debs39

Hi

Can anyone help on the cost of relocating to the USA, as my husbands company want us to come up with a figure and we can negotiate, they have made us an original offer but we cannot say if it will be enough ( they will be paying all legal costs involved in obtaining a visa and green card)

any help or web sites would be appreciated.

We will be selling our property in UK and buying one in Illinois, also they will pay for replacement electrical items etc

Thanks

Debs

Pulaski

How big is your house? How much furniture do you have? Do you get to chose the shipper?

Do you have children? ...... Pets?

How much electrical equipment do you have? .... and is it Amstrad quality or Bang & Olufsen?

How long is a piece of string?

Having said that, including electrical equipment, and shipping , say, the contents of a three bed house, I would say that £10,000 would be the barest minimum that you'd need.

Surely it would be better to negotiate a deal on the basis of reimbursement of what you actually money spend, rather than trying to estimate a figure in advance?

debs39

Oh dont be like that lol ,

We live in a 3 bed semi, looking to move into property value $400,000, have 3 young children, 1 dog, replacement electrical goods an average price, but all this aside the main points im looking for are the closing costs of buying a property in illinois and the shipping costs.

Thanks

dunroving

Make sure you include the realtor's commission as costs of house purchase (these are not usually classified as closing costs). Here (NC), for example, they take 6% of the purchase price - $24,000 in your case.... and don't let anyone tell you "the seller pays that", or "the seller pays 3%" - bottom line is that it is lncluded in the purchase price (i.e., it comes out of the proceeds of the sale) - and who pays that?

ladyofthelake

As far as I am aware, house prices are determined by comparable sales which have closed in the area. Sellers cannot ask for more in order to cover the Realtors commission, as when the property is appraised it will be over priced. Also, in the closing statement, when you have bought your new home there will be no Realtor commission, so how could you justify it?
Presumably they will want to see the proof of all your expenses.
You can expect to claim a large part of the closing cost, but there are things like House Insurance and Property Taxes included in this, and I suspect you wouldn't be able to get that back. I would have thought the best thing to do is find a Realtor who works in the area you will be looking at, contact them, explain the situation, and ask for a break down of the costs.I'm sure they would be more than happy to do it if it got them the job as your agent.
Have you found out the cost of selling your present home? That can be taken into account as well.

dunroving

The original post asked for advice on how much it costs to relocate. Yes, you are correct, if a house is "worth" 400k, a seller can't ask 424k, to cover realtor's fees - you wouldn't sell it if it's priced above fair market value. But if the original poster is looking to cover the cost of their relocation, it's fair to suggest they consider realtor's fees. For example, if they are on a 3-year contract and will go back, how much will they sell their house for? (Here in Greenville, not much more than 400k - property appreciation is 1-2% per year). How much will they have to pay the realtor? Eventually, they will have to pay these costs. Now whether they can make a case for this to their employer is another question, but some employers may be reasonable enough to consider this.

You could get wrapped up in estimating all kinds of "hidden" costs of relocation (e.g., selling a car and buying a new car costs more money than not selling your car in the first place.) So, the answer to the original question depends on whether they want to know the bottom line costs of relocating, so they can negotiate, or they want to know what costs their employer is likely to pay - my answer is a fair and accurate answer to the first question - and none of us has the answer to the second one.

debs39

the reality is we have been made an offer and need to know if we can emigrate to the USA ( the figure being around $45,000)
do you think this is a resonable/good amount that we can move with 3 children without it costing us to much, being ignorant we haven't got a clue of hidden costs. We will have the deposit of about $100,000 for our property.

Thanks

Debs

Pulaski

No, the bottom line is that although, yes, the buyer does pay it, it comes out of the "down-payment + mortgage amount", it is not something that you have to pay on top of the purchase price.

dunroving

Sorry to be inistent, but yes, it IS included in the purchase price - maybe not explicitly, but implicitly. I don't think anyone posted anything to the effect that it is ADDED to the purchase price (I didn't - check again). That's why FSBO's *can* (not saying they always DO) sell their house for less than typical asking price - they don't have to pay realtor's commission [I sold FSBO once, and "split the difference" with the buyer]. Believe me, I've been through the selling and buying process several times, and have read enough, to understand the situation. And what else is the purchase price if it's not down payment plus mortgage? Seems like simple maths to me.

