What You Should Know If You're About To Make A Job Transfer
Moving can be a stressful experience for anyone. But when it’s due to a corporate job transfer, it can really cause your blood pressure to climb. Everything is usually compressed into a very tight time frame. And if you’re moving to an unfamiliar area or leaving a place you’ve grown to love, there’s sure to be plenty of tearful goodbyes, too.
Corporate executives who’ve moved many times will tell you that it’s a time of uncertainty and one that’s often accompanied by a feeling that your family’s lives are in someone else's hands. But fortunately it’s only temporary. And it can be much less stressful when you know what to expect ahead of time.
Over the years we've helped a number of families with the real estate part of their corporate move and have seen first-hand how important early preparation really is. Those who get all their ducks in a row up front and are prepared for what lies ahead usually have a much easier experience and are able to approach the move with a greater sense of anticipation and joy.
Relocation Packages Come In Many Shapes & Sizes
Most people embarking on a corporate move will receive some sort of Relocation Package from their employer. For some it might simply be a lump sum of money to defray some or all of their relocation costs. For others it might be a reimbursement allowance up to a maximum amount to cover certain relocation-related expenses.
But the most common type of relocation package is one where the employee is assigned a specialist from a third-party relocation company who helps coordinate and manage the move from start to finish. This often includes assistance to help the employee sell their current home and purchase a new one in their new locale.
Many relocation packages take it one step further by offering a buyout of the employee’s current home, which not only takes away some of the stress of trying to sell in a hurry but it also enables the employee to be a non-contingent buyer when making an offer on a replacement home in their new community.
The buyout is guaranteed cash in the employee’s pocket. But it can also be for less than what the employee thinks the house is worth. That’s because of the uncertainty the relocation company will face when trying to sell the home after you move out. It might take longer than expected and there's no telling what the eventual selling price will be. So that risk is usually factored into the buyout amount.
And for that reason, many sellers opt to try to sell it themselves first, knowing that if it doesn’t sell in a reasonable amount of time, they can just take the home off the market and accept the buyout. In fact, some relocation packages require the employee to try selling the home themselves for a certain period of time before they’re allowed to take a buyout.
Inspections & Necessary Repairs
Whether you try to sell the home yourself or accept a buyout, the relocation company will ultimately purchase the home from the employee and complete the sale to the buyer. And because they’re assuming liability as the seller, they usually insist on correcting any known flaws in the home (and often before it ever goes on the market).
So one of the first things the relocation company will do is order a series of inspections. The most common are home, pest and roof inspections, but they may order additional inspections, too. And the cost of any necessary repairs will be incorporated into the buyout amount.
Relocation Assistance When You’re Buying
Selling your home or deciding whether to take a buyout is just one part of the relocation process. The other part -- and the one that often brings a lot of uncertainty and trepidation -- is finding a home near your new job location.
Often the employee is moving to an unfamiliar area, so the challenge is not only finding a home that will suit their family’s needs but also making sure the community they’re focusing on fits the bill when it comes to schools, commute distances, recreational & cultural amenities, nightlife, proximity to airports & major freeways, etc.
Relocation packages usually allow several house-hunting trips to the new location and that can be an overwhelming experience for some buyers, especially those who feel a need to make some pretty quick decisions on where to live, despite knowing little about their new locale.
For that reason, having a real estate agent with strong relocation experience is critical. You may only be visiting for 2-3 days and some of that time might be involved in meetings with people in your new office. So it's important to cover as much ground as possible while you're there and really familiarize yourself with the area. You want to find the right home but you also need to make sure it's in a community that best aligns with your family’s needs.
Select An Agent With Strong Relocation Experience
Make sure the agent you’re working with knows the area very well and will be able to spend ample time with you while you’re in town. It’s important that you get all your questions answered and feel as confident as possible about buying a home in whichever community you decide on.
When we work with relocation buyers, we take a very systematic approach in an effort to make sure we’re maximizing our client’s time. Although we’re usually able to answer most of their questions, if there’s something we don’t know, we can usually point them to a reliable resource that can provide the information they’re looking for. Our goal is always to help our clients get to know our area first, so the home, neighborhood and community they ultimately choose fits their needs as well as their pocketbook.
We’ve helped many relocation buyers and sellers over the years and are always happy to answer questions and make suggestions. And of course, we’re always delighted to represent those planning to relocate to or from Benicia and Vallejo as well as the rest of Solano and Contra Costa Counties. Please Contact Us if we can help.
7 Important Relocation Tips For Solano & Contra Costa Buyers & Sellers
If you’ll be selling the home on your own instead of taking an immediate buyout package, you’ll interview all three agents and after reviewing your experience with your relocation coordinator, you’ll decide on the agent you wish to use.
However, if you accept a buyout, the relocation company will be handling the sale from that point forward, so they will select the listing agent. If you try selling it on your own first but later decide to take the buyout, the relocation company will decide whether to stay with your current agent or switch to someone else.
On the buying side, the relocation company will provide you with a list of recommended real estate agents in your new area and you’ll have a chance to interview those agents over the phone and check them out online before deciding who to use.
