Month: November 2020

Categories
Corporate Relocation Corporate relocation tips Domestic Relocation Domestic Relocation Tips Global Relocation Global Relocation Tips Relocation Best Practices Relocation Management Relocation Policy Review Relocation Programs

Expedited Bidding Benefits: How Your Company Can Gain Immediate Results

Two male and two female Relocation Management Company representatives presenting their proposal by video to a male Human Resource Professional who hopes to gain expedited bidding benefits

If your company is seeking better results from your relocation program, expedited bidding benefits bring immediate savings. As many companies learn, outsourcing the management of their relocation program to a Relocation Management Company (RMC) provides several advantages. Doing so through a quick process helps the company achieve even greater results in the short term. Companies that use an expedited bidding process report significant savings in both time and costs.

GMS’ benchmark study of companies that leverage an expedited approach to bidding on the management of their relocation program show why this is a preferred process. Our team of global relocation experts has identified the top five expedited bidding benefits that companies can expect.

Top 5 Expedited Bidding Benefits

1. Cost Savings Right from the Start

Companies instituting an expedited approach create competition in the process. Relocation Management Companies pursuing their business will put forth their most competitive fee structures. Direct costs are likely to be the lowest in the quest to obtain the account. With these immediate savings from the expedited bidding process, companies are assured of cost effective solutions.

2. Complimentary Consulting

Some of the most valuable expedited bidding benefits related to mobility consulting. As part of the process, companies can request many of the following at no cost:

  1. Policy development and revisions
  2. Relocation program design
  3. Current policy reviews

As part of this process, companies can learn much about an RMC’s abilities, including:

  1. Knowledge of relocation processes
  2. Level of experience on points important to the company
  3. Consulting work quality and timeliness

3. Speedy Implementation Saves Time and Offers Quick Access to Expedited Bidding Benefits

Expedited bidding benefits relating to time savings can directly correlate to cost savings. The quicker a relocation program be implemented, the quicker the company achieves program savings and efficiencies. GMS’ data shows that on average, more than 90% of companies using expedited bidding complete their relocation program implementation in just 22 days. Given the amount of work that may be involved, including creating relocation APIs, policy documents, and communication, a shorter implementation timeframe lets the company quickly return its focus to other strategic objectives.

4. Process is a Better Fit for Buying Solutions

Companies that retain an RMC to manage its relocation program understand they are buying solutions that will help their employees. As a result, these solutions require a much different approach than the process they would use to purchase equipment parts or to source machinery. Ultimately, relocation management requires that the company ensures the right fit for the right reasons. The right fit ensures the company will maximize their expedited bidding benefits.

5. Frees up Administrative Burden of Formal Requests

Companies that fully understand their purchasing processes know the amount of administrative burdens and resources necessary to complete formal Requests for Information and/or Proposals. By foregoing these types of resource-intensive approaches that often create more problems for the company, employees can pursue value-added activities while RMCs carry the burden of responses.

What Should Companies do to Gain Expedited Bidding Benefits?

Companies should seek to gain expedited bidding benefits by utilizing an expedited process for outsourcing the management of their relocation program. Relocation Management Companies with extensive industry experience and knowledge will prove to be the best resources in this effort. Qualified RMCs will guide companies to successful results with a customized, right-fit program and greater expedited bidding benefits.

Conclusion

GMS’ team of corporate relocation experts has helped thousands of our clients with their relocation programs.  Our team can help your company gain the maximum amount of expedited bidding benefits by leveraging our expertise to present the most cost-effective and efficient relocation management solutions.

GMS was the first relocation company to register as a “.com.” The company also created the first online interactive tools and calculators, and revolutionized the entire relocation industry. GMS continues to set the industry pace as the pioneer in innovation and technology solutions with its proprietary MyRelocation® technology platform.

New SafeRelo™ COVID-19 Knowledge Portal

GMS recently launched its new SafeRelo™ COVID-19 Knowledge Portal featuring a number of helpful resources including:

  • Curated selection of news and articles specific to managing relocation programs and issues relating to COVID-19
  • Comprehensive guide to national, international, and local online sources for current data
  • Program/Policy Evaluation (PPE) Tool for instant relocation policy reviews

Contact our experts online to discuss your company’s interest in obtaining expedited bidding benefits, or give us a call at 800.617.1904 or 480.922.0700 today.

We're Here to Help! Request a Courtesy Consultation

Are you ready to talk to a Mobility Pro? Learn how GMS can optimize your mobility program, enhance your policies to meet today’s unique challenges, receive an in-depth industry benchmark, or simply ask us a question. Your Mobility Pro will be in touch within 1 business day for a no-pressure, courtesy consultation.

