Selling House for Job Relocation
Landing a dream job in another place is one of the most compelling reasons for people to pick up their roots and move. There's a certain allure to answering the call of starting life anew, with a new job in a new city, in possibly greener pastures, that holds so much promise to many individuals.
With that said, a rosy career opportunity in a new location has the tradeoff of having to make tough decisions, and one of those involves selling your house. Sometimes grabbing this opportunity requires you to drop everything in support of the move: you absolutely need to sell quickly!
On average, selling a house takes roughly three months from listing to closing. With job relocations, you don't have the luxury of waiting that long as you'll likely have to move sooner than intended. Opportunity waits for no one, as they say. That doesn't mean you'd take the first offer that comes your way--you just have to be wise about it so you can sell for the price you want while staying within your timeline.
In this article, we'll walk you through all the things you need to prepare for in anticipation of your job relocation, the tax implications of your home sale, what you can do to be able to sell quickly, and tips to make the process of selling your house as hassle-free as possible, so you can make the most out of the incredible career opportunity presented to you.
Things to Prepare for When Selling Your House Because of a Job Transfer
Find Out the Fair Market Value of Your Home
The listing price is what gets buyers to view the property.
You don't want to have it too high that they're instantly turned off, nor do you want to price it too low that you miss out on profits--or even worse, leave you in the red after all the closing costs.
To be able to come up with a competitive listing price and determine how long it might take to sell your house, you must do a comparative market analysis or CMA as it is known in real estate circles. A CMA involves looking at "comps", or recently sold comparable homes in your area. This means they are about the same size, age, style, and contain the same features as your home.
You can do a CMA yourself, or if you're working with a real estate agent, they can do this for you as part of their services.
Understand the Tax Implications When You Sell Your House
Real Estate Transfer Tax
A transfer tax in real estate is a one-time tax payment that you have to make after selling the property in order to make the transaction legal and official. This is an ad valorem tax, which means "according to value", and is paid to the local government where the house is located.
Property Taxes
Similar to transfer tax above, property taxes are an ad valorem tax and can also vary depending on the jurisdiction. However, these are recurring taxes that must be paid annually and are calculated as a percentage of your home value.
Capital Gains Tax
Whether or not you have to pay capital gains taxes depend on three things: a) appreciation in your home's fair market value; b) your income tax bracket; and c) how long you've owned your property.
A job relocation can suddenly fall on your lap, leaving you with little time to settle your affairs and sometimes a hefty tax bill to boot.
For instance, if you need to sell your house fast after owning it for just a year, you'd be subjected to short term capital gains taxes--which can go up to 37% if you're in the top tax bracket.
On the other hand, if you owned the house for more than a year, your profits from the sale will be subject to between 15%-20% of long term capital gains tax.
Fortunately, the Internal Revenue Service (IRS) allows you to activate a tax shield on all your gains, called a homeowner exclusion, provided you satisfy the following requirements:
- Residence: the house must be considered your primary residence, which means you have lived in the home for a minimum of two years prior to the sale
- Ownership: you must own the home for at least two years
- Lookback: you haven't claimed the tax break in the last two years
If you can't meet the above requirements, you can still be eligible for a partial exclusion of gain! You'll definitely qualify for this since you're selling your house because of a job relocation.
Just remember to consult a tax professional to find out how much exemption you can claim before you start the selling process and ensure that you're doing everything correctly.
Plan Out Where You’ll Live Next After the Sale
Sometimes, your house may sell sooner than you think. In that case, it's better to figure out your housing arrangement early on in the process, to avoid the stress of looking for somewhere to move once you sell.
You can work a rent-back agreement into the sale contract, allowing you to stay at your former home while you look for a place to live in your new city, and sparing you the hassles of having to move twice.
Find Out What’s in Your Relocation Package
A job relocation is a major, life-changing decision and you definitely deserve to be compensated handsomely for it.