Take my current house. Previous owners bought it for 93K, and almost immediately realized it was in the wrong school zone (I know....), so put it straight back on the market for 99K (to try to recoup their costs, by having 93K left over after the realtors took their share). Of course, it sat on the market 6 months, over-priced, and I ended up buying it for - guess how much? - 93K. The sellers obviously "lost" about 6K (not even considering closing costs). This is the best illustration I can give for the fact that the realtor's fees ARE a cost you should consider, especially if your relocation is short-term. We can argue all day about "where" it comes from (buyer/seller, sale price/down payment + mortgage amount), and "when" it comes (when you buy/when you sell) but Debs, believe me that I'm trying to help you get a realistic idea of how much this will cost you, when the dust settles. So, if the realtor's commission is 6%, you should factor in the 24K commission on your 400K house as a hidden cost that you'll end up paying sooner or later, one way or the other.

dunroving

I'd say $45k is extremely generous. I did 2 Transatlantic moves: US to UK, I got $4.5K; UK to US, I got $4k towards moving expenses. The two moves cost me personally in the region of $30k beyond this.

My only reservation is the realtor's commission thing. Because you are buying an expensive house, the commission is 24K - which means all other expenses would need to be below 20K to break even. From my experiences, major costs were in the following categories:

Shipping belongings (both ways)
Travel (factor in your return tickets at end of contract too).
Selling and buying - house, cars, electronics, furniture (twice - when you return home too)
Cost of education (if you will need to pay for school in US, to match quality of education you got for free in UK)

And before anyone jumps all over me, I'm not suggesting an employer will consider the "return" expenses, but if you read Debs' postings, I think she is looking for a picture of what it will cost for her US "adventure". If she will (or may) head back to the UK, costs of coming back should be considered too (and don't even get me started on the cost of getting back into the overpriced UK housing market when she returns).

Pulaski

The original post concerned extra cash required to relocate, not the purchase price of the house, and as the realtors' commissions come out of the purchase price, then it is not additional cash, is it? .... As you hinted yourself, it is a reduction in the proceeds at the time of resale rather than a cost at the time of purchase.

And please don't patronize me with the "I've been through it", so have I, and know probably more about the process than you!

dunroving

Patronize? That wasn't my intention. You questioned the information I was trying to provide; I was trying to clarify that I was not talking out of my hat. One thing I've learned from these boards is that sometimes, when a person is looking for good information, they get authoritative replies from people with no experience or knowledge. And I never presume I know more than another person, especially when I've no reason to.

I'm just trying to help Debs get a picture of how much she's going to be out of pocket, eventually. I don't see the point in getting too involved in discussions of semantics, as I hope my last posts showed.

Emm

We have recently done this and our way around it was to have it written into my husbands new contract that the company will pay for all rellocation cost imbursed both forseen and unforseen. That meant that they picked up the tab for the removals from Sweden to the US including any extra cost incurred at customs (if they open your container they charge you the cost of searching it, which can run into thousands of $ and they are opening more containers since Sept. 11th); hire cars until we can get new a new car here; hotels until our furniture arrived (we were in hotels for about a month); the cost of a lawyer to get the visa's sorted out and the cost of the visas themselves (for the whole family); deposits for utilities (a lot of the utility companies require deposits since you have no credit record in the company) and the cost of a 'relocator' to help us with the actual relocation (she is a complete bonus and has helped us with everything from booking hotels to getting the kids enrolled in school).

The best thing is that the bills go directly to the company and other expenses are reclaimable. That way you know you are covered.

If I can be of any help send me an email and I can give you more details.

Emm.

Pulaski

One thing to look out for though, you will almost certainly find that the federal government has claimed it's slice of the $45,000 and that you'll only see the net of tax amount - about 2/3rds of the gross figure if you're lucky!

You may want to get some tax advice on this, but I think that if you trry to get relocated very shortly before the year end then only a small part of your relocation will get taxed at the higher rates, whereas if you arrive in January the relocation amount will be taxed in the following year as the top slice on top of a year's salary.

On the flip side, the US is quite generous in terms of allowing you to tax tax deductions for moving expenses. This really is an area where you'll need professional advice, but, having said that, I am sure that you'll only get the tax break for true expenses of moving (packing shipping, insurance, travel, etc. but not the reimbursement for new appliances, so watch out!

dunroving

Good point. You may be able to offset this, by including your relocation expenses when you complete your tax return. If the two amounts (relocation expenses and relocation reimbursement) are similar, hopefully you shouldn't be stung by taxes. Maybe you should talk with your employer's payroll office to find out how they will pay. If they will pay all bills (i.e., you have bills sent to them, they pay the bills), no problem. If they will pay you in reimbursement, see if they'll cut you a separate check (i.e., not pay you as if it were salary). That's how my employer reimburses me for some professional expenses (travel to conferences, etc.), and I sort it out with the tax folks at tax return time.