Whether you are relocating for the first time or already have several moves under your belt, we placed some key considerations below that everyone should know about relocation benefits and how much relocation costs. It’s important that you consider every aspect of a new move and the potential impact it will have on you, your family and your bottom line. If you have relocated before, then you may already know that some components of your relocation package may in fact be negotiable. But, this is not necessarily the case for all companies and all employees. Nonetheless, it’s important for you to be armed with the best, most up-to-date information so that you can make an educated decision and your relocation will be off to a good start.
So, how do you know what relocation benefits you need and what you should be asking for? Which benefits are considered customary? These are questions that we receive from people every day.
Review and Evaluate Your Relocation Benefits
The best way to get started is to review and evaluate the benefits being offered. It’s very important for you to know and fully understand what’s included and paid for by your employer, versus any expenses that you might have to pay for with your own monies. It is also valuable to do a little research to find out, “how much does relocation cost”, so you know the total capital needed, and therefore your bottom line. To better assist you, we have created this list of the top things that you should negotiate as part of your relocation package:
Home Finding Trip $
Whether you are planning on buying a home or renting one, you will need the opportunity to scout out a place to live in the new location. Travel expenses can be quite costly, not to mention the high rate of air travel if you need to make flight reservations on short-notice. If you are moving with your family, those travel expenses will be even higher. Especially if you plan on bringing your family members with you on your home finding trip. Be aware that some employers might only cover travel expenses for you and your spouse or partner.
Moreover, what happens if you don’t find a new home during your home finding trip? Some employers might pay for a second trip, while others may not. Make sure that this is an available relocation benefit. Afterward, hop on a travel website to see what airfare and a hotel will cost you!
Home Sale Benefits $$$$
Do you have a home to sell in your current location before you can buy a home in the new location? If so, you need to find out if your employer has a home sale assistance program, and whether or not you are eligible to participate in it. Also, know that not all home sale programs are created equally. Some have increased tax burdens for employees, so make sure you know how this assistance will affect you. Selling a home is always the single most expensive cost in the relocation process. On average in the US selling costs equal 8% of the home’s value (6% for realtor commissions and 2% for closing costs) but can vary based on the area. For more information on the taxes associated with relocation home sales, click here and read about BVO relocation home sale programs.
Temporary Housing $$
If you are unable to find a home right away, if you decide to build one, or if you have any other delays in your ability to move into a permanent residence, check and see if your employer offers temporary housing assistance. This can be a great option. We’ve found that it takes away some of the stress you might be feeling over the need to find a home. After all, you deserve the chance to understand your new city and what areas or neighborhoods might be best for you and your family. Some employers offer relocation benefits that cover the cost of moving into temporary accommodation for 30 days, or longer in some cases . Temporary housing can be pricey – if the local hotel is $100 per night expect temporary housing to be $125 per night!
Mortgage and/or Bridge Loan Assistance $
Some employers have established relationships with banks and other financial institutions. That means they may offer special loan and mortgage products to their employees. Make sure that you are aware of those relationships and that you are working with a preferred provider. This is a very important benefit to have. Mainly because when you work with a preferred provider, the loan officers may help expedite the loan approval process saving you money in the long run.
Home Purchase Closing Costs $
If you are buying, the buyer normally does not cover the realtor commissions (the seller customarily pays both realtor commissions). However there will be closing costs associated with the transaction. These costs may or may not be included as a relocation benefit paid for by the employer. Areas can vary, but home purchase closing costs on average are 2% of the home’s value. Ergo, make sure that you fully understand if these items are covered. If they are, verify how these items can impact your tax burden.
Household Goods Transportation and Storage $$$
While some employers include the cost of transporting your household goods, they may put a cap on the weight or total dollar amount. Other employers don’t include the cost of packing, unpacking, and/or any type of storage that might be necessary. The average shipment in the US last year was 17,000 lbs. and cost just under $13,000. Having the costs and services for your household goods shipment covered as a base line benefit is recommended . Also, be sure to consider any family heirlooms or priceless art or antiques that might require special attention. There are additional costs for “special care” so be sure you know what your employer is willing to provide.
Still have questions? Don’t worry! Call us and we will be glad to help you with any questions you might have. For more information, please contact ARC:
TOLL FREE 866-697-3561 OR www.arcrelocation.com