Companies Planning Their Return to Workplaces Safely Must Balance Several Issues

Female client with protective face mask and surgical gloves for protection against virus, keeps social distancing at waiting room, sitting at chair and looking at paper, with two chairs with information sign, between next client in bank

Many companies are currently planning their return to workplaces safely following the initial phases of the COVID-19 pandemic. In some cases, this may require a significant investment in new equipment, training, and development of new processes. A number of issues should be considered to ensure employee safety, clear communication, and business continuity. Ultimately, flexibility may be the key concept that helps keep everyone focused on several important considerations.

Changing Expectations Impact Return to Workplaces Safely

As recently as June 2020, many senior executives expected up to 50% of their employees or more would return to workplaces safely. At that time, several states, counties, and cities had begun to enter the latter stages of their coronavirus reopening plans.

However, new cases continue to rise in various parts of the nation. The Conference Board published a survey that finds that only 28% of U.S. employees believe they will return to workplaces safely by the end of this year. In fact, the survey reports that 31% of employees are not comfortable returning.

Trust is Another Major Issue

Trust in how companies can ensure safety as they arrange for employees to return to workplaces safely is a major issue. According to Edelman, only 50% of employees believe office spaces are safe for them to return. Additionally, large numbers of employees have significant concerns relating to using or visiting the following everyday common activities:

Many of the employees’ concerns relate to issues surrounding sanitation and cleanliness, as well as being in confined spaces with possible COVID-19 exposure.

Even though they may have concerns about their return to workplaces safely, many employees currently working from home do want to return. In a survey published at Digital.com, the majority of individuals working from home are eager to get back to their offices and facilities.

What Does This Mean for Companies Planning Their Return to Workplaces Safely?

Since many employees do want to return to workplaces safely, it is important for companies to address their concerns. There are many helpful resources that provide guidance for employers to ensure safety in all aspects of the working environment. The COVID-19 pandemic continues to be a major public health issue. As a result, employers should focus on communicating how they plan to keep employees safe in the workplace.

What Should Employers do?

Employers should create a project team that will develop plans for their return to workplaces safely. This team should research important resources and information in order to identify what will work best for their specific situation. Employers should retain flexibility in their plans to account for new information and changing expectations.

Employers should work with a Relocation Management Company (RMC) that has experience with corporate relocations and individual employee moves. RMCs with knowledge and experience can help employers identify valuable resources that will assist them with their planning efforts.

Conclusion

GMS’ team of domestic relocation experts understand how to arrange for group moves of offices, employees, and equipment. Our team can help your company understand how identify and address all of the issues involved in helping employees return to workplaces safely.

GMS was the first relocation company to register as a “.com.” The company also created the first online interactive tools and calculators, and revolutionized the entire relocation industry. GMS continues to set the industry pace as the pioneer in innovation and technology solutions with its proprietary MyRelocation® technology platform.

New SafeRelo™ COVID-19 Knowledge Portal

GMS recently launched its new SafeRelo™ COVID-19 Knowledge Portal featuring a number of helpful resources including:

  • Curated selection of news and articles specific to managing relocation programs and issues relating to COVID-19
  • Comprehensive guide to national, international, and local online sources for current data
  • Program/Policy Evaluation (PPE) Tool for instant relocation policy reviews

Contact our experts online to learn more about how companies can plan for their return to workplaces safely, or give us a call at 800.617.1904 or 480.922.0700 today.

Request your complimentary relocation policy review

Categories
Corporate Relocation Corporate relocation tips

2020 Phoenix Relocation: Where are the Companies Coming From?

Corporate relocation companies in Phoenix, AZ

The Greater Phoenix Economic Council reports that many companies are considering a 2020 Phoenix relocation or expansion. In their October 2020 Prospect Overview, a number of significant data trends are clearly visible. Looking at the data relating to the prospects’ region of origin, we can see the following:

California2528%
New York67%
North Carolina44%
Colorado33%
Texas33%
Florida22%
Illinois22%
Washington22%
Georgia11%
Maryland11%
Nevada11%
New Jersey11%
Ohio11%
Pennsylvania11%
Tennessee11%
Virginia11%
Unknown1416%
International2022%
GRAND TOTAL89100%

One clear data trend is that there are a significant number of companies from the next-door state of California that are considering relocating to Phoenix. The number of companies coming from California is more than four times the number of companies coming from New York. There are usually a number of reasons that a company may desire to initiate a 2020 Phoenix relocation. However, there are some factors specific to California that may be influencing company’s decisions to accelerate their relocation.

What are the Major Factors Driving California Companies to a 2020 Phoenix Relocation?

