Am I Crazy to Consider Relocating 5 Months after Buying a House?

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mnsportsgeek
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Am I Crazy to Consider Relocating 5 Months after Buying a House?

Post by mnsportsgeek » Tue Apr 03, 2018 6:47 pm

Hi Everyone,

I need your help to either confirm that I am in fact crazy or completely rational.

My wife and I bought our first home in a nice suburb in the Twin Cities at the end of November 2017. We made this purchase with the full intention of being here a long time and making the home ours. We got the home for 300k (30 yr 4.125% mortgage) with 20% down and we paid all of our own closing costs (about ~9k). We've also put about ~5k into the house in maintenance/improvements.

Fast forward to this week and I was just approached about a relocation opportunity within my company. As far the career move, this would be great for my career. I'd be moving industries within a large company, but this part of the business is much larger, faster paced, and frankly more interesting to me. The opportunity for further growth at this location would be great. I had always had a move like this in the back of my head since I started at this company. I just never figured that the opportunity would come up 5 months after I bought a house.

As far as the relocation package, it would cost me essentially nothing to move. They'd pay for all the fees to sell my house, closing costs to buy a new house, and reimburse any losses on the sale. So ultimately, worst case scenario is I'm out the ~10k in closing costs and ~5k in maintenance/improvements on the house if I can only sell for 300k or less. Best case scenario, I sell the house for 315k and it's a wash. The market this spring is expected to be great for sellers in this area. Supply is extremely low right now and everyone is looking to buy, so that has me optimistic that a 315k selling price is not a pipe dream. I believe capital gains are not an issue since I would qualify for the partial exclusion because of the job change which would be up to $80,000 in gains which I won't hit.

So ultimately, am I totally crazy for considering this move after 5 months of home ownership? Obviously, if this comes to fruition I'd be kicking myself for not just renewing my lease and not having to deal with a $15,000 risk, but on the other hand the move would cost me essentially nothing and would be good for my career. Is there anything else I should be considering here?
Last edited by mnsportsgeek on Tue Apr 03, 2018 6:49 pm, edited 1 time in total.

PFInterest
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Re: Am I Crazy to Consider Relocating 5 Months after Buying a House?

Post by PFInterest » Tue Apr 03, 2018 6:49 pm

Rent when you move to your new city.

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tainted-meat
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Re: Am I Crazy to Consider Relocating 5 Months after Buying a House?

Post by tainted-meat » Tue Apr 03, 2018 6:51 pm

You didn’t mention the extent of your personal ties (family, friends, etc).

Based on the information provided I would go for it and not look back.

Good luck!

ThreeBears
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Re: Am I Crazy to Consider Relocating 5 Months after Buying a House?

Post by ThreeBears » Tue Apr 03, 2018 7:03 pm

Haha. I bet today's snow really has you wanting to leave!

sport
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Re: Am I Crazy to Consider Relocating 5 Months after Buying a House?

Post by sport » Tue Apr 03, 2018 7:07 pm

Is there any chance the new job assignment will not work out and you will want to return to the old one? Perhaps you should plan for this contingency.

bloom2708
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Re: Am I Crazy to Consider Relocating 5 Months after Buying a House?

Post by bloom2708 » Tue Apr 03, 2018 7:07 pm

PFInterest wrote:
Tue Apr 03, 2018 6:49 pm
Rent when you move to your new city.
+1
"We are not here to please, but to provoke thoughtfulness." --Unknown Boglehead

Katietsu
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Re: Am I Crazy to Consider Relocating 5 Months after Buying a House?

Post by Katietsu » Tue Apr 03, 2018 7:07 pm

I would make the decision without consideration to the house purchase. The home purchase/sale factor is small in comparison to the other aspects of the move.

edge
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Re: Am I Crazy to Consider Relocating 5 Months after Buying a House?

Post by edge » Tue Apr 03, 2018 7:08 pm

No you aren’t crazy. Make sure your firm is making this worth your while.

Compound
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Re: Am I Crazy to Consider Relocating 5 Months after Buying a House?

