Relo Companies. Scam or Yes Ma’am.

Cartus relocation company is a CROC! (that is an opinion, for more opinions Google Cartus sucks).

Actually many “relocation” companies that are supposed to help the employee are just fronts for making profit. And they have such a compelling pitch! How could an eligible buyer actually decide to bypass them? EASILY!

I’ll explain exactly why you might want to bypass your relocation company AND how you can use PART of their system to your benefit and ditch the other part.

Why am I picking on Cartus? Cuz I was robbed. I got this email the other day:

Hi, I’m moving to Virginia with my job in a month and my fiance and I are a big Frank fan! {Name Omitted} recommended you to us. We love the website and reading/listening to your blog. And, we’d like to go with your realty firm when we purchase a place in Northern Arlington this summer. Fortunately for us, my company (XYZ) is willing to pay Realtor’s fees and closing costs but I need to approve you as a realtor/realty before they will allow us to get started.

I added the emphasis.

1) Fortunately for us. Wow, the company is so gracious. They really care about their employees. Consider it a benefit like healthcare. They will pay Realtor fees and closing costs! (end sarcasm here)

Ok, first of all when you are buying, there are NO “Realtor fees” (sidenote: ha, I wonder if they pay for the bogus Realtor Admin fees which the Washington Post, link, just covered and cited my blog) per se because the Realtor fees are paid by the SELLER. But it surely makes for a good BS pitch in the brochure. Why not also add: free keys! As for the “closing costs” I’ll get to that shortly…

2) Approve you. Approve me for what? Make sure I’m good? Knowledgeable with people that are relocating? Maybe a quiz or a check for references? No. None of this happened.

I knew the “approve” the agent sounded fishy. I warned the buyer… I said “I bet they are up to something.”

Finally Cartus contacts me. I get an email that effectively said: You are approved when you agree to give us 40% of your commission. (actually it said “registration entails a verbal agreement of a 40% referral fee.”)

Are you F-ing kidding me? “Referral fee?” Did they refer business to me? Hell no. These buyers found me on their own. They were a personal reference from a friend that felt like they got great service. And Cartus demands 40% to be part of their program. What is this Robin Hood? Take from one to give a another? And keep a little for profit in the process?

So here are the details for their program, I am a fine print reader, so at the end I will try to parse this out for you.


There are numerous expenses associated with the purchase of your new home that vary by state and local custom. You will be reimbursed for buyer’s expenses customary in the new location; which should be discussed with your Cartus Relocation Consultant.

In all cases, only one set of lending fees and one-time closing fees will be reimbursed. Fees and charges most commonly recognized for reimbursement are:

Abstract or title search, Amortization fee, Application fee, Appraisal fee (1), Attorney fees (where required by state law), Certified copies, Credit report (1), Document preparation fee, Escrow fee, Guarantee fee, Inspections that are normal and customary for the area (termite, well/septic),

– Loan origination fee not to exceed 1% of the mortgage amount. If you do not contact Cartus prior to beginning the home purchase assistance program, you will not be eligible for the 1% loan origination fee.

Homeowners title policy for new construction only, Lender’s Title Policy, Messenger service fees/express shipment fees, Notary fees, Recording fees, Settlement or closing fee, Survey, Tax service fee, Title examination, Underwriting fee

Isn’t it fun making a really long list of fees that are paid? Even though many of them are next to nothing. I just pulled up a HUD1 for a buyer (note that fees can vary by closing company and frequently get renamed and shuffled around).

Here are a few of the next to nothing fees on the list that you get FREE!!: Notary Fee= $0, Messenger= $55, Tax service fee $0, Recording $65, Termite $35, Credit report $14, Title examination=$0.