In looking at the major factors that are driving companies to leave California, three of the most significant factors are:

  1. Cost of Living
  2. Taxes
  3. Business Regulations

Reviewing these major factors in California versus Arizona may show why many companies have a 2020 Phoenix relocation on their agenda.

Factor 1: Cost of Living

On average, the cost of living in Los Angeles versus Phoenix is 67% more expensive. This is a significant different between these two major cities. Nearly every category by comparison costs higher in Los Angeles. Housing costs are 188% more in Los Angeles than in Phoenix. Transportation costs are also significantly higher in Los Angeles, over 40% higher than in Phoenix. From a cost of living standpoint, both employers and employees can benefit with a 2020 Phoenix relocation.

Factor 2: Taxes Drive Many Companies to Plan for a 2020 Phoenix Relocation

Comparing the tax situation in California versus Arizona shows taxes are much higher in California. A comparison of the differences shows the following:

 CaliforniaArizona
Average State Income Tax Rate9.3%4.54%
State Sales Tax7.25%6.60%
Property Tax Per Capita$1,449$1,043

The top state income tax rate in California is an astonishing 13.3%, currently the highest in the nation.

24/7 Wall Street reports that of the states with the highest and lowest taxes, California ranks near the top at #14 on the list for highest taxes, while Arizona ranks near the bottom at #46.

The Tax Foundation noted in a previous study that the five highest state-local tax states (the combined effect of all state and local taxes) were:

  1. New York 12.7%
  2. Connecticut 12.6%
  3. New Jersey 12.2%
  4. Illinois 11.0%
  5. California and Wisconsin 11.0% (tie)

Certainly taxes are a major factor for any company considering a relocation. The significantly different tax rates between California and Arizona provide a strong incentive for a 2020 Phoenix relocation.

Factor 3: Business Regulations

Business regulations can cover a variety of issues, from the necessary permits required to construct office buildings to the number of parking spaces required in a shopping center. It could also include topics such as how workers are classified. For example, California recently passed the AB5 Law requiring many companies to classify “gig” workers as statutory employees, not independent contractors.

Recently Uber and Lyft were successful in their efforts to stop AB5 from impacting their businesses. However, some other businesses impacted by AB5 are not covered in this initiative. Also, there is the specter of continued and increasing regulations relating to how companies actually conduct their business. Locations, employees, products and more are all impacted by California’s extensive regulatory environment.

By comparison, Arizona has been successful in creating a welcoming business climate. The state’s economy continues to grow along with the national economy, and consistently exceeds 2% over time. This stable growth rate is appealing to many businesses. It is also very easy and inexpensive to establish a business in Arizona. The Arizona Commerce Authority notes several ways that the state has reduced regulations:

  1. Streamlining Tax Collections
  2. Eliminating the Need for Multiple (State & Local) Tax Licenses, Returns, and Audits
  3. Reducing Red Tape and Paperwork
  4. Right-to-Work State Ensuring Labor Peace and Business Stability

What Does This Mean for Companies Looking at a 2020 Phoenix Relocation?

As can be seen by the data from the Greater Phoenix Economic Council, the benefits of relocating from California to Arizona are driving many companies to consider a 2020 Phoenix relocation. Employers in California should look at the three major factors of cost of living, taxes, and business regulations to determine if their company, employees, and customers might benefit in multiple ways with a relocation to Phoenix.

Companies should work with a Relocation Management Company (RMC) that has direct experience with state-to-state relocations. RMCs will have knowledge and experience to help companies determine the best plan for a 2020 Phoenix relocation.

Conclusion

Global Mobility Solutions’ team of corporate relocation experts has helped thousands of our clients understand how to approach a corporate relocation from one state to another state. Our team can help your company determine if a 2020 Phoenix relocation should be part of your future plans.

GMS was the first relocation company to register as a “.com.” The company also created the first online interactive tools and calculators, and revolutionized the entire relocation industry. GMS continues to set the industry pace as the pioneer in innovation and technology solutions with its proprietary MyRelocation® technology platform.

New SafeRelo™ COVID-19 Knowledge Portal

GMS recently launched its new SafeRelo™ COVID-19 Knowledge Portal featuring a number of helpful resources including:

  • Curated selection of news and articles specific to managing relocation programs and issues relating to COVID-19
  • Comprehensive guide to national, international, and local online sources for current data
  • Program/Policy Evaluation (PPE) Tool for instant relocation policy reviews

Contact our experts online to learn if your company should consider a 2020 Phoenix relocation as part of your corporate plans, or give us a call at 800.617.1904 or 480.922.0700 today.

We're Here to Help! Request a Courtesy Consultation

Are you ready to talk to a Mobility Pro? Learn how GMS can optimize your mobility program, enhance your policies to meet today’s unique challenges, receive an in-depth industry benchmark, or simply ask us a question. Your Mobility Pro will be in touch within 1 business day for a no-pressure, courtesy consultation.

