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Selling House for Job Relocation
For many, exploring new work opportunities not only means shifting to a different career but also relocating to another state or country. While this may be exciting, moving to a new city is no easy task, especially if you are on a tight deadline and you own a house.
When selling house for job relocation, the homeowner has three main options: hire a real estate agent and list the house, opt for a guaranteed buyout, or sell the house to a cash buyer or real estate investor. If the real estate market isn't favorable, the owner may also choose to keep the house and rent it out.
When you commit to a relocation for a new job, you are also committing to selling your house (unless your move is temporary). To help you anticipate what you'll go through in the process, here's a comprehensive guide that covers considerations before selling your house as well as your options when selling.
What to Consider Before Selling House Due to Job Relocation
Relocating for a new job is a huge life decision, especially if you plan to move out of state. That said, you must first ensure that all your main bases are covered.
Here's a checklist of all the things you have to consider before relocating and selling your property.
If you just bought your house, chances are, you still haven't built much equity. Thus, before you decide on selling your property due to job relocation, you must ensure that its value is enough to pay for its mortgage as well as the cost of putting a house on sale.
Remember that you may need to spend for repairs, staging, and marketing the property. While the house is still not sold, you would also pay for property taxes, insurance, utilities, etc.
Aside from all these, you need to cover closing costs which may incur 6% to 10% of your home value including the commission fee of your real estate agent. This is a hefty expense to be deducted from your home sale.
All these fees are difficult to cover, especially if you need to buy a new house in a new city.
To prepare, find out the exact value of your home through home appraisal or comparative market analysis (CMA). This will help you set a good asking price when you sell your house for a job relocation.
Many companies offer job relocation assistance or a package that helps their employees move. This is a strategy to improve retention and is really helpful to the new employees.
In a survey conducted in 2019, 62% of the 2,800 respondents said that they're willing to relocate for a new job depending on where they are relocating to and how easy it is to move. Through a job relocation package, the costs and other hassles of moving won't be too much of a burden to the employees.
Most relocation assistance is negotiable depending on your position in the company, but generally, it includes payment for:
- Moving expenses, including fees for a professional moving company
- Temporary housing
- Temporary living expenses
- Storage fees
- Down payment assistance when buying a new house
- Transportation costs
- Lump sum bonus
- Moving insurance
- Relocation taxes
- Familial support
Premium job relocation packages may even include buying you a new home. Thus, it's really a good idea to negotiate with your new employer.
Once you have identified what is involved in the job relocation package of the company, you may adjust the selling price of your property accordingly.
When you sell your home due to job relocation, you may be able to avoid paying capital gains tax up to $250,000 (if single) or $500,000 (if married) of the profit of the home sale. This is if you can prove that you own your current house and consider it your primary residence for two of the last five years.
In case you aren't eligible for this perk, you can still be qualified for partial exclusion of capital gains.
requirements of the IRS for work-related move tax exclusion
- You were transferred to a new location that is at least 50 miles from your old home or office.
- You haven't worked on-site before and you'll work at a job that is at least 50 miles from where you live.
- The requirements mentioned above are true for your home co-owner or your spouse.
Meanwhile, if you find dealing with capital gains tax confusing and time-consuming, seek the advice of a tax professional. They can also help determine your eligibility for a work-related move tax exclusion.
Unfortunately, moving expenses connected to relocating for a dream job are no longer tax deductible due to the Tax Cuts and Job Acts of January 2018. This means, only members of the Armed Forces can enjoy tax breaks for their out of pocket expenses since they're relocating based on a military order.
Similar to the job relocation package, you will want to factor in the costs to move when preparing to sell your house.
Local Real Estate Market
Even if you have already decided to sell your house and accept the job relocation offer, a home sale would only transpire if the real estate selling market in your area is faring well and if you're given enough time by your company to sell your house before relocating.
If the market is favorable, you can expect your house to be sold after only a few weeks. This is in connection with the National Association of Realtors (NAR) report that most houses only stay in the market for 16 to 17 days.
Meanwhile, if the real estate market in the area is not great, it may take a long time to find a buyer. In this situation, you can consider renting out your property until someone takes an interest in it or finding a house buying company who can offer fast cash, so you can be done with it.
Plan for Housing After the Sale
Before you sell your property and relocate for your dream job, you must also consider where you'll live when the house is sold. If you reach the closing table weeks or months before the job relocation date, you may find yourself homeless.
To avoid this, you must plan ahead. While selling your property, start searching for a new home in the new location where you're moving.