The fees that have some real value: Survey= $265 Settlement fee=$195 Title Search=$175 Lender’s title insurance=$1,800 (on a $650k VA home, reissue rate) NOT present in the list of closing costs: Owner’s title insurance= $1350 (except for closing costs) Read more on Owner’s Title

Conditional costs. Ie IF, a big IF, you use their “approved” Realtor. You get: Loan origination fee 1%. Lenders have a ton of names for these types of fees. Sometimes they are called “Rate buy down” points, or “Discount Fee.” The short hand is just “points.” Points aren’t necessarily bad (make sure to subscribe to this blog for a full post on when to buy points). More often than not, if you put down 20% there are ZERO POINTS, ie $0 Loan Origination fees. So if you DO use the Cartus program, and an “approved” Realtor, make sure you go out of your way to max out the full 1% point. (ie if the lender was going to charge you no points, they can make up the fee and buy down your rate, as in make your 5% rate 4.75% approximately)

But here is the fine print as I understand it…

BOTTOM LINE: You only have to use their approved Realtor IF you need that Loan origination fee. In other words, you can still pick your favorite Realtor and get all the other fees covered for free by Cartus. (I could be wrong, but that is how I understand their rules above).

Why in God’s world would you give up the ability to get a “free” 1% loan origination fee?

Well that is a separate and lengthy discussion on rebating and discounting. Heck, there are several companies that will give you a 1.5% cash rebate. Heck a 1.5% cash rebate is MUCH better than no cash reimbursement for a 1% fee you might not have purchased normally.


1) Have them pay ALL your fees except the 1%, and find your own Realtor that will give you a rebate.

2) Or if you find a Realtor that is willing to be “approved” by Cartus, tell them “hey buddy, you are willing to give 40% to Cartus right? And Cartus will just turn around and refund 33% (1% or 1/3rd of the 3% offered to buyer’s agents) of the 40% in the form of a 1% loan rebate, why not just give me the 40% directly?! Cut out Cartus and get 1.2% refunded on your HUD1 vs 1% lender fee repayment and Cartus pocketing the rest.

3) Get your own un-approved agent, skip the loan fee reimbursement, yet accept all the other fees. So why am I telling you the secret path to getting the most cash out of the relocation company and system? Well maybe, just maybe you will then believe me that #3 above might be the best solution for you in the end.

Stop and think about for a second. Cartus demands 40% from a Realtor that you pick or one that they pick. So for the ones that they pick, what kind of Realtors will accept that? Oftentimes desperate ones. Perhaps those that are kinda struggling. You know, economy is tough right now. Weekend warrior Realtors that have nothing better to do? One that will pressure you into a house and hope to get you off their slate as fast as possible so they can make the next 60% deal from Cartus. Perhaps they have to cut down half the time they spend on you, to make it worth it.

So signing with Cartus with an “Approved” Realtor, is not much different than Rebating. I have no problem with the rebating business model. (note: you won’t find many other non-Rebating Realtors talk about it openly).

Why do I talk about it? Well as I like to say

I use to rebate, but then I got good.

Yep Read: Realtor Rebates. Free Money or Expensive Savings? and more on rebating.

In the end, know you do have a choice. You can get the best of both worlds. You can get Cartus to pay a good amount of your closing costs, get a loan with NO loan origination fees, and get to pick an agent that is working for YOU, and not for Cartus.

Oh, and remember I’m not too busy for you, so email me. See I’m Not Too Busy For You video #1 and Video #2

Make sure to subscribe and comment and debate. Nobody likes a stale blog!

Written by Frank Borges LL0SA

Broker, Owner

Croc image DrBartje Fish image Phillip

ps. My experience was on the BUYING side. Can somebody comment on the SELLING side of relocating? Do they really buy the house at the appraised price and eat any subsequent loss? Now that seems to have some value in this market.

  • 31
  • May
  • 2009

93 Responses to “Relo Companies. Scam or Yes Ma’am.”

  1. Hi Frank – This is highway robbery. I just got a relocation referral offer for 38%. Nonnegotiable. I think in the end, this hurts the consumer because the agent isn’t getting paid enough to do the job right.

    Great post – I just subscribed!

  2. 40% is a major rip-off!!

    I’ve worked for relocation companies myself and they try to rip you on MANY different levels, but it really stems from the party that is hiring the relocation company.

    So in essence, it was your association to your friend the realtor who referred you, and so Cartus is attempting to hijack that relationshp, and sell it back to you!!

    As far as I’m concerned, they can fold it four ways.