Categories
Global Relocation Global Relocation Challenges Global Relocation Tips Global Relocation Trends Immigration Rules Visas and International Travel

2020 Inbound Immigration to the United States: Where are the Workers Coming From?

indian students in a class room

The U.S. Department of Homeland Security (DHS) reports that 2020 inbound immigration for the Fiscal Year (FY) First Quarter saw over 117,000 foreign nationals enter as new arrivals. This number is the same as the FY 2019 First Quarter figure.

Table 1B in the report shows 6,839 new arrivals in the employment-based preferences category. This total is further delineated by several employment-based classes, including:

First: Priority workers 493
Second: Professionals with advanced degrees, exceptional ability 1010
Third: Skilled workers, professionals, and unskilled workers 3537
Fourth: Certain special immigrants 589
Fifth: Employment creation (investors) 1210

The U.S. Department of Labor (DOL) issues labor certifications for both permanent and temporary employment of foreign workers under several programs:

  • Permanent Labor Certification
  • H-1B Specialty (Professional) Workers
  • H-2A Temporary Labor Certification (Seasonal Agricultural)
  • H-2B Temporary Labor Certification (Non-agricultural)
  • D-1 Crewmembers Certification

Foreign workers hired under these programs represent a portion of the new arrivals for employment-based preferences in the 2020 inbound immigration figures reported by DHS.

2020 Inbound Immigration: Countries of Origin

New arrivals in the employment-based preferences are part of the category of “Lawful Permanent Residents.” DHS notes that thirty-seven percent of new lawful permanent residents arrived from six top countries of origin:

  • Mexico
  • People’s Republic of China
  • Vietnam
  • The Dominican Republic
  • India
  • The Philippines

According to the Migration Policy Institute (MPI), immigrants from Vietnam usually arrive to the U.S. through family reunification, not through employment channels. The same holds true for immigrants from the Dominican Republic.

By comparison, MPI notes that Chinese nationals received the second-largest number of H-1B visas in FY 2018, after Indian nationals. For Indian nationals, MPI reports that nearly half of the immigrants from India obtained lawful permanent residence through employer sponsorship.

2020 Inbound Immigration to the U.S. from India: Where are the Employment Centers?

The top 5 states where more than half of the 2020 inbound immigration from India reside are:

  • California
  • New Jersey
  • Texas
  • New York
  • Illinois

The top 4 counties that serve as destinations for 2020 inbound immigration from India are:

  • Santa Clara County, California
  • Middlesex County, New Jersey
  • Cook County, Illinois
  • Alameda County, California

The two counties in California comprise the bulk of Silicon Valley. Cities in Santa Clara County include San Jose, Mountain View, and Palo Alto. Alameda County includes the Bay Area cities and towns across the bay from San Francisco: Berkeley, Oakland, Hayward, Fremont, and Pleasanton.

Middlesex County in New Jersey includes the cities and towns of Edison, Woodbridge Township, New Brunswick, Sayreville, and South Amboy. This county is known for its long history of innovation.

Cook County in Illinois includes the cities and towns of Chicago (a high-tech hub), Evanston, Schaumburg, Des Plaines, Oak Lawn, Orland Park, and Elk Grove Village. Chicago is the third largest city in the nation.

According to MPI, immigrants from India have a much higher educational attainment compared to other immigrants and the U.S. population as a whole. This is due to how they enter the U.S.: either as international students, or as H-1B visa workers at jobs requiring a university degree. For FY 2016, immigrants from India accounted for 74% of the H-1B visa petitions (both initial and continuing employment) approved by the U.S. Citizens and Immigration Services (USCIS).

New National Education Policy in India Focuses on Technology

India’s Union cabinet has proposed significant changes to the country’s national education policy. The goal is to align education to the requirements of today’s workforce and employer needs. The policy recommends that education include teaching coding in school from the sixth standard onward. Ultimately, the policy aims to impart mathematical thinking and an interest in scientific topics in students. This trend has impacted 2020 inbound immigration from India.

The national education policy is being revamped to further align with India’s Sustainable Development Goals (SDGs). The SDGs were adopted by United Nations member countries in 2015 to serve as a call to action to eliminate poverty, protect natural resources, and bring prosperity and peace to all by the year 2030. SDGs aim to transform the world and strengthen universal peace.

What Does 2020 Inbound Immigration Mean for Employers?

Employers should learn about the current immigration trends and how they might impact their future ability to hire foreign nationals. While India has seen much success as the nation works to reach their SDGs, many other nations are also investing in education.