Companies usually have a job relocation assistance package and are partnered with a relocation company to facilitate the move. If you're a new hire from out of state, you can negotiate this with your new employer.
The job relocation package usually includes a packing service, a moving company, temporary housing, a paid house-hunting trip, and assistance if you need to sell your home.
Factor in Your Moving Expenses Into Your Budgeting
Selling your house and getting a place at your new job location is just half the battle.
Once all the deals are closed, you'll have to figure out how to physically move your entire life across state lines, or in some instances, across the ocean.
Hiring a professional moving company costs around $5,000 on average--not exactly chump change, but they'll do all the heavy lifting for you, literally! Packing services, transportation costs, and loading/unloading assistance is usually bundled in to make it efficient and convenient for you.
If you don't want to fork out that kind of money, you can tap into your own sweat equity by going DIY. While a lot less expensive, you'll still need to spend a few hundred dollars to purchase essentials such as boxes, moving straps, and packing tape.
Regardless whether you DIY or go with the pros, setting aside a reasonable amount of money for the move is important.
Tips When Selling Your House to Move to a New Location
Check the Pulse of the Local Real Estate Market
Knowing local market conditions would help you decide whether it would be more financially rewarding for you to convert your current house into a rental than selling outright.
Oftentimes, waiting for a selling market to emerge can be worth it. The wait can be an opportunity for you to make upgrades before you sell for a much higher price, or alternatively, if you like the cash flow, just make a few cosmetic fixes and rent it out.
On the other hand, having a hot seller's market in your area means you wouldn't have to worry so much about your house sitting in the market for too long. Furthermore, since demand outpaces supply, sometimes you can get a good price just selling in as is condition.
Pay careful attention to real estate market trends so you'll be able to do what's right for you.
Arrange a Pre-listing Inspection
A home inspection onlycosts $400 and allows you to get ahead of the issues that might scupper your home sale. A professional inspector will look at every nook and cranny of your home to assess your property's condition and ensure that everything is in good working condition or otherwise recommend fixes if some issues are found.
If the inspection turns up nothing, the inspector's report serves as a clean bill of health for your home and can be very reassuring to potential buyers looking for a move-in ready home.
Address Significant Issues
According to the National Association of Realtors, around 41% of home buyers aren't too keen on making renovations for homes they just purchased. That said, fixing significant issues such as those involving the plumbing and the septic system, electrical system, foundation, and pests can attract a wider pool of prospective buyers. While these repairs possibly involve hefty out of pocket expenses, making the necessary major repairs can vastly improve your selling price.
Leaving these unaddressed can lead to a rapid deterioration in your home's condition, and as you don't know for certain how long your home is going to sit in the market, the situation could spiral out of control sooner than you think.
A Little TLC Goes a Long Way to Boosting Your Asking Price
Cleaning and decluttering your house prior to your job relocation can add about $2,000 to your home's sale price. It costs a few hundred dollars, but with a minimum fourfold return, it's definitely worth it!
What to Do With Your House When You Have to Move for a Job Relocation
Option #1: Traditional sale
Sell With a Real Estate Agent
You can sell the traditional way by listing with a real estate agent if you're looking to get top dollar for your home sale andyour selling timeline is not very tight.
The home selling process is complicated enough as it is, and with the added pressure of having to uproot yourself and your family from everything that's familiar, it can drive anyone crazy! Working with real estate professionals can take a load off your plate, allowing you to focus on getting ready for your new job and looking for a new home.
A real estate agent will be in charge of everything involved in selling a house such as: staging your house for sale, endless open houses, negotiations, and finally closing the deal. They can also advise you on home improvements to get the right price for your home.
However, take note that the relative ease it affords you when you get a real estate agent doesn't come for free! Home sellers have to pay the commission (for both your agent and the buyer's) which is around 6% of the selling price. Add to this the closing costs you also have to pay, the mortgage interest that accrues as the house sits on the market waiting for a buyer, the upfront repair and renovation costs you have to shell out at the start--you can expect a significant dent in your profits.