In case you sell your house far before you're ready to move into your new home, talk to your real estate agent and the buyer about the possibility of a sale-leaseback agreement.
This agreement, also called holdover or seller rent back, allows you to stay in your old house for a certain period of time. Your buyer would be your landlord until you can sort things out.
Sale-leaseback agreements are pretty common these days because most sales happen fast and home sellers often don't have time to find and close on their new home.
When to Sell Your Home for Job Relocation
While you may sell your house the day before you relocate, this happens rarely. Typically people find themselves selling the house months before or after relocating.
Selling Before You Move
Selling your house before a job relocation means listing your house on the market or selling it to a cash buyer or real estate investor before your actual move. This actually has a lot of advantages.
For starters, you'll receive more offers and you'll be able to sell the house at a more competitive price. You'll also have more time to explore where you'll move and find a new house.
Buying a new house in a new city will be much less stressful if you already have the money for a downpayment. This is possible if you sell your house before moving.
Selling After Relocating
Depending on the situation, you may find yourself selling your old home after relocating. This means, for a time being, you would be the owner of two homes— a situation that can strain your finances due to paying two mortgages.
When you try to sell a property after you move to another state, you would have to travel back and forth to process the home sale. In other words, you won't be able to sell your house fast. This can be tough on you, especially if you are still settling into your new life.
To avoid the hassle of selling a house for a job relocation after your move, there are cash buying companies and real estate investors who help in these exact scenarios. They buy properties quickly, so you can cash out and move on.
Most homeowners who are left with no option but to sell after their move are those that weren't given enough time to transition. With cash buyers, even if you only have a week or two before the move, they'll make the home sale possible because they don't have to wait for lenders to approve financing.
Options When Selling House for a Job Relocation
Generally, you have three options when selling house for job relocation: hiring an agent to handle the real estate transaction, choosing relocation home buyout, and selling to a cash buyer or real estate investor.
Aside from these three, you can also keep the house and rent it out while relocating for a new job. This is if you plan to go back, retire there in the future, or can cash flow.
To learn more about your options, check out the comprehensive details below.
Hire a Real Estate Agent and Sell on the Local Market
If you still have a lot of time before you relocate and you want to gain more money from the sale of your property, choose the traditional way of selling which involves hiring a real estate agent and listing the property.
There are real estate agents who are experts in finding potential buyers for homes being sold due to job relocations.
However, if you are pressed for time and don't have enough budget to make big repairs because you need to finance a new home, this route may not be for you.
Should you decide that hiring an agent and listing on the local market makes more sense, here are the steps you should follow in order to sell your property:
Set a Realistic Price
A lot of homes stay on the market for too long because they weren't priced right. Often, they are listed for an asking price that is way above their fair market value because the seller wants to bank more money.
If you want to sell quickly due to a new job relocation, you should set a realistic price. You can do this by asking a professional appraiser to help you out or by asking your real estate agent to do a comparative market analysis (CMA).
When real estate professionals conduct CMA, they analyze comparable homes (comps) or recently sold houses in your area that are similar to yours in structure, size, and amenities.
Have the Home Inspected
There are many reasons why you should get your home inspected before you list it in the real estate market, but the most significant is that you'll be able to get ahead of all the possible repairs. The buyer would not find any issue in your property that can forestall the deal.
Make Necessary Repairs
When you make repairs, the buyers won't try to haggle for a cheaper selling price. You can even list your home for a higher price since the repairs will increase its fair market value.
Improve the Curb Appeal of the Property
Improving the curb appeal of your property can attract more potential buyers. Often, buyers drive by the properties they are eyeing and if they are happy with what they see outside, they will most likely check out the inside.
According to NAR, if you want to improve the curb appeal of your house, you should focus on cleaning, applying a fresh coat of paint, fixing your yard by doing some landscaping, and repairing your roof.
Move Your Stuff and Clean the Property
Since you are relocating due to a job transfer, it may be a great time to pack all your stuff and move it to a storage space before selling your house. This can greatly impact the number of offers you'll receive since most homebuyers want to see how much space a house can offer.
If you have a lot of stuff, you can hire some movers or a junk removal team to help you. If you plan to do all the work yourself, sort your things and donate some of them since you won't be able to carry them all when you relocate.
Once you've dealt with your stuff, deep clean your house. You want to ensure that it is dust free and that no pests are hiding anywhere.
List and Market the House
Through the help of a real estate agent, analyze the market trends and list your house. Be sure to include professional photos of your home in the listing so you'll attract more buyers.
