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Considering a relocation? You’re not alone. One in nine people relocated last year, whether to a new neighborhood, a new state or even across the country.(1) If you’re not considering a move yourself, you probably know someone who is.
When it comes to packing up your life and moving, what should you expect? What factors should play a role in your decision—and how can you save money on relocation costs? How do you make smart real estate decisions when you don’t know the area?
These relocating tips can help you understand the process so that you can make a smooth and confident transition. Let’s get started!
Why Do People Relocate?
According to the Census Bureau data from 2016, just over 11% of the population moved in a one-year period. So why are people moving? The top reason people relocated was that they wanted a better home or apartment, followed by the desire to be closer to family and moving for employment reasons.(2)
Of those looking for a job, roughly half had considered relocation. And even for those who were not wanting to relocate, 66% said “more money” would make them reconsider.(3)
Questions to Ask Before Relocating
If you’re thinking about relocating, you want to be sure you’re making the right decision. After all, making a move is a big deal! Here are some questions to consider as you think about moving:
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- Are you excited about the job opportunity? It doesn’t make sense to move for a job that you know you’ll hate.
- Is the company culture a good fit? Whether or not you enjoy your coworkers and your work culture has a huge impact on your day-to-day life.
- Is there a long-term benefit? Think about your five-year plans for your career and your life.
- Does the math make sense? Don’t stop at your compensation. Consider the cost of living in your relocation destination too. If you’re moving to a city with a higher cost of living, will you still be able to make progress on your financial goals with your new compensation?
- If you’re married, is your spouse on board? Making a move can be tough, and it’s important to be on the same page. You’ll also want to consider how a move potentially impacts your spouse’s career.
- Do you like the area? Visiting the area before you move could give you a good idea of what it would be like to live there.
These questions just cover the basics. If you own real estate, weighing the financial impact of selling your home and buying a new one may be complex. Or if you have kids, you may need to consider other factors like school options. Moving isn’t a decision that you should take lightly, but sometimes it’s the best thing you can do for you and your future.
What Areas Are Popular Relocation Destinations?
Taking into account job market health, median housing prices and median salaries, the top relocation cities in 2017 were New York City, Los Angeles, Philadelphia, San Francisco, and Washington, D.C.(4)
And out of the top 20 relocation cities in the U.S., seven cities were in the South, six in the West, six in the Northeast, and one in the Midwest.(5)
Certain areas of the U.S. are more appealing to job seekers than others. Nearly 31% of respondents said the South was the best relocation destination compared to 16% who stated the Midwest. Not surprisingly, most people would prefer to relocate within their current region.(6)
How Much Does Relocating Cost?
Of course, how much your move costs depends on your specific situation. For example, a move within your state will likely be cheaper than moving from Illinois to California.
In a study by Worldwide ERC, the average costs companies pay to relocate employees were evaluated, regardless of whether the move is in-state or out-of-state. According to their data, companies spent an average of nearly $86,000 to transfer a current employee who owns a home. The cost for relocating a new-hire homeowner is slightly less, at almost $72,000.(7)
On average, companies pay just over $27,000 to transfer a current employee who is a renter and nearly $24,000 for a new-hire renter.(8)
When calculating your moving costs, you’ll have to think about not only the cost of physically moving your belongings, but also the closing costs for selling your home and buying a new one—or, if you’re a renter, the cost of getting out of your current lease and securing a new rental.
Here are some common expenses to consider:
- Closing costs on a home sale
- Real estate commission
- Cost for breaking your lease
- Packing up your home
- Moving furniture and belongings
- Cost of moving vehicles
- Unpacking furniture and belongings
- Security deposits for a rental
- Charges to turn on/off utilities
- Closing costs on a new home purchase
- Repairs/updates for a new home
These are expenses either you or your employer could cover, depending on whether or not your new job offers relocation assistance.
How to Save Money on Relocation Costs
After calculating all of the moving and housing expenses, you may feel overwhelmed. But the great news is that it’s still possible to save money when you relocate, either through getting relocation assistance from your new company or simplifying your move.
Find out if your new employer offers relocation assistance.