    We need to establish some litigation that prohibits relocation companies from attempting to gouge us.

  3. This is a fight I’ve been fighting for many years.

    Call it what it is, CORPORATE EXTORTION.

    I don’t pay referral fees unless I have accepted a referral. I don’t take referrals or pay referral fees from relocation companies.

    If a buyer wants to use an agent referred to them by a relocation company, that’s their choice. They are advised that they’ll lose some relocation expenses if they don’t. That’s extortion.

    Good post. I turned a buyer away last week because they were wanted me to pay USAA a referral fee so they, the buyer, could get a modest rebate from USAA. When they found that the money came from the agent’s commission, they were surprised. GEEZ! Where do they thing the money came from???

    Good post Frank.

  4. Frank-I’ve had the same thing happen to me and it is a PITA! In our current market a good buyers agent can negotiate most of those same costs in seller concessions and not give up 40% of their commission to do it. Most buyers have no idea that the cost of these benefits aren’t coming from the company but from the agents who are doing all of the work for them.

    The fees you pay to accept this wonderful referral (that isn’t a referal) is to pay the overhead to keep the wheels of the relocation monster turning and not actually helping the buyer at all.

  5. 40% is “Highway Robbery”. To do what? What a joke! Our company recently had a class to sign up for to be approved to accepty referrals for 40%. Thanks, but no thanks!

  6. Most relo companies do have a common thread.. it is profit. .it is apparent that Cactus wants just a bigger piece. .good post!

  7. I’ve dealt with Cartus in the past and they are a solid company. They do need to reduce their fees or they will loose some major market share.

  8. Okay. I subscribed. However, I’m afraid I missed something. What’s the end of this story? Were you able to keep your referral?

  9. 19 Featured Posts

    I told Cartus to go to hell.

    It wasn’t a referral, at least not from Cartus, but they still demanded 40%.

    The client felt like they HAD to use Cartus, so they left.

    And I wrote this blog post to explain to the customer how the process REALLY works, and how they have a choice.

  10. Frank, I have had a similar experience with this company. They have tons of fees in addition to the “referal fees”
    There is a yearly education fee, an enrollment fee, etc. etc. The buyers i had were a referal from another AR member not Cartus. I too gave them up but wonder now if they got taken for the ride too.

    I will not be held hostage by such companies NEXT

  11. Frank, Some relocation companies are getting 45% and I’m sure it’s not going to stop there. After the fact referral requests should be called exactly what they really are…extortion.

    If I’m not mistaken, the company, not Cartus, ends up in the end paying the fees. I would love to see an explanation of what they get for their 40%. Rich

  12. Good post and excellent information for buyers. You should share this story with The Washington Post. They could turn it into a nice article in the real estate section.

  13. I too would like to know what Cartus does for that 40% because I can’t think of a thing.Excellent post.

  14. Frank, a few years ago, some clients that I had helped purchase their home called me because they wanted to sell since they were being transferred to California.

    Cartus asked for a hefty referral fee. I called them and said H*** NO! These clients weren’t referred by you — we had an existing relationship. Cartus backed off. I sold the home. Happy end to the story.

    These referral relocation companies are a major ripoff. And, yeah, you are right… what are they approving? Besides the fact that the agent of choice is willing to give up a huge chunk of their commission.

  15. Frank – Great post to get this out in the open ! I agree that the relocation model is similar to a rebate model. Someone coming in from out of state can just google “city real estate” or get a referral like in this case and they are off to the races. Is a shame that this relocation company dips into the Realtors commission to pay for these fees.

  16. Good post. The last relo fee I paid was 35% about 2 years ago. It did not have all that other b*** s*** that you were dealing with. I think approved means you’ll pay the fee. A referral from out of state doesn’t ask for more than 25% for doing the same, nothing…

  17. Frank, when a client finds me first and then brings a relo company in, I have either 1) negotiated the fee down or 2) refused to pay.

    I educate the client and if they are a seasoned employee it is not a problem. For the new hires they are afraid to make waves.