Post by Compound » Tue Apr 03, 2018 7:16 pm

From a financial perspective, when you bought the house has no bearing on your newly found job opportunity. The housing expenses are now sunk costs. Sure, you may have felt less settled had this opportunity come along 6 months ago, but it simply wasn’t an option then. Now that it is an option, carefully weigh whether you want the job enough to pull up anchor and move. From the tenor of your post, it sure sounds like moving time.

Good luck!

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Cycle
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Re: Am I Crazy to Consider Relocating 5 Months after Buying a House?

Post by Cycle » Tue Apr 03, 2018 7:24 pm

No, makes sense, people do it all the time at my wifes work, sometimes they'll be at a plant for 6 months, sometimes a few years. More often than not they buy because the relocation package is so good.

quantAndHold
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Re: Am I Crazy to Consider Relocating 5 Months after Buying a House?

Post by quantAndHold » Tue Apr 03, 2018 7:31 pm

Is this a place you, and (especially) your wife want to live? Are you moving away from friends and family? How does your wife feel about that?

As far as just the job and the house, go for it. But make sure this is good for your whole family.

Helo80
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Re: Am I Crazy to Consider Relocating 5 Months after Buying a House?

Post by Helo80 » Tue Apr 03, 2018 7:39 pm

mnsportsgeek wrote:
Tue Apr 03, 2018 6:47 pm

So ultimately, am I totally crazy for considering this move after 5 months of home ownership? Obviously, if this comes to fruition I'd be kicking myself for not just renewing my lease and not having to deal with a $15,000 risk, but on the other hand the move would cost me essentially nothing and would be good for my career. Is there anything else I should be considering here?


No, I do not think you are totally crazy. Based upon everything you have said, I think that it would be a wise move career wise for you.

A) the company is helping you out with the relocation package -- it means they think highly enough of you to do so (or, is this a standard benefit?)
B) You'd be seen as a team player within the company.
C) You've been subconsciously wanting a move like this.
D) You seem to speak highly enough of the employer that you're not upset at all about their offer

Even if you are out $5 or $10 grand, in the long run, if you think that it will help your career growth with this employer or an employer down the road, you should absolutely take it. Sometimes it irks me that BHs view things like this as black and white issues in matters of dollars and cents.

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Watty
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Re: Am I Crazy to Consider Relocating 5 Months after Buying a House?

Post by Watty » Tue Apr 03, 2018 9:35 pm

Having bought the house 5 months ago is little different than if you had bought it five years ago. In some ways it is actually easier since you have not settled into the new neighborhood as much. You probably still even have some boxes you have not unpacked yet. :D

Very often a relocation package will include covering the closing costs for buying a house in the new location, but there may be a time limit on that like 90 days(?) so renting could cause you lose a lot of money.

If you have kids and you rent for a while in the new location before you buy then they could have to change schools a second time which could be hard on them.

Both of these were an issue for me when I did a corporate relocation so renting was not an option. I basically had to fly into a city that I did not know and pick out a house in two company paid house hunting weekends with my wife. Since I had a kid in middle school I basically picked out a couple of good high schools that would be a reasonable commute then picked a house based on the high school.

One thing to be be aware of is that many if not most of the costs that the company pays will be taxable to you so the HR term for what they do is called "Grossing up". For example if you are in the 33% tax bracket and you have a $1,000 expense then they will give you $1,500 so you can pay $500 in taxes and still get the $1,000 you paid after taxes. Be sure to check on this when you are talking about relocation expenses.

There was also a clause where if I voluntarily left that job within year I would need to pay back the relocation costs.

I never saw the total costs but it likely cost the company well over $50K to relocate me so when they spend that sort of money to relocate you that is a pretty good sign that the company considers you to be important to their plans.

One pitfall is that if you turn down the promotion then the company may be slow to offer you another promotion in the future.

All that said don't lose track that is just a job and a big factor is if you will like the new location or not.

mnsportsgeek
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Re: Am I Crazy to Consider Relocating 5 Months after Buying a House?