Also, several nations are pursuing significant educational reforms, including:

  • Mexico
  • Pakistan
  • Papua New Guinea
  • Poland
  • Vietnam

This may lead to greater competition from foreign nationals of these nations for immigration to the U.S. and the many opportunities this presents to them and their family members.

Where Can Your Company Get Help to Leverage 2020 Inbound Immigration?

Global Mobility Solutions has a team of global relocation experts who can help your company understand how to leverage immigration trends to benefit your talent acquisition and relocation programs. Our team’s knowledge and access to visa and immigration resources is unparalleled in the industry. We have helped thousands of companies navigate the U.S. visa program and H-1B visa lottery process reach successful results.

Conclusion

Global Mobility Solutions’ team of global relocation experts has helped thousands of our clients understand how to attract and hire the best candidates for job openings. Our team can help your company learn how to leverage visa programs and other creative solutions to hire foreign nationals. As a result, your company will have greater success with corporate objectives and be able to benefit from 2020 inbound immigration.

GMS was the first relocation company to register as a “.com.” The company also created the first online interactive tools and calculators, and revolutionized the entire relocation industry. GMS continues to set the industry pace as the pioneer in innovation and technology solutions with its proprietary MyRelocation® technology platform.

New SafeRelo™ COVID-19 Knowledge Portal

GMS recently launched its new SafeRelo™ COVID-19 Knowledge Portal featuring a number of helpful resources including:

  • Curated selection of news and articles specific to managing relocation programs and issues relating to COVID-19
  • Comprehensive guide to national, international, and local online sources for current data
  • Program/Policy Evaluation (PPE) Tool for instant relocation policy reviews

Contact our experts online to learn more about how your company can benefit from the 2020 inbound immigration to the U.S., or give us a call at 800.617.1904 or 480.922.0700 today.

Request your complimentary Visa Program Assessment

Categories
Corporate Relocation

Pre-Decision Tax Planning: 5 Steps You Should Take Now

Business People Having a Meeting

Global Mobility Solutions knows the importance of pre-decision tax planning. As the pioneer of the benefits of pre-decision services, GMS understands how to identify the markers of success in relocations. Clients know that partnering with us early in the process helps increase relocation success. It also helps increase their transferee’s productivity on their new job. Our wide range of services help clients identify those employees who are the best fit and best suited for the assignment.

GMS spoke with Erika Beddow, Business Development Manager at Global Mobility Tax, LLP.  Erika has over 20 years’ experience in public accounting with the last 12 years specializing in the Global Mobility industry. Erika agreed to share her expert guidance on the issue of pre-decision tax planning.

What is Pre-Decision Tax Planning?

Whenever she is asked this question, Erika states that pre-decision tax planning is an extremely important consideration for relocation programs. Employers should be well-prepared for a successful global relocation. Relocating an employee globally can be beneficial to both the employer and employee. However, global relation can cause many issues if tax planning is insufficient.

Before sending an employee on a global assignment, employers should know the basics. This includes knowing how the host location will tax employees. It also includes understanding the taxes the company will need to pay. Whether the relocation is permanent or short-term, employers should understand the tax costs upfront. This will help them prepare accurate global relocation budgets. It will also help them avoid any possible tax compliance penalties.

COVID-19 Pandemic Puts the Brakes on Global Relocation

Many employers have found global relocations interrupted or halted during the COVID-19 pandemic. Erika believes that as countries start to recover and lift visa restrictions, employers will start considering international moves for employees. As companies look beyond the COVID-19 pandemic, pre-decision tax planning will be an essential part of relocating their employees.

Tax regulations are increasingly complicated and can increase the tax burden for both the company and employee. Pre-decision tax planning should be reviewed by assignment type to understand what the tax implications are in each location. This could vary depending on location, assignment type, and allowances paid. Some of the more common allowances offered may generate tax obligations.

Common Allowances for Global Assignments

  • Moving allowance for both the employee and family (includes airfare and shipping)
  • Housing allowances (either temporary or for the duration of the assignment)
  • Cost of Living Adjustment (COLA)
  • Home finding assistance
  • Home sale / lease break costs
  • Spousal support
  • Child tuition in the host location
  • Tax gross ups – increased tax costs typically know, as “tax on tax.” These are calculated to ensure the employee is not out of pocket for taxes on assignment-related expenses.

5 Steps to Take for Pre-Decision Tax Planning

Erika notes that employers should always be looking to reduce the tax impact that employee global assignments have on their company. Below are 5 steps employers should take now to ensure a simple, smooth, and successful global relocation.

1: Start global tax planning prior to the assignment—“pre-decision tax planning.” This will ensure you have the best type of assignment policy in place for this relocation for both the company and employee, while also minimizing global tax costs.