But as with the listing side, you can always ask your relocation coordinator to add another name to the list if you already know of an agent in your new location (such as Rod & Jamie!). If you start working with an agent in your new locale and don’t feel that your needs are being met, talk to your relocation coordinator and ask for a different agent. Your house-hunting trips need to be as productive as possible so make sure you have an agent who knows the area inside and out.
But there’s more to it than that. When you’re interviewing those three potential listing agents, each one will take notes and photos and provide the relocation company with a Broker’s Price Opinion. The BPO is like a mini-appraisal and tells the relocation company how your home compares to other similar homes that have recently sold. The relocation company will also order one or more appraisals, which are more detailed than a BPO.
If you’re selling the home yourself, before you decide on the price, your relocation coordinator will first review the findings of the BPO, appraisal and inspections with you. If you’re taking a buyout, the amount of that buyout will be based in large part on what appears in those same reports.
That’s a decided departure from a normal listing presentation, when most agents will give you an anticipated price range. The relocation company, though, doesn’t want prospective agents to plant a seed in the seller’s mind since their buyout offer may be different once the BPOs, appraisal and inspection findings are factored into the equation.
Usually, we’re allowed to provide comparable sales statistics, which will give you a general idea of the home’s value. But we just won’t be able to suggest an actual price on your home without the relocation company’s okay.
Before our client heads to the Bay Area, we’ve typically already had a number of phone conversations and provided listings and area information via email. So by the time we meet our client in person for the first time, we’ve usually identified cities and areas that match up best with what they’ve said they’re looking for.
We always like to start out by touring the different areas first and waiting to look at homes until our clients identify the areas and neighborhoods that appeal to them the most. So we begin with a chamber of commerce-type of tour of each community. Driving around the city for an hour or two usually gives our clients a pretty good idea of which neighborhoods and home styles they like best as well as a good sense of where the schools, shopping, parks and freeways are located in relation to these different neighborhoods.
They may want to consider several different communities, either due to price, job proximity or because it’s a community someone recommended they check out. If so, we take a driving tour of each community first, to help our clients compare one to the other.
And that’s often all we do on Day 1. For even though our clients are anxious to see some of the homes themselves, years of experience has taught us that there’s only so much a person can absorb at one time. Often, there’s a lot more clarity after a good night’s rest.
At the end of Day 1, we provide our clients with a list of active listings in the areas that interested them the most. And we spend the next day looking at the homes on that list that they want to see.
But instead of wasting time that first day looking at homes in communities that they later decide aren’t for them, we’ve found that looking at communities first and homes second provides a much more efficient and productive experience. By the end of Day 2, most clients are grateful for the approach we took and usually have a much better feel for the area and are able to identify a selection of homes that will best fit their family’s needs.
And if they’re still in town the following day, we can take them out for a second look at their favorite homes and give them the rest of the day to explore their favorite communities on their own and get an even better feel for the area.
It’s a process we’ve used over and over and one that allows our clients to leave town feeling very satisfied. And usually there’s a huge sense of relief by the time they head to the airport. And all that stress about relocating turns into a feeling of excitement and anticipation.
If you’re receiving a lump-sum payment and will be responsible for paying all of your relocation costs, you’ll want to find out if that lump-sum will be reported as a bonus and treated as ordinary income. If so, you could find yourself responsible for taxes on that extra income.
If it’s going to be taxable, many relocation packages will “gross-up” the amount the employee receives so that there’s enough left over to hopefully cover the employee’s anticipated tax hit from declaring that extra income.
Some relocation packages offer the employee two options — either use their preferred providers (ie. moving companies, airlines, etc.) and have those costs paid directly by the relo company or take a lump-sum and pay for everything yourself.
Also, what’s customary in one area isn’t always customary in other areas. Take title insurance, for example. In Solano and Contra Costa, it’s always a buyer’s cost. But in Santa Clara County it’s always paid by the seller. Similarly, sellers pay all of the transfer tax in Solano County but in Alameda County, where the city transfer tax can run $10,000 or more on some properties, it’s typically split between the buyer and seller.
So just because your relocation company paid for a certain fee when you’re selling, don’t automatically assume it’ll be covered in the area you’re moving to. Your best bet is to ask your real estate agent.
When we’re working with a relocation client, we always ask them to double-check what items their relocation company will pay for and we provide them with a “Who Pays What” handout from our local title company to illustrate what’s customary in our area.
If you run the numbers and realize that the package is lacking, talk to your supervisor or relocation coordinator. If you go on your first house-hunting trip and realize that the move isn’t going to be financially feasible for your family, let them know that, too.
The relocation package is there to make the employee’s job transfer as smooth and stress-free as possible. Your company wants you to look forward to working in your new location, so if something critical is missing from your relocation package or if the transfer is going to create a financial hardship, communicate that to the powers that be at your company. If it’s reasonable, they may very well agree to revise your relocation benefits.
Questions? Need More Information?
If you have questions or would like more information on how the relocation process works and if you’re not already working with another real estate agent, we’ll be happy to assist. And, if you’re contemplating a corporate transfer and would like to talk to us about potentially representing you in the sale of your current property or finding a replacement property in our market area, please Contact Us. We love sharing our knowledge and experience.