Post by mnsportsgeek » Tue Apr 03, 2018 9:40 pm

Thanks everyone for all the positive feedback and advice! These are good insights to consider and ask about as I pursue this further. I do feel better knowing that everybody has unanimously deemed me sane :happy

We're young and without kids at the moment, so the choice is all ours to make in that respect. Leaving family and friends will be hard, but we feel like it's something we want to pursue. We've been here our entire lives and while we do like the area, we don't want to live our entire life in one city. Obviously we don't know how well it will work out, but to me this feels like one of those things that I don't want to think about 10 years from now and wonder why I didn't go for it.

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rocket354
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Re: Am I Crazy to Consider Relocating 5 Months after Buying a House?

Post by rocket354 » Tue Apr 03, 2018 9:46 pm

I can just give another vote for items others have already said.

The house is a sunk cost. Make your decision based on your career goals, and in regards to its effect on you, your family, and friends. Don't let the house impact your decision one iota.

(FWIW, I vote: go for it!)

denovo
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Re: Am I Crazy to Consider Relocating 5 Months after Buying a House?

Post by denovo » Tue Apr 03, 2018 11:49 pm

mnsportsgeek wrote:
Tue Apr 03, 2018 9:40 pm
Thanks everyone for all the positive feedback and advice! These are good insights to consider and ask about as I pursue this further. I do feel better knowing that everybody has unanimously deemed me sane :happy

We're young and without kids at the moment, so the choice is all ours to make in that respect. Leaving family and friends will be hard, but we feel like it's something we want to pursue. We've been here our entire lives and while we do like the area, we don't want to live our entire life in one city. Obviously we don't know how well it will work out, but to me this feels like one of those things that I don't want to think about 10 years from now and wonder why I didn't go for it.
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gotester2000
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Re: Am I Crazy to Consider Relocating 5 Months after Buying a House?

Post by gotester2000 » Wed Apr 04, 2018 1:10 am

sport wrote:
Tue Apr 03, 2018 7:07 pm
Is there any chance the new job assignment will not work out and you will want to return to the old one? Perhaps you should plan for this contingency.
+1 - This is a very practical thought.

Is there a hurry to sale your house? You can rent at the new place,wait for a year or so to assess your job situation.

You can sell & buy after that without any confusion - if things work out it will be little price to pay.

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BL
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Re: Am I Crazy to Consider Relocating 5 Months after Buying a House?

Post by BL » Wed Apr 04, 2018 1:21 am

Not only did you get a great offer, but they are subsidizing some/all of the extra costs! Crazy like a fox!

If you really want to go, then go. This a great time with no kids yet to try out other places.

How can you even think to leave this wonderful weather?

Momus
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Re: Am I Crazy to Consider Relocating 5 Months after Buying a House?

Post by Momus » Wed Apr 04, 2018 1:39 am

Rent out your house.
Move out to your new job.
Profit.

Not saying it will keep going up but if the rent more or less cover the mortgage, just rent it out. Anyone who bought in 2009 - mid 2017 already have nice equity increase in their homes/rental.

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Tamarind
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Re: Am I Crazy to Consider Relocating 5 Months after Buying a House?

Post by Tamarind » Wed Apr 04, 2018 5:39 am

bloom2708 wrote:
Tue Apr 03, 2018 7:07 pm
PFInterest wrote:
Tue Apr 03, 2018 6:49 pm
Rent when you move to your new city.
+1
+2. Sounds like a good deal, so take it but avoid this happening in future by being more flexible about housing.

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djpeteski
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Re: Am I Crazy to Consider Relocating 5 Months after Buying a House?

Post by djpeteski » Wed Apr 04, 2018 5:52 am

The career move eclipses any loss you might take in the short term ownership of this house.

I would tend to agree on renting, for at least a time, so you figure out where you want to live and if this city is right for you and your family.

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jfn111
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Re: Am I Crazy to Consider Relocating 5 Months after Buying a House?

Post by jfn111 » Wed Apr 04, 2018 5:56 am

If inventory stays as low as it has, in the Twin Cities, you should be able to recoup your $15,000. :D

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FlyAF
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Re: Am I Crazy to Consider Relocating 5 Months after Buying a House?