2: Review the global income and social tax treaties to minimize excess tax costs associated with each assignment.

3: Contact payroll to ensure set up and reporting is complete in both locations.

4: Educate employees on taxes in both locations to ensure the employee understands the implications in both countries via home and host tax consultations.

5: Provide tax assistance in both home and host locations for your employees. This will ensure proper compliance in both jurisdictions.

Proper Planning Saves Time, Money, and Provides Peace of Mind

Planning properly can save your company time and money. As a result, you can have peace of mind that tax issues will not arise from a global relocation. However, improper planning could cause damage to your company’s reputation, in addition to tax costs and compliance penalties.

Experts at Global Mobility Tax, LLP Understand the Importance of Pre-Decision Tax Planning

Global Mobility Tax, LLP has helped companies understand the overall cost of an assignment and its tax implications. We can help your company plan the assignment structure to have the best outcome for both the company and employee. Global Mobility Tax, LLP provides expert tax support, education, and awareness to clients and their employees in order to ensure corporate compliance and employee satisfaction.

Erika is always ready to meet to help employers learn more about being compliant and building internal processes to support their mobile workforce.

Conclusion

GMS’ team of global relocation experts has helped thousands of our clients learn the importance of pre-decision tax planning for their global relocations. Our mobility consulting team can help your company understand how to leverage pre-decision tax planning to reduce global tax compliance issues with the assistance of the experts at Global Mobility Tax, LLP.

GMS was the first relocation company to register as a “.com.” The company also created the first online interactive tools and calculators, and revolutionized the entire relocation industry. GMS continues to set the industry pace as the pioneer in innovation and technology solutions with its proprietary MyRelocation® technology platform.

New SafeRelo™ COVID-19 Knowledge Portal

GMS recently launched its new SafeRelo™ COVID-19 Knowledge Portal featuring a number of helpful resources including:

  • Curated selection of news and articles specific to managing relocation programs and issues relating to COVID-19
  • Comprehensive guide to national, international, and local online sources for current data
  • Program/Policy Evaluation (PPE) Tool for instant relocation policy reviews

Learn more about the importance of pre-decision tax planning. Contact our experts online or give us a call at 800.617.1904 or 480.922.0700 today.

We're Here to Help! Request a Courtesy Consultation

Are you ready to talk to a Mobility Pro? Learn how GMS can optimize your mobility program, enhance your policies to meet today’s unique challenges, receive an in-depth industry benchmark, or simply ask us a question. Your Mobility Pro will be in touch within 1 business day for a no-pressure, courtesy consultation.

Categories
Buy a Home Home Purchase

2020 New Home Sales Rising Faster Than Supply

Woman with dark hair and white shirt, man with dark hair and blue shirt, both looking at blueprints, in front of new construction, as they pursue a plan toward 2020 New Home Sales

2020 new home sales are rising faster than home builders can replenish their supply. Sales of new homes rose to its highest level in over 14 years during the month of August. As a result, there is a very low 3.3 months’ worth of inventory. Generally, the new home sales market is considered “balanced” when there is a six month supply of new homes for sale.

Home buyers can expect to see rising home prices. However, the greatest demand is at price points below $300,000 for first-time home buyers. In hot markets such as Orlando, Florida, new residential construction rose by 22% from August 2019 to August 2020. Across the United States, much of the rising cost is attributable to a severe housing shortage. Builders have not kept pace with demand for several reasons. Many still have fears ever since the 2008 market crash. Also, they may have difficulty in building due to zoning issues or neighbor concerns about parking and density.

Home Builders Facing High Lumber Prices, Other Constraints

  1. Lumber futures reached a record high of $1,000 per 1,000 board feet in September. The commodity has been the top-performing major raw material during 2020, due to high demand from home builders and home owners undertaking do-it-yourself (DIY) home remodeling projects.
  2. Buildable lots have been in low supply, hampering 2020 new home sales. As early as January, 40% of single-family builders reported the supply of lots was low, and 18% reported the supply as very low. Because of the low supply, lot prices have been increasing, and lot sizes have been decreasing.
  3. Construction workers continue to be in short supply. The Home Builders Institute recognizes a shortage of workers. This shortage is due to increasing demand for housing and a low supply of existing homes for sale. Skilled workers are retiring from the home building industry. However, not enough new workers coming into the field to replace those who are retiring.