    Lenn, is right it is extortion when the buyer has found us on their own. I know there is a rule somewhere and I can’t remember the name but when I think of it I will come back. It basically says that if the client found you on their own there is no pay. But, most agents don’t know about it. It is like a gentlemans agreement with relo companies.

  18. Great exposure blog. I had an experience not long ago that was similar to this but not by Cartus. I had been contacted by a couple relocating from Florida to take an executive position here. The recruiter that had found the position for them told them that if they did not use the real estate agency of choice, then they would lose moving costs that were going to be paid as part of the recruiters package.

    They told the recruiter that they had been talking to me already, and gave the recruiter my name and contact info. The recruiter told them that he would check the system to see if I was one of the preferred Realtors for the area. I got a call from the recruiter, who proceeded to tell me that if I wanted to complete the transaction with the couple, I would need to give up 40% as a referral fee or he would move them to another Realtor. On principal I proceeded to tell the recruiter where to go.

    A few days later the couple sent me an email apologizing for not being able to work with me, and hoped I would be able to get approved in the future. There are all types of schemers out there looking to grab at anything they can get someone to swallow.

  19. Enjoyed reading your post, and have subscribed. Thanks for the heads up about Cartus.

  20. I agree that 40% is way to high. However, there are agents out there starving who will take this deal all day long. That is what they are counting on. However, the buyer does not obtain an experienced realtor.

  21. I’ve got bad news for you… I’m a Cartus approved relocation agent. And up here they don’t charge 40% referral.

    They charge a 42.5% referral fee, and adjust your commission to 50/50 with your agency, regardless of what your current agreement is. Now that is when they DO refer the client to you, rather than the situation you find yourself in… so they seem to have allocated a boon of 2.5% to you, and allowed you to remain at your own level.

    How gracious.

    If I find the client first (or he finds me first)… I can “register” the client, and then maintain my split.

  22. 10 Featured Posts

    Relocation companies are equally harmful to sellers AND to listing agents. The ERC form requires a price estimate based on selling in 60-90 days. So we often see these homes priced below market to ensure a speedy sale. The extra paperwork required of the listing agent is ridiculous, time-consuming and seldom read.

    Our MLS now requires a Corp Relo be entered in a special section that also includes Short-Sales, REO’s. That’s so there is a heads-up for buyer agents to know that the buyer will need to “jump thru hoops” to complete the sale.

    The extra amendments that a corp relo listing requires the buyer to sign essentially eliminates all liability for the relo company. Some even require the buyer to be pre-approved by the relo company lender, even though the buyer will be using their own lender. Therefore, the buyer is giving ALL their financial info to the SELLER.

    I stopped accepting relo “referrals” several years ago because it just didn’t make sense financially for my business, plus, I also felt unethical to watch them “scr*w” the clients.

  23. We agree WITH YOU! We stopped accepting the relo extortions – er, uh… I mean referrals – several years ago. They do nothing, make agents jump through bogus hoops and then take a huge chunk of our income. And what do they do for the buyer or sellers? Zip, nada, nothing of value.

    Great post!

  24. 1 Featured Post

    My streak of not paying referral companies is still alive after 20 years. Thank you for your confirmation that it is worse, not better. When I am referred by a Realtor who has worked with a client, I gladly pay becasue 9 times out of 10 I am getting a well schooled buyer, who knows that if I have the right expertise then not just price is taken care of, but a whole lot more.

  25. This is one of our pet peeves. We refuse to pay someone 40% for our hard work. It’s ridiculous that they continue to get away with this stuff but I guess there’s always someone out there that will take it! This post is right on target – Thanks

  26. Amen. I had a company who tried to get me to rebate a commission to them after I had already listed and sold the property. Can you imagine? What a scam.

  27. Frank: I have been trying to close a deal that CARTUS took over a home while we were trying to get the home contracted. I have the buyers and this has been a livid nightmare. CARTUS will not sign documents until you jump through their hurdles and them you still can’t get them to sign. The fun part is we actually missed 4 attempts to actually close because the seller can not properly sign a deed. On would have thought CARTUS would have made sure things like this are in place and ready.

    What a experience this one has been.. Would love to have skipped this process and had a normal closing.

