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Top 50 Relocation Questions: Part 1 of 5

Every year, we move thousands of corporate transferees around the globe. Some are homeowners, some are renters, some are domestic and some are international. We handle group moves, family moves, individual moves, temporary moves and even permanent moves. As you can probably imagine, we have fielded just about every transferee question pertaining to relocation there is … even some real stumpers! As we are gearing up for the busy relocation season, it dawned on us that we should be documenting all of the questions we receive and the answers we provide so that we can share it with you, as well as our transferees. If you have ever wished for a desk reference of frequently asked relocation questions so that you can respond to your employees, this five week blog series is for you.

Without further ado, here are the first 10 of 50 most common questions we receive from transferees and the answers that we provide on a regular basis. We hope you find this helpful and if you have anything to add, please let us know!

  1. How do I know if relocation is right for me?

Before accepting a job offer in a new location, there are practical and personal factors that you must consider. You should start by asking yourself these questions:

Practical:

  1. Is the new job right for me? Will this opportunity round out my knowledge, skills and abilities?
    2. Will I have a similar or better quality of life in the new location?
    3. Will my new salary accommodate the cost of living in the new location?
    4. Will it be difficult to sell my current home and buy one in the new location?
    5. Will the relocation benefits cover most of my moving costs?

Personal:

  1. Would my spouse/family be happy with the move?
    2. Will it be easy for my spouse to find work in the new location?
    3. How strong are the schools in the new location? Do I need to consider a private school for my children?
    4. Would it be easy for me and my family to make new friends?
    5. Will we have extended family support in the new location?
    6. Does the new area have an active social scene?

These are just a few preliminary questions that get at your professional and personal needs. You should also analyze your financial situation to see if the relocation is a good idea.

 

  1. Can I bring my children on the home finding trip?

 

You can bring your children on the home finding trip, but it is up to your company to decide how that cost is covered. Typically companies do not pay for travel for the kids, so you will need to use miscellaneous allowance funds to cover this cost. Some companies may approve to pay for child travel as an exception to the policy, but this is done on a case by case basis.

 

  1. How do I get my kids registered in a school before I have a permanent address in my new community?

 

This is, unfortunately, a challenge. The rules vary by school district. You may be able to show your job offer letter, invoice for hotel or temporary living, lease agreement and/or a letter from your employer. Once you decide on a school, the best thing to do is to call the administration right away and explain your situation.

 

  1. My partner will have to change jobs if we move. What should we do?

 

Unfortunately, you and your partner are the only ones who can decide if this is the right decision. We can tell you that you are not alone. As dual income homes become the norm, more transferees are moving with partners who will have to leave a job due to the relocation. Without a doubt, this is emotionally difficult for trailing partners who inevitably worry about finding a new job at the new location. It also presents a financial challenge as banks will now only consider the single remaining income for mortgage approvals. If your trailing partner can show proof of employment or an offer of employment in the new location, the bank will consider both incomes. Companies are aware of these challenges, however, and may provide you with spousal assistance benefits designed to help your partner find a new job at the new destination.

 

  1. What happens if the cost of living is higher in the new location?

 

The cost of living in the new location should be factored into your decision as to whether or not you want to accept the relocation or the new position. Some companies who may have a hard time recruiting specific talent to a high cost area or have a specific talent need in a higher cost location may offer a cost of living adjustment. This is usually in the form of a “reverse-graduated” payment, paid over three years to help ease the person into the higher cost area. However, these cost of living adjustments are rarely offered and the situation has to be unique.

 

  1. Why do I have to sign a payback agreement?

 

A payback agreement is a contract that you sign with your company stating that you will pay back a determined amount of the relocation expenses incurred if you decide to leave the firm within a certain time frame after the relocation is completed. Every company approaches the payback agreement differently and that can be confusing for HR, senior management and you. Since payback agreements do vary widely, be sure to read your agreement carefully so that you understand what is expected of you (and your company) after the relocation.

 

  1. What happens if I can’t sell my home?

If you cannot sell your home, it is almost always because of location, price, or condition. The way to overcome location and condition is to lower your price. If you cannot lower the price because you are upside down in the mortgage, then you will need to consider a short sale, where the bank will forgive the balance of the loan in lieu of foreclosure. Otherwise, you can rent the house if you have the time and resources to do so.

 

  1. Can I rent my own home and use temporary living to pay the first month’s rent?

 

Employers are learning to become more flexible with their benefits as one size does not always fit all. The best time to negotiate exceptions to the written policy is up front. In most instances, an employer will agree to substitute a month of rent for a month of temporary living, because, in most instances, the cost of a month of a lease is considerably lower than a month of temporary living. However, depending on the company culture, an employer will look to you to save the company money anywhere you can as you relocate. To them, a temporary living benefit is intended to help you until you find suitable other housing. If you have already found that housing, they might look at temporary living as no longer being necessary.

 

  1. What is a BVO?

 

BVO stands for Buyer Value Option. In a BVO, there are no appraisals of the home for sale. Instead, the home is listed and marketed until there is a purchase offer. Once an offer is obtained, that offer establishes the value (the “buyer value”), and that is what the employer offers the employee for the home. This value, because it has been established by an actual offer from an unrelated buyer, will be respected as fair market value. Once the offer is made, an unconditional, non-contingent offer is made by the employer to the employee; the employer then attempts to negotiate and close its own sale to the buyer who made the outside offer. If there is no offer made on the home within the initial marketing period, either a new marketing period will be established or the company will revert to an amended value option.

 

  1. How does the BVO benefit me?

 

The BVO price is arrived at by the actual current buyers so, if you are in an improving market, this is a great thing! You will not have to worry about home value being determined by historic rates. Unfortunately, if you are in a down market, the opposite is true. You will have to take market price, even if the home sold for more in previous years.

Stay tuned for questions 11-20 next week! Same time, same place.

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