You can also post your property on social networking sites, market it to your close circle, and stage open houses to sell your house quickly.
Since you are working with a real estate agent, you won't have to deal much with negotiations. As long as you have communicated your expectations to the agent, they'll handle the negotiations for you.
As much as possible, however, don't let the buyer know that you are selling the house due to job relocation. Buyers may assume you're in a hurry to sell and bargain for a lower price.
Close the Sale
After negotiations have been made, you can now proceed to house closing. Your real estate agent will assist you through the whole process, but generally, you can expect a title search, home inspections, lender appraisal, and a lot more.
The closing process can take around 50 days from offer acceptance and the closing costs may incur $6% to 10% of the home sale.
Guaranteed Buyout (GBO)
You may ask your new employer if they offer a home buyout on top of providing you with temporary housing. Basically, this means your new employer will assess the market value of your property and buy it from you, so you wouldn't have to worry about the whole selling process.
Although not common, large companies offer this perk, especially when they ask the employee to move overseas. A home buyout is the highest job relocation benefit provided by companies to their employees.
Your new employer may also hire a relocation company to handle selling your house and finding you another one in a new location. Note that relocation companies don't work as real estate agents, but they do make relocations easy by facilitating your home sale.
To be specific, these relocation companies that offer guaranteed buyout may:
- Directly buy the house from you.
- List your house in the local real estate market and if it isn't sold after a specified safe, buy it from you.
- Help you process a home sale. You'll list the house for sale by owner through the help of an agent and when you have received an offer, the GBO company will process everything.
If the GBO company bought your house directly, your job relocation would definitely be stress-free. This is also the case if your house reaches the number of days it should stay in the market that is set by the GBO company.
However, if the relocation company only offers assistance for the real estate transaction, there isn't much certainty when it comes to the time frame of the sale— a disadvantage when you need to move right away.
Moreover, most relocation companies don't pay as much as traditional buyers. Expect their offer to be below the market value of your property. Be diligent when reviewing the contract.
Sell the House to a Cash Buyer or Real Estate Investor
Selling to a cash buyer or real estate investor makes sense when you have limited time to move, the job relocation package offered by the company is not competitive, or your house is in a bad state.
To illustrate, with cash buyers and real estate investors, you can close in as fast as seven days because they'll give you a fair cash offer in a matter of hours.
This is relatively faster than the months you'll spend repairing your property, staging, and marketing. You also won't have to deal with an open house, which can impact schedules and require constant cleaning.
Another great thing about selling to cash buyers and real estate investors is that they'll buy your home in as-is condition. Even if your house needs major foundation or roof repairs, they'll gladly give you an offer.
The only drawback of selling to a cash buyer or real estate investor is the possibility that you'll net less money compared to a traditional sale.
Nevertheless, if your house needs a lot of work and you would need to spend a few hundred dollars to thousands just so you can list it in the market, you may still end up earning more if you sell to cash buyers or real estate investors.
Rent it Out Rather Than Sell
If you're still undecided whether to keep your house or sell it, you may want to consider turning it into a rental home.
Turning your house into a rental and serving as a long distance landlord is suggested if your location has a growing rental market or if your house has amenities that many renters like, such as a pool, a large backyard, or a great location.
This decision also makes sense if your house is near schools, hospitals, and other buildings and services that most renters prioritize.
Moreover, renting your house out is recommended if you have a sentimental attachment to it or you plan to return if the job transfer is unsuccessful.
Of course, renting your own home can also be stressful, especially since you live far away. You would need a renter to take care of your property. As a long distance landlord, you would need to hire a property manager to handle any issues or maintenance for you.
You also need to deal with carrying costs such as property taxes, insurance, and HOA dues, not to mention dealing with two mortgages.
Aside from these challenges, landlords need a rental contract that adheres to state laws and correctly documents the rights of the tenants.
Final Thoughts: Selling House Due to Job Relocation
Being offered to relocate for a job is a huge career opportunity. However, it also comes with a number of challenges— one of them being the sale of your old home.
In our discussion above, you learned about all the considerations when putting a home for sale due to job relocation. We also covered all your options in selling your house, including listing on the market or selling to a real estate investor.
If you're out of time and don't want to manage a home sale while living miles away, consider getting a cash offer from a house buying company.
Here at Sell My House Fast, we'll give you a fair cash offer for your property and make the selling process faster so you can relocate to a new city immediately.
Fill out the form below or call us at (844) 207-0788 to know more about selling your house due to job relocation!