The 2009 First‐Time Homebuyer Tax CreditUsing the Credit - The Dream of Homeownershipa Reality

“My new employer is picking up the cost of my relocation” you say? Let’s rethink this statement for a moment. If your new employer is picking up the tab for your relocation, let’s contemplate the lower actual salary level that was likely negotiated compared to the increased salary that could have likely been negotiated in the opposite scenario where a local full service real estate group with a relocation expert is procured on your own to manage the sale of your house, locate temporary housing if necessary, find a capable Realtor to locate your new destination home, and provide you with contacts such as a mortgage company to finance the purchase of your new house, movers and cleaners. After all, regardless of whether a relocation company is involved, a full service selling or buying real estate agent who is experienced in relocation will help organize these aspects of your move. When faced with career relocation, management of your move can be a daunting task. At some point, your new employer will likely present you with a relocation package of information provided by a relocation service with a list of benefits that goes on and on; from locating a Realtor to sell your current house and locating a Realtor to help find your destination home, and in some cases a guarantee to purchase your current house if it doesn’t sell. The appearance of having a relocation company handle the entire relocation sounds great however it is important to keep in mind that there is still a minimal commitment of time and effort required when moving. There is paperwork to be completed and you are still the ultimate decision maker which will require you to stay involved in the details, and the redundancy of added (duplicate) contacts can be irritating and time consuming. Most importantly, what is not easily determined is the real cost to you of employer sponsored relocation services in comparison to a scenario where a competent full service real estate group is located on your own to manage the process for you. When an employer picks up the tab to arrange and outsource all of the relocation tasks, the cost to the employer is typically recaptured by spreading the cost over a statistical average anticipated span of employment, and via a sizeable referral fee charged to the buying and or selling real estate agent and other vendors for which the unfortunate impact is the elimination of top Realtors and vendors from the selection of possible agents available. This is because the top Realtors are generally busy enough so incremental business provided through a relationship with a relocation company isn’t always worth the cost. The end result in many cases is that a client is referred to an agent that they might not have chosen to work with on their own, and ultimately, in many cases is not satisfied due to lack of chemistry between the agent and client, or simply dissatisfaction with the Realtors motivations and or knowledge. “The relocation company plan contains a buyout option and a bridge loan option against the equity of my current home” you say? In most cases, a buyout option will require an appraisal to determine market value and the buyout price will be based on the appraisal unless a minimum purchase price is stipulated. In the case of the latter, any shortfall from the buyout price and the market value will be covered by the relocation company / employer, and again, ultimately you through a lesser salary than what you might have enjoyed had you opted to not utilize the employee sponsored relocation service. If the home ultimately sells for more than the buyout price however, the profits do not go back to the employer or you. Similarly, a bridge loan will only be provided against equity after outstanding mortgage balances, which will be determined by an appraisal. A Realtor can project what your house will likely sell for by preparing a Competitive Market Analysis, price correctly, market the house, and if done right, sell it in the necessary amount of time, regardless of market conditions. Should you locate your new home prior to the settlement of the home being sold, a bridge loan can be arranged via referral to a reputable mortgage company, and failing that, there is always the sale agreement with a home sale contingency to ensure your prior house is sold before settling on the new home. In the end, there’s no free lunch. Careful weight of the real costs and benefits to you of an employer sponsored relocation service on the one hand versus the costs (or savings) and benefits of maintaining control of the relocation process via use of a full service real estate group to help manage your relocation will help you make an informed decision.