MISTAKES
AVOID THE TEN WORST MONEY MISTAKES TRANSFEREES MAKE
A lot can go right when a family transfers: landing a new, more challenging job, perhaps with a larger paycheck, getting a fresh start in an interesting city, purchasing a just-right house, seeing your housing dollars stretch further, meeting new friends. On the other hand, a lot can go wrong. Problems selling the old home or buying a new one head the list. Other costly problem areas include dealing with movers, difficulty adjusting to the new location, unforeseen expenses. And that's just a start.
That's why we provide this special report. Our goal is to help you negotiate the relocation maze successfully by avoiding the wrong turns other transferees have made.
Watch Out For These MONEY MISTAKES Mistakes At The Old Location
MONEY MISTAKE #1
Failing to negotiate a good relocation benefits package. Start by studying your company's relocation policy. Learn what benefits you're entitled to. Ask about others which aren't specifically mentioned. Here are some benefits you may want to pursue:
• house hunting and spouse job hunting trips for you and your family;
• corporate buyout of your home if it doesn't sell in a timely fashion;
• a self-marketing bonus if you do sell; • help with selling expenses;
• full reimbursement for moving household goods - be sure to ask about vehicle transportation and other large, fragile or valuable special items;
• a rebate or lump sum payment for a self-move; help with home buying costs, such as closing costs, mortgage fees, points, credit reports, title searches, etc.;
• gross-up payments on corporate reimbursements to cover your additional tax liability or an assigned sale through a third party to avoid tax consequences.
MONEY MISTAKE #2
Failing to get a cost-of-living comparison before accepting the salary. If the cost of living is higher in the new location, your firm may make you financially whole with a salary increase, a salary-based supplement such as a cost-of-living adjustment, a mortgage buydown or a corporate-funded down payment loan. If yours is a lateral move, be certain the transfer will financially leave you at least neutral, not poorer.
MONEY MISTAKE #3
Failing to involve the family in planning the move. Recognize it's not just the transferee's move - it's the whole family's move. Everyone will have a reaction to news of the transfer, to thoughts of leaving the old home and moving to the new, to leaving friends and possibly relatives behind. Face the fact that relocating is stressful both for you and for other family members and face family issues openly. Remember, ignoring the stresses of moving can result in the need for counseling - a costly remedy - or even divorce.
MONEY MISTAKE #4
Failing to price your home right. Setting your home's price at what you'd like to get, rather than what you're likely to get, is a big money mistake. Some transferees mistakenly set the price of the old house according to the cost of the new. What's likely to happen is your listing goes stale as your overpriced home languishes on the market. In the end, you may end up dropping the price dramatically below its value to spur interest in your old listing.
Another possibility is your overpriced home just won't sell. Then you'll be stuck in the costly situation of carrying two homes simultaneously - and face an expensive double move.
MONEY MISTAKE #5
Failing to assure appropriate treatment of household goods. First, minimize the expenses of moving household goods by downsizing, especially if you're paid a lump sum or not reimbursed for moving household goods. Second, insure your household goods properly. Third, understand what the mover's contract provides if your belongings are damaged or lost. For safety, carry jewelry, birth certificates and other valuables personally rather than trust them to the movers or the mail. Mistakes At The New Location
MONEY MISTAKE #6
Failing to get loan pre-approval. In the hubbub to relocate, don't overlook the importance of getting pre-approved for a mortgage. You'll negotiate from a stronger position if you present yourself as a "cash buyer" and will be a more attractive prospective purchaser to sellers who know you're ready and qualified to buy.
MONEY MISTAKE #7
Failing to learn the "culture" of the new city's real estate market. To avoid a buying mistake, it's crucial to know, for instance, whether homes in the new location typically sell close to the asking price or substantially below. Know what items normally convey. Learn about the costs of purchasing, including local taxes. Make sure you investigate zoning, neighborhood architectural in use restrictions. Take advantage of any home buying trips your firm sponsors and try to bring your spouse or family along.
MONEY MISTAKE #8
Failing to buy with an "exit strategy:" Even as you buy, keep resale in mind. Consider getting a pre-purchase appraisal and home inspection to ensure you're not buying a home sale headache.
Some transferees who move from a high-cost to a low-cost area are so pleasantly surprised by how much their housing dollars will buy they plunge into a home purchase without concern for getting the most house for their money. If you overpay now, chances are you'll eventually lose at sale. Likewise, if you buy a unique home which suits you but not most other purchasers, you'll have a hard time selling.
Caution: If you buy substantially more house in your move to a low-cost location, any future move to a high-cost location will be especially difficult; your family would need to get reaccustomed to a more modest home.
MONEY MISTAKE #9
Failing to establish your new family life. Don't lose time and money. If your spouse is leaving a job and needs another, act on it even before you move. Find out the details of your company's spouse employment assistance program, if any, to reduce the period of unemployment. At the new location, have a plan to start fitting in. Learn about sports, places of worship, get referrals of doctors, transportation options. Start living your new life.
MONEY MISTAKE #10
Failing to work with a relocation specialist. Perhaps the costliest mistake is neglecting to have a relocation specialist watch out for your financial and other interests. A relocation specialist is specially trained to work with transferees, understand your stresses and pressures, and help you navigate the relocation maze. An experienced relocation specialist can help you prevent the trip-ups transferees make. For professional assistance with your relocation, please call!
2 Bonus Points To Remember
- Save home sale and purchase records, as well as any un-reimbursed moving expense receipts. You'll need them to determine the taxes you owe now and in the future, and keeping complete records can help you lower your tax bill.
- Create insurance records. When you're consolidating belongings, packing, and preparing for the move, take an inventory for your insurance records. Also, take photos and videos of your possessions. You'll need to be able to prove you had it when you suddenly don't.
