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When an assigned sale closes, the RSC pays the employee the
difference between the equity payment and the net sales price
from the third-party sale.
In a regular sale, the RSC lists the residence for sale
through a real estate broker. The RSC recommends repairs,
improvements, and maintenance that would expedite the residence's
sale. Petitioner must authorize the repair or improvement, and
the RSC makes the appropriate arrangements. The RSC also advises
petitioner of its activities in connection with the sale of the
residences and informs petitioner of any offers that it receives.
Petitioner's contract with the RSC gives the RSC authority to
reject or accept any bona fide third-party offer. Petitioner
must approve any offers that are below a specified percentage
(either 92 or 94 percent) of the appraised value. In practice,
however, the RSC consults with petitioner and follows
petitioner's recommendations regarding all third-party offers.
In general, the RSC sends the net sales proceeds from the
third-party sale to petitioner when the sale closes. If a third
party purchases the residence at a price below the appraised
value, the RSC charges the loss from the sale to petitioner's
account. Conversely, the RSC credits a gain from a third-party
sale to petitioner. Petitioner then pays the gain to the
employee who owns the residence.
Petitioner reimburses the RSC for the equity payments and
for all costs that the RSC incurs in connection with the
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Last modified: May 25, 2011