  28. Franklyrealty says:

    Thanks for all the great responses.

    I do want to distinguish between referral fees when a company sends you NEW business vs when the agent already has the client.

    If a company wants to give out NEW CLIENTS to Realtor, hell they SHOULD charge as much as they can. Heck, they can put it on an auction system and demand upwards of 80% if the agent is willing to do it.

    A Cartus NEW lead can be great for some newer agents. They can maybe even work out of a hole in the ground. No advertising, no marketing, no damn blogging and might even beat the average Realtor salary of $17,000 a year.

    My problem is when there is no referring. When the client found me through a past happy client AND read all of my blogs (which is time consuming) and was converted. Then CARTUS takes.

    Yes I did tell Cartus no. And the client felt they had to go elsewhere.

    Funny thing is I have a purchase today that is getting ratified by the listing relo company today. (no cut is expected from my side). So I pulled this post from my main blog (in case the relo company would change their mind and not sign after reading this). Nobody reads ActiveRain right?

    So finally this post is written. Sure I blew a couple hours, but ANYTIME in the next 5 or 10 years that a client wants to use a RELO, I can just send them a link. And you too can send this link and save yourself the explanation! The joys of blogging once and never repeating oneself!


  29. Franklyrealty says:

    Also anybody have any experience using CARTUS on the SELLING side?

    How does it work? Somehow the RELO company buys it at an appraised price and then eats any loss if it sells for less? Now THAT seems to maybe have some value. Sure they might be a pain, but if there is a $800,000 appraised home that isn’t selling, and they buy it for $800k and unload it for $700k and THEY take the loss? That would be great. Somehow that seems too good to be true though.


  30. I have yet to find any relocation company that actually adds value to a deal.

    They never assist the client in a practical way.

    It’s legalized blackmail!

  31. Frank: My buyers got $6,000 less than the list price on the home that is with CARTUS.

  32. I’ve experienced this first hand. It is often 2-sided. They are both selling (in the old market) and buying (in the new market).

  33. Frank: In our area Cartus is huge. We have a large military community and they are the relo company for USAA insurance which is big with military families.

    At some point I tried to get in with them, but here they only work with the very large brokerages. These are comments that I have actually heard from people dealing with Cartus

    Rea Estate Agent. ” I close two to three deals a month, but my commissions are $2,000 to $3,000. Between the brokerage and Cartus fee’s a $15,000 commission turns in to $2,000 to $3,000. I am overworked and under paid. The agent on the other side got the full commission.” (feeling of resentment)

    Buyer after working with a Cartus real estate agent. “The $1,000 dollars saving that Cartus promised was not worth the incompetence of the real estate agent we dealt with. I wish I had known you before we bought our house”

    I could go on and on, but I think these two verbatim comments say it all.

  34. I get a lot of internet leads moving to town. Paying the relo is part of the deal sometimes. I am on 100% so I at least get to keep what is leftover.

    I do agree that it is highway robbery and I try to negotiate my way out of the fee or get it lowered every time but I won’t give up a large commission check just because of the referral fee.

  35. cartus has a bunch of people signed up with them…I think they even have Navy Fed….sounds like an opening Frank… possibly find out who Cartus has contracts with..and do it better..

  36. Been there and done that and lost my shirt to prove it! I have been a Cartus agent with one firm and was a manager of a Cartus office with another firm and the agents were screaming “UNCLE” at every turn. When I was the agent, my mom and I were a team and we had our strategic planning retreat one year and said “enough is enough” and we withdrew from the program…curious enough…our sales were higher the next year!!! Go Figure!

  37. Frank, great post. We have worked with 2 listing clients who were referred to us outside of Cartus and yet Cartus wanted a 40% fee. We paid the first one 15% just to get them off our back, probably didn’t have to but we didn’t know any better and 0% on the most recent client. The key is that the client needs to be firm with Cartus and put their foot down and not be bullied. They basically extort money from us for doing very little and educated buyers and sellers will be able to see right through them.

  38. Frank great post…I did not know they get such a high percentage as a referral fee. Do you know if they charge the same for selling a home?

