The numbers speak for themselves. In most states, the housing market has reached levels of competition that are considered intense by most in the industry. Even those trying to move locally need help finding a home for a price they can afford. But what about those who are moving for a new job? This tight housing market plays a significant role in relocating employees.
Looking at the big picture, moving to another state for a job is stressful enough, but what should companies and employees do if the relocating employee cannot find suitable housing for their family? Are employees declining jobs because of this? Many employees are asking their companies for extensions in their relocation journey. Companies then turn to relocation experts and coaches to review options for extending those policies.
The competitiveness of real estate markets across the country can complicate your moving plans, but there are ways to overcome them.
Tips for Relocating Home Buyers
With the current market’s meager inventory, buyer’s agents must get creative when submitting offers for their buyers in this seller’s market. Seller’s markets exist when there are a large number of buyers competing for a lower inventory of active listings. So here are some workarounds to boost the chances of closing the deal on the home your relocating employee and their family needs:
- Cash offers are usually given the highest consideration, followed by Conventional financing, FHA, and VA. Cash is king in so many industries, and the real estate market is no different.
- Buyers can buy their title insurance policy. This helps cut down costs for the sellers and can make an offer stand out in the field.
- Creative offers that will allow sellers to stay in the home a few days after closing. Sellers will appreciate a few extra days before having to move on, which could make the offer more appealing. After all, the seller is likely in a similar situation related to the competition on properties they may be looking at themselves. There are ways for the seller to stay in the home for up to 30 days at no fee, which is another monetary value the buyer can add to their contract. This is a month of no mortgage for the seller, allowing the seller time to close on another home.
- Providing healthy earnest deposits demonstrates a high desire to commit to the purchase. However, this poses a risk to the buyer, as they may lose their earnest money if they breach the contract to purchase.
- Waiving contingencies and reducing home inspection timelines can make an offer more appealing.
- In some cases, buyers write a heartfelt letter to the seller explaining their situation and why they want to purchase their home. This may set some buyers above the competition.
Be Pre-Approved in Advance
Homebuyers should work with a lender right off the bat so that they’re ready to roll once they view a home that they want to put an offer on. It is highly recommended that they have an actual loan approval that has gone through underwriting for at least the offer amount. Time is of the essence in the current housing market. If a buyer shows up to a preferred home and is not ready to back an offer, it will be unlikely that the sellers will choose their bid.
What Can Employers Do to Help?
It’s safe to say that the current hot housing market is impacting companies hiring or relocating employees. Many companies have noted an uptick in declined or failed relocations due to some employees’ inability to find suitable housing in today’s highly competitive real estate environment. But what can companies do to help mitigate these issues?
Provide or Extend Corporate Housing Benefits
One way companies can assist their relocating employees is through the extension of corporate housing support. Corporate housing offers transferees short-term stays in fully furnished houses, condos, or apartments. However, this solution may come at an added cost, the pricing for such accommodations is also on the rise. Typically companies can offer three or six-month stays in corporate housing. But because relocating employees are having such a hard time finding homes, they are asking for extensions.
Consider Relocation Timeline Extensions
In many corporate relocation policies, employees are typically given one year to utilize their policy benefits. But because of the intense housing market – not to mention delays, closures, and travel bans due to the ongoing global pandemic – many relocating employees are having a tough time completing their relocation within a year. Companies should work with their relocation management company to evaluate their policies and identify areas where benefits or timelines can be extended.
While extending the timeline for your out-of-state transferee’s relocation benefits sounds like a simple fix, it’s worth keeping an eye on the tax implications that are becoming more evident as cash-strapped states challenge each other over where work is being performed. The concept of an employee’s “tax home” is currently under scrutiny as work from home policies became mainstream in 2020.
Lastly, the extension of benefits can lead to a rise in costs for companies with moving employees. A key area to watch is the costs associated with the temporary storage of household goods. As an employee deals with an increasingly longer home finding period (due to the competitive market), that employee’s goods will be sitting in storage, waiting for the day when final delivery can be made to their new home.
GMS is Here to Help
One of the best ways to work around the challenges of a seller’s market is to work with a qualified and certified relocation services company. Here at Global Mobility Solutions, we can help your relocating employees with their move and help them find the right home for them. Our services also include corporate housing options, which we can work with employees to extend stays when necessary.
We can also help companies construct policies that allow the benefit timeframe for employees to be flexible. In a time when moving is complex and uncertain, do not leave it to chance to stress your employees. GMS is here to ensure you’re allowing the proper timeframe for your employees to adjust to their new setting, making them more productive for your company.
Our real estate team and relocation coaches can help guide transferees through the process while giving them peace of mind, knowing that relocation professionals are helping them. Contact us today to discuss your corporate relocation needs.
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.