Sell the House Yourself
If you'd like to have full control over the real estate transaction and not have to shave realtor commissions off your profits, you can go sell it yourself through For Sale by Owner (FSBO).
In an FSBO, you're solely responsible for staging your home, conducting an open house, answering inquiries, evaluating offers, negotiating with potential buyers, and finally closing the deal.
Since you'd be going into this without the expertise of a professional, there would be plenty of research and legwork involved. While it can certainly be daunting, approximately 7% of sellers go this route.
Option#2: Convert It Into a Rental Home
Turning your old home into a rental property is viable if you have enough financial runway and won't need money from the sale to fund your job relocation and the purchase of a new house. If you haven't built up much equity, holding on to it for a bit longer would allow you to add to your equity from the rental revenue.
A reminder though: when you keep a real estate property as a rental, you're responsible for carrying costs. These costs include homeowner's insurance, homeowner's association dues, property taxes, and property management fees--on top of your mortgage payments. If the monthly rent can cover it, well and good. But sometimes, you'll have to cough up a little extra, in case of urgent repairs or replacements.
In addition to the above, what most people don't know is that being a landlord is akin to having another job on its own. And it's not for everyone.
The heater may conk out in the middle of the night, and, unless you have a property manager who will field these types of calls for you, you'd definitely be woken up in the middle of the night, scrambling to solve your tenant's problem.
Late payments, careless tenants trashing your property, maintenance issues: these are just some of the headaches you may encounter running a rental. If you don't think you have what it takes to be a landlord, then it might be better if you just...
Option #3: Sell Your House Off-Market to a Cash Buyer
In moving for a new job, probably your top priority is to sell your house quickly.
Your best bet in selling your property fast is a cash home sale. Since time is of the essence, you'll likely be selling your property in as is condition. Most buyers prefer move-in ready homes instead of possible fixer-uppers, so you're wondering if there's indeed a market for your home.
The answer lies in a special type of buyer: the real estate investor.
Real estate investors include small- and large-scale landlords, house flippers, or "we buy houses" companies who specifically look for motivated sellers who need to get property off their hands for a myriad of reasons, including job relocation. These real estate investors don't have to wait for loan approval from lenders as they have cash ready to deploy for opportunities like this so they can close really quickly. This frees you from the agonizing wait of looking for a buyer.
Sounds awfully convenient, right? What's the catch?
Selling your house fast in as is condition means the real estate investor will be the one to deal with the needed repairs. These repairs are then factored in their fair cash offer--usually at 70% of After Repair Value (ARV)--net of renovation costs. This means, if your property has an ARV of $120,000 and a repair cost of $20,000, expect their offer to be in the vicinity of $70,000 (70% of $100,000).
Nevertheless, accepting their cash offer saves you plenty of time, allowing you to move on with your life sooner with money in your pocket. As an added bonus, you don't have to pay commissions to anyone when you sell since you're dealing directly with the buyer.
Key Takeaways: Selling a House for a Job Relocation
Sometimes you'd think you're putting down roots the moment you purchase a home.
But then, a promising job opportunity elsewhere presents itself, and it's something that gets you really excited, so you say "yes" immediately. Fortunately for you, information is right at your fingertips and there are plenty of ways to make your move go as smoothly as possible even if you own property: you can either sell or rent it out in the meantime.
But if you're pressed for time, go ahead and skip inspections, appraisals, upgrades, and sell as is! At House Buyer Network, you get all the benefits of a fast cash sale despite doing very little to the property. We spare you the drawbacks, fees, and uncertainties of a traditional sale.
Ready to check out our fair cash offer? Fill in the form below and we'll have it ready in 24 hours. If everything's good on your end, we can close in as little as 7 days! We even cover all the closing costs for you.
Got questions? Call us at (855) 835-2544 and we'll happily answer them for you.
