acres. It must be priced 35% less than the Caterpillar home they are making an offer on. It cannot have an in ground heating oil tank, can’t be an income producing property or rental property, can’t be valued under $95K, can’t be a historic home or built on a hazardous site, involved in litigation or foreclosure, can’t be uninsurable or a mobile home and it can’t contain Chinese drywall.
5. What is the best way to be updated on any homes that come into the program?
If you would like to get a list of everything that is currently available in the MSP program, as well as get an email when a new one comes into the program, just let us know and we would be happy to get you set up.
4. How is this going to help stabilize the market?
This is a big question we get, and it’s certainly a well warranted and good question. These homes of transferring employees are going to be coming on the market regardless of if this incentive program is in place or not. As you can probably tell, this is a very expensive program and is definitely not a money maker for Caterpillar. While it does help decrease their holding costs in the form of trading a more expensive house for a less expensive house, the cost involved with the swaps, moving credits, 3% incentives, etc, are substantial. In the past if a corporation like Caterpillar owned a relocation home and wanted to unload it, they would drop the listing price, which in turn results in a lower selling price, which ultimately shows an average lower selling price in that particular neighborhood. Once a home has come into Caterpillar’s inventory (defined as owned by them as opposed to the transferring employee), they are now holding firm on their listing price. The buyer is still getting a great deal with all of the incentives being offered, but it’s helping stabilize the selling prices and neighborhoods compared to offloading the homes like they would have in the past. This in turn does actually help private sellers price their home higher than if this program did not exist.
3. Do I have to be a Caterpillar employee to partake in the program?
This program is open to anyone, anywhere, regardless of where they work, so long as the home they are buying is in the MSP program, and in the event they are trading in their current home, that their current home meets the qualifying factors mentioned above.
2. What if I don’t like the offer Caterpillar is making to me on my house that I’d like to trade in?
That’s the best part. If you don’t like the offer you get on your house, nothing says you have to take it. You can accept it, counter it or simply reject it. If you accept it or counter it and the counter is accepted, then we have a binding contract and both sides can move forward with any inspections they may want to have. If the offer is rejected by either side, there is no further obligation to either party. Both parties agree to move on, earnest money is returned, and that’s that.
1. What is the success rate of the offers being made on the trade in homes?
So far it has been highly successful, over 90% of the time the offer made on the buyers home has been accepted. Just like you would never buy a house sight unseen, Caterpillar is in the same position. As such, when the two local Realtors are assigned to view your home, in many cases a representative from Caterpillar and/or Cartus Relocation may come along for the showing as well to see your home. As such, the more you can do to make your house presentable, updated with little things like paint, etc, the more it can do to positively influence your chances of having a successful buyout. If you would ever like us to preview your home to offer any suggestions or tips prior to deciding to do anything with this program, just let us know! We’d be happy to help.