New Construction Loans for 2020 New Home Sales

Transferees looking for a new construction loan should be aware of how it differs from a traditional mortgage loan. Tim Hofmann, Vice President, Construction Lending Administration Manager at TIAA Bank previously shared that a new construction loan has the following features:

  1. Can be thought of as a specific dollar amount “line of credit”
  2. The length of a new construction loan coincides with the time to build the home, usually around 12 months.
  3. Home builders/borrowers obtain funds by submitting requests for draws to the lender.
  4. New construction loans are not sold off to investors; they remain within the lender’s portfolio.
  5. Each draw request is accompanied by an interest payment at that specific time on what is drawn.
  6. Following completion of the home build, the lender grants a mortgage for the new home.
  7. The new mortgage issued by the lender results in paying off the construction loan balance.

What Does This Mean for 2020 New Home Sales?

Transferees seeking a new construction loan to build a home should first review their current financial arrangements with a qualified lender. Depending on their financial circumstances, transferees with mortgages on their current home may still be able to qualify for a new construction loan. Lending requirements will determine if they can qualify for a new construction loan while still holding their current mortgage debt.

What Should Employers do?

Employers that have transferees who are seeking a new construction loan for their relocation should direct them to speak with qualified lenders and financial advisors for guidance on 2020 new home sales. They should also direct them to speak with an experienced and qualified Realtor® who can assist them in determining where they want to live in the new location.

Employers should also review and benchmark their relocation policy with a Relocation Management Company (RMC). RMCs that have knowledge and experience with relocations involving new home sales are ideal sources for policy updates and best practice information. They will also understand the reasons why employers should always encourage transferees to buy instead of rent.

There may be some necessary relocation policy enhancements to allow for exceptions that arise from transferees who want to obtain a new construction loan. The 2020 real estate market balance between supply and demand is not equal. As a result, pricing, availability, and speed of real estate transactions may impact the ability of transferees to obtain financing. These same issues may also hinder transferees’ ability to arrange new home sales in their most preferred locations.

Conclusion

GMS’ team of domestic relocation experts has helped thousands of our clients understand how to provide solutions for transferees looking to purchase a new home. During the challenging 2020 new home sales market, it is important for employers to provide new hires and transferees with guidance and resources. This will help employers ensure a smooth and successful relocation process.

GMS was the first relocation company to register as a “.com.” The company also created the first online interactive tools and calculators, and revolutionized the entire relocation industry. GMS continues to set the industry pace as the pioneer in innovation and technology solutions with its proprietary MyRelocation® technology platform.

New SafeRelo™ COVID-19 Knowledge Portal

GMS recently launched its new SafeRelo™ COVID-19 Knowledge Portal featuring a number of helpful resources including:

  • Curated selection of news and articles specific to managing relocation programs and issues relating to COVID-19
  • Comprehensive guide to national, international, and local online sources for current data
  • Program/Policy Evaluation (PPE) Tool for instant relocation policy reviews

Contact our experts online to learn how to help transferees maneuver through the 2020 new home sales market, or give us a call at 800.617.1904 or 480.922.0700 today.

GMS is sharing public knowledge and can help companies more clearly understand new construction loans for relocations. However, GMS is not a CPA firm or a lender, and is not giving financial advice. Everyone’s financial situation is different; individuals and employers should consult their lenders and financial advisors prior to making any decisions.

We're Here to Help! Request a Courtesy Consultation

Are you ready to talk to a Mobility Pro? Learn how GMS can optimize your mobility program, enhance your policies to meet today’s unique challenges, receive an in-depth industry benchmark, or simply ask us a question. Your Mobility Pro will be in touch within 1 business day for a no-pressure, courtesy consultation.

Categories
Buy a Home Domestic Relocation Domestic Relocation Tips Home Purchase

Relocation Mortgage Application: Top 5 Questions for Transferees

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Many transferees seek to buy a home in their new location, and will need to submit a relocation mortgage application. GMS recommends that companies should encourage transferees to buy a home instead of renting. Transferees who buy a home establish roots in their new community and can settle in more comfortably. Also, if a company offers home purchase benefits, this sends a strong signal of commitment on their part to the transferee.

What is a Relocation Mortgage?

A relocation mortgage is an alternative mortgage product. Transferees may be eligible for benefits that will help them move and purchase a home. In some cases, employers may contribute subsidies to help cover the costs of closing. They may help transferees obtain a lower interest rate on the mortgage by paying an upfront fee, also known as paying for points.

GMS spoke with Anthony Hughes, Relocation Account Manager at Quicken Loans. Anthony agreed to share his advice and guidance for transferees who need to submit a relocation mortgage application.

Top 5 Questions for Transferees Who Plan to Submit a Relocation Mortgage Application

Anthony highlights 5 major questions that transferees must address when they are working with the dedicated team of VIP relocation mortgage bankers at Quicken Loans. Answers to these questions will provide information that is helpful for the mortgage process.