Post by FlyAF » Wed Apr 04, 2018 3:26 pm

My wife's mega-corp has relocated us all over the country over the course of her career. Your company is making a huge investment in you by relocating you and it's almost always in your best interest to do it from a career perspective. You're clearly a high potential/contributor to the firm otherwise they wouldn't be willing to do so. The house is pretty much irrelevant IMO. Some of the homes we've bought/sold we've made a little money on and others we lost a little, but every single move was in the best interest of her career and has paid huge dividends way beyond a couple grand lost on the sale of a house. If you can tolerate the new area and the relocation (it's pretty dang stressful), do it and the house will work itself out.

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Re: Am I Crazy to Consider Relocating 5 Months after Buying a House?

Post by soccerrules » Wed Apr 04, 2018 3:57 pm

Seems like a great opportunity, you are not crazy.

I personally would not keep the house and rent it on the off chance that you might move back. I personally would not want to own a house in another state. Plus your company is pretty much going to take it off your hands if it doesn't sell. Agree with renting for a 4-6 months in the new city before starting to look for a house.

You could ask about setting a floor price (if comps validate) for $315K with your company relo team. This will allow you to not have to take the hit on the closing costs. You might have a little leverage since they are coming to you about the move, not the other way around.

You could accept the transfer and then ask to discuss the housing /relo allowances. I would be surprised that $5-10K additional in the package would be a big issue for a mega corp.
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epictetus
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Re: Am I Crazy to Consider Relocating 5 Months after Buying a House?

Post by epictetus » Wed Apr 04, 2018 6:22 pm

15,000 is only 5% of a house valued at 300,000

i would not let that be a factor at all in making the decision.
Focus on what you can control

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Re: Am I Crazy to Consider Relocating 5 Months after Buying a House?

Post by michaeljc70 » Wed Apr 04, 2018 6:40 pm

If the new job doesn't work out, they aren't going to pay for you to relocate back (closing costs, moving costs, etc). That would be my concern. It is really hard to know everything about a new job (whether you will like it, it is challenging, how your co-workers/customer are, etc.) until you actually work it for 6 months. I just started back at a company I've worked at multiple times before and it was still not everything I expected.

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Re: Am I Crazy to Consider Relocating 5 Months after Buying a House?

Post by 3funder » Wed Apr 04, 2018 8:18 pm

Compound wrote:
Tue Apr 03, 2018 7:16 pm
From a financial perspective, when you bought the house has no bearing on your newly found job opportunity. The housing expenses are now sunk costs. Sure, you may have felt less settled had this opportunity come along 6 months ago, but it simply wasn’t an option then. Now that it is an option, carefully weigh whether you want the job enough to pull up anchor and move. From the tenor of your post, it sure sounds like moving time.

Good luck!
+1

Glockenspiel
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Re: Am I Crazy to Consider Relocating 5 Months after Buying a House?

Post by Glockenspiel » Wed Apr 04, 2018 9:54 pm

No, it's not crazy.

Considering you bought in November, I actually would bet your purchase price was quite a bit lower than you will be able to sell it for if you sell it in May-August this year, especially if it's a nice family-sized home in a good school district. I watch the Twin Cities housing market closely and inventory is very tight with many houses going for above asking price. If you do decide to go for it, I'd try to get it on the market within 2 months (by June) to maximize your selling price.

Base your decision on where you want to live and if you and your family will be happy in the new location. If you do move, rent for at least a year before buying.

CULater
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Re: Am I Crazy to Consider Relocating 5 Months after Buying a House?

Post by CULater » Thu Apr 05, 2018 10:17 am

I have a cousin who moved very frequently as he progressed up the ladder in his career. He and his wife always sold and bought a home in the new location. Probably did this at least 8-10 times. It all depends on your disposition - they didn't mind all the work involved. I don't think they ever lost money on a move. Now that he's retired, they still do the same thing with retirement homes. They've moved several times, buying a new home each time. In one instance, they moved cross-country to a new home they bought in Phoenix area and probably lived there less than 6 months before they decided to sell it and buy another home again. They didn't lose money on that one either. I wouldn't do what they do, but it serves as a reminder that buying homes and selling them may not be as big a deal as most of us make out.
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