Classic domestic relocation policies clearly distinguish between renters and homeowners. Renters are assumed to be younger, more junior employees, often single or married without children. Since the classic renter has no home to sell at the departure location, no home to purchase at the destination and significantly less in the way of household goods and other encumbrances, he or she typically received a modest package of benefits relative to homeowner transferees.
In part one of this series we discussed a new type of employee relocation situation: homeowners who are able to sell their home but cannot afford to buy another one. Unless it is a conscious lifestyle choice, transitioning from homeowner to renter can present a significant psychological blow. This is on top of the relocation process itself, which psychologists label as one of life’s most stressful experiences. Throughout the domestic relocation process, these transferees should be seen as individuals who require specialized assistance to relocate.
Using Real Estate Partners
Real estate partners play a critical role in the domestic relocation process in that they can help facilitate a “soft landing” into an appropriate rental property. They should possess deep knowledge of local rental options, and be thoroughly briefed on the family’s needs, whether a modest apartment or a larger-to-luxury home in a prestigious neighborhood. Fortunately the variety and quality of rental stock is often better than it once was, given the many unsold homes in new developments and condo complexes and increased builder activity in this space before the economic downturn.
Domestic relocation management staff who work with “reluctant renter” transferees should be aware not only of applicable policies but also of underlying issues and appropriate responses. From a home equity perspective, some transferees might be walking away with nothing; many will have a sense of going backwards and of starting over again. It is important that these transferees are treated with tact and diplomacy — especially those who have received homeowner benefits from their employer in the past and are accustomed to that status.
The first step in the process may be to explore both purchase and rental options with the transferee, rather than assuming that the transferee will continue with their current housing option. The transferee might find that continued homeownership is attainable after all, depending on the programs available, the cost of living at the destination and other factors. Alternatively, a transferee who initially associates the “renter” label with his college apartment may, upon closer examination, be pleasantly surprised at rental housing stock and value.
In part three of this series, we’ll go over several options for domestic relocation benefits that address this employee relocation situation.