  39. Frank…

    Don’t hold back …just say what you think!

  40. Not only are they getting the 40% from the buying side, but the buyers are probably selling where they are coming from and Cartus receives the 40% referral fee from their selling side as well. As you said, it comes from the Realtor. Cartus really frowns on you telling the client where the money’s are taken from. The relocation client truly usually has no idea where the money comes from.

  41. Frank – Here is my experience on the Cartus listing side. It really depends on what the employer is willing to provide the employee. There are not as many out right buyouts of homes now due to the declining markets. Employers are limiting those buyouts to key personnel/executive moves. It is much more common to see a lump sum offering for expenses and a gross up of compensation so there isn’t a taxable event for the employee.

    For a newer agent without a protected corporate client account, it would be difficult to survive on these referral fees as your only business.

  42. Too bad the buyer chose to go to a “sucker” agent rather than work with you. I’m sure you would have been able to negotiate an incredible deal for them on a house…making the 1% origination fee look like chicken feed.
    Tina in Virginia

  43. Thanks for the post…Cartus is a nightmare! One of my agents from our Orlando office is currently working with them on a buyer referral. She was willing to take it on…god bless her! Our agent will be glad when this deal is done and she can be rid of them!

    They needed certain information which was provided to them, by me as the broker, on several occasions…thank god for email, as I just forwarded everything over to our agent to prove it had been sent! This company seems completely incompetent, not to mention the different area codes for their representatives! What’s up with that? Call one number to try to speak with someone and then fax documents to another area code? Just where is the representative located that’s been assigned?

    I too would love to know just what they provide for the loan shark rates they charge! As others have said…it is EXTORTION!

  44. Frank – Wow. I use to work for Cartus about 8 years ago when it was Cendant Mobility. I left a firm 6 months ago which was in the Cartus network and I thought I was privileged to be the sole agent assigned to all that time. I left the firm when I decided I had enough with Cartus and the 40% referral fees on the listings I took plus the bullying I got from Cartus on a regular basis. Yes, it wasn’t good enough that we were paying out 40% but the biggest gripe is that our main Cartus real estate specialist for my area employer (IBM) was a witch. She would often snap at me AND my broker and often we would have a war of words because we weren’t willing to back down. My broker did turn in one Cartusa rep, but the one who really needed to be brought to the attention of Cartus management got off easy and is still there. The reps can be very scrutinizing and temperamental – I had enough. For the time and frustration involved, I realized my time would be better spent generating my own leads with a focus on a higher split with my new broker. I couldn’t be happier not having to pay 40% or a franchise fee any longer either. UNderstand that the major companies that are primary broker’s with Cartus are the sister companies Coldwell Banker and C21….it’s not bad enough that these brokers and their agents pay franchise fees to Realogy but they also have to pay 40% referrals??? Yes, I was a sucker for too long – 8% franchise fee PLUS 40% referral. As a new agent I didn’t know better, as I gained experience I felt a loyalty to my brokers – I guess it was plain DUMB. But, I finally moved on and I feel liberated now.

  45. Oh how I LOVE this post. After carting a family around for 3 FULL days and finding them their dream home, Cartus calls to tell me I owed them 40%, or their buyer would not get their benefits. WHAT A RIP OFF. To top it all off, they were rude, snots and unorganized. I felt like I was forced to pay it. (I actually got them down to 37.5%. Whopee, right? The buyers were too afraid to make a big deal about it. They had NO idea I had to pay. They didn’t tell the buyers that, of course.

    The next time Cartus calls me wanting nearly half my paycheck…I’ll have an earful for them. Hopefully Missy Caulk can find that rule she mentioned.

  46. I haven’t taken a relo in about five years. It’s bad enough to get ripped on the REO side as it is and then have the RELO companies in my pocket too. Why do they think us Realtors have all of this BIG MONEY?

  47. I most recently worked with them toward the end of 2008. Their fee at that time was 35%. So when the heck did it increase to 40%??? That is absolutely nutz!!!

  48. Relo companies suck to work with for us lenders too…..

    I am not a fan of them.

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