By knowing the transferee’s answers to these questions, it will help ensure the team at Quicken Loans is setting proper expectations for them from the first call through closing. Anthony states that Quicken Loans’ goal is for each transferee’s mortgage experience to be as seamless and stress free as possible during their relocation.

Relocation Mortgage Application Top 5 Questions

Question #1: Employment

  • Are you a new hire? Transferring internally?  Did you get a promotion?
  • What is your start date for your new role, what is your new role, and how much will your new income be?
  • Do you have an offer letter available to provide us?

Question #2: Timeline/Goals/Awareness

  • Have you relocated before?
  • When are you looking to have everything finalized?
  • Do you have a timeline in place?

Question #3: Departure Home versus Destination Home

  • What are your plans with your current home?
  • Do you need to sell your current home to have the funds to qualify for your new mortgage?
  • Do your benefits include a Guaranteed Buyout Option (GBO) or Buyer Value Option (BVO) that will impact your relocation mortgage application?
  • How much are you looking to spend on your new home?
  • Are you familiar with the real estate market in the new area?

Question #4: Assets

  • What assets do you have on hand?
  • What are your account balances?
  • Where are the funds coming from for your new home purchase? Proceeds? Equity advance? Cash on hand? Gift?

Question #5: Credit Report

  • What is included in the credit report?
  • What is your score?
  • Could we utilize dedicated down payment funds in a better way?

Reviewing the Answers on the Relocation Mortgage Application

Anthony shares that once Quicken Loans has reviewed these top 5 questions with a transferee, the team will provide them with details around the Quicken Loans Mortgage First program. This program enables Quicken Loans to fully underwrite the transferee’s loan prior to their first house hunting trip. Quicken Loans’ Mortgage First approval is stronger than just a traditional pre-qualification. As a result, this approval can give transferees the upper hand when making an offer on a new home.

What Does This Mean?

Transferees who want to submit a relocation mortgage application to buy a new home should review their current financial arrangements with a qualified lender. Anthony states that Quicken Loans has several informative guides to help transferees understand the relocation mortgage application process, including a “Do’s and Don’ts of Relocating to a New Home” flyer. Transferees who have a mortgage on their current home may be able to obtain another mortgage for a new home. However, this depends on their specific financial circumstances. Transferees should understand that they must be approved for the total amount of current mortgage debt and their new mortgage loan.

What Should Employers do for Transferees Who Want to Submit a Relocation Mortgage Application?

Employers with transferees looking to buy a new home should direct them to speak with qualified lenders and financial advisors for guidance. They should review their relocation policy to ensure their policy represents industry best practices and provides strong support for their talent acquisition program.

Employers should also work with an experienced and knowledgeable Relocation Management Company (RMC). By engaging the RMC early in the process, employers will be assured of all the important points that relate to the transferee’s ability to buy a new home and arrive to their new location on schedule.

Conclusion

Global Mobility Solutions’ team of domestic relocation experts has helped thousands of our clients understand how to communicate important points relating to how transferees should submit their relocation mortgage application. Our team can help your company understand how to proceed by providing guidance to transferees on obtaining important and timely information from qualified lenders and financial advisors.

GMS was the first relocation company to register as a “.com.” The company also created the first online interactive tools and calculators, and revolutionized the entire relocation industry. GMS continues to set the industry pace as the pioneer in innovation and technology solutions with its proprietary MyRelocation® technology platform.

New SafeRelo™ COVID-19 Knowledge Portal

GMS recently launched its new SafeRelo™ COVID-19 Knowledge Portal featuring a number of helpful resources including:

  • Curated selection of news and articles specific to managing relocation programs and issues relating to COVID-19
  • Comprehensive guide to national, international, and local online sources for current data
  • Program/Policy Evaluation (PPE) Tool for instant relocation policy reviews

Contact our experts online to discuss how to provide guidance for a transferee in submitting their relocation mortgage application, or give us a call at 800.617.1904 or 480.922.0700 today.

GMS is sharing public knowledge and can help companies more clearly understand mortgage loans for transferees. However, GMS is not a CPA firm or a lender, and is not giving financial advice. Everyone’s financial situation is different; individuals and employers should consult their lenders and financial advisors prior to making any decisions.

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About

Contact Us

About Us

GMS Client Login

Privacy Policy

Other Services

Our Technology

Global Relocation

Group Moves

U.S. & Canadian Relocation

Address

Global Mobility Solutions
15333 N. Pima Road
Scottsdale AZ, 85260

1.800.617.1904
Available 24/7/365

About

Contact Us

About Us

GMS Client Login

Privacy Policy

Address

Global Mobility Solutions
15333 N. Pima Road
Scottsdale AZ, 85260

1.800.617.1904
Available 24/7/365

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