Should you expect to foot the bill for your moving costs on your own? Probably not. According to an annual survey by Atlas Van Lines, 87% of transferees received some kind of reimbursement for their relocation costs in 2017. New hires were less likely to get full reimbursement of their costs, but 81% of new hires still received some level of reimbursement.(9)
Keep in mind that how much your company is willing to reimburse may depend on the specifics of your position. In general, companies are more likely to reimburse costs for executive or mid-level positions than entry level jobs.(10)
Depending on your relocation assistance package, you could be reimbursed for costs such as home-finding trips, temporary housing, closing costs and real estate commission on the sale or purchase of a home, security deposits, transportation of vehicles, and packing and unpacking.(11)
While some companies will reimburse all of your costs, others offer a lump sum. It’s important to know exactly what your new employer will and will not cover, so you know how to estimate your out-of-pocket costs.
Consider downsizing your personal possessions.
Another way to save money on relocation costs is to sell some stuff! We’re talking about that armoire you never found the right place for or the bookcase that’s still in your garage. Now is the perfect time to get rid of items you don’t need.
There are two benefits of selling cumbersome furniture pieces you no longer need or getting rid of junk in your garage before moving. First of all, you’ll save on moving costs. Second, you could potentially make some extra money from the sale of those items to put toward your move. It’s a win-win!
How to Sell Your House Quickly When Relocating
According to an annual relocation survey, around half of survey participants were homeowners.(12) Owning a home adds an extra step to your relocation process. It’s not as simple as just giving your landlord a 30-day notice; you need to work with top-notch real estate agents to sell your home quickly and find the right place for you in your new city.
A quality real estate agent can be an invaluable resource to people in your situation—not to mention has already helped others like you dozens of times! They know exactly how to guide you through the process so that you price your home competitively, show off its best features, and get the best price. If you need to sell your house quickly, follow these tips.
Step #1: Get your home ready by focusing on small tweaks with a big impact.
If you really want your home to stand out in the crowd, you may need to make some changes. Switch out your couch throw pillows for fresh prints, add lamps to dark corners, declutter your cabinets, closets, and counters, and take an honest look at your home’s curb appeal. Remember, little updates can go a long way.
Step #2: Work with an expert real estate agent to get the price right.
If you’re selling your home on a tight timeline, you don’t have time to mess around. Work with your agent to settle on a competitive price that will bring as many potential buyers through your doors as possible.
Here’s the great news: When you’re working with a top-notch real estate agent, they will know exactly how your home compares to others that have recently sold in your area. You can lean on them to know what price will net you the most money but also close quickly.
Step #3: Sell your house before you buy a new one.
It may be tempting to buy a new place before your current house sells, but it’s a bad idea. You don’t need the financial risk of having two mortgages. It’s simply not an option if you want to make a good financial move.
How to Buy a House When Relocating
Once you have your current home under contract, it’s time to start thinking about where you’re going to live once you relocate. If those plans include buying a new house, here’s what to do.
Step #1: Find a real estate agent who’s a market expert.
Chances are, you’re relocating to an area you don’t know very well. That’s why it’s even more crucial to partner with a real estate agent who you can trust and is an expert in that area. They’ll be able to help you know what neighborhood to look in and what kind of home you can afford with your budget.
Looking for a pro? Try our Endorsed Local Provider (ELP) program to find expert real estate agents. ELPs are thoroughly vetted and sell nearly 3x as many homes as the average real estate agent. They are the perfect partner for helping you learn about your new city so you can make a smart purchase.
Step #2: Know your housing budget.
Before you start house hunting, make sure you know what you can afford. Stick to a payment that is no more than 25% of your take-home pay on a 15-year fixed mortgage. Put down at least 10% on your new place; a down payment of 20% is even better because you can avoid paying PMI (private mortgage insurance). Use our free mortgage calculator to estimate your monthly payment.
Knowing how much you can afford will help you target your home search to the neighborhoods and areas of town that fit your budget.
Step #3: Target your home search.
If you want to avoid renting and move straight into your new home, you may be squeezing house hunting into your weekend visits. That means you don’t have time to drive through every neighborhood or see every home on the market in your price range.
But that’s okay! When you work with a great real estate agent, you can trust them to help you narrow down your target areas so that you maximize your house hunting trips.
Step #4: Negotiate the contract and close on your new home!
There’s nothing like finding a home you love in your budget. Once you do, your agent will help you finalize the contract, clear any contingencies like the home inspection and appraisal, and coordinate closing details.
How to Find Real Estate Pros
The relocation process can be stressful, but working with a qualified professional can help things go smoothly. A trustworthy real estate pro is crucial in helping you make the most of your house-hunting trips. And they can also help you coordinate details with your real estate agent back home to ensure a smooth closing on both properties.
Buying and selling a home gets complicated, which is why you need a real estate expert with years of experience. A true pro will have helped people in your situation before, and they know how to guide you through the process.
Find real estate pros!