January 09, 2007

On Assignment

Everything is approved and now there's the paperwork to finish. It turns out that I'm not "relocating" to India, it's an "international secondment assignment." The short explanation is that I will be treated like a US Google employee while I'm there, and Google will "equalize" things so that I neither suffer nor gain financially from the assignment. At least that's the theory.

What this means in practice is that I will be paid in US dollars at my US rate, I will get credited for US holidays (though I will take local holidays), Google will provide a tax adviser and will be tax equalized. My medical coverage will be handled under a special expat plan. I get a $5ooo relocation allowance (taxable) to cover incidental expenses - appliances, decorating, seasonal clothing, tips for the movers, and things like that. I get a one way flight for me and my partner there, and another one when we return, plus one round trip per year (after we've been there a year.)

One novel part of the agreement is that Google will provide me with a company car. I've never had a company car before, so this should be interesting. I was wondering if it made sense to lease a car when we were there and to hire a driver, well that question seems to have been answered. We will have a car, and if we have a car I'm pretty certain we'll want (need!) a driver.

Google will ship up to 500lbs of stuff by air, and a 20' shipping container for surface stuff. That's a lot of stuff! I doubt we'll come close. They'll also pay for corporate housing for 30 days while we find a place to live. Speaking of places to live, Google has a very generous housing plan that we will be completely ignoring. Basically we could continue to pay our existing US housing expenses, and Google would provide for housing in Bangalore. In other words we could keep our house here, pay our regular US housing expenses, and Google would pay for us to live in Bangalore. Instead we are going to sell our house here, and take care of our own living arrangements in Bangalore. Many of our friends, and the relocation specialist at Google
look at us like we've lost our minds when I tell them this. Especially when I explain that housing costs in Bangalore are only slightly lower than here. On the other hand, a number of our financially savvy friends who understand US real estate think about it for a bit and agree that this is actually not totally insane. Especially after I argue with them for a bit and explain my reasoning.

There are three basic reasons for this. First - I think US real estate in general, and SF real estate in particular will be flat at best for the next two years. I have argued that we should sell and rent even if we plan to stay here - investing the proceeds in something other than real estate for a few years. Second - this place is really bigger than two of us need. Yes we love having guests, but this is ridiculous. The second floor is basically uninhabited most of the time. We should downsize. Third and finally - I want to step up our basis. US tax law says that you can shelter up to $250,000 in capital gains of your residence if you have lived there for at least two of the last five years. We are bumping up against that limit, so it would be good to take that gain now. The downside risks are twofold. First that I might be wrong about real estate prices. This would be bad not just for forgoing potential gain, but it would make it harder to get back into the market. I'm not so worried about this. Second that we may not be able to find a place we love as much in an area we love as much. I'm confident that if we're patient we can find a place in this area that we would love. It might take a year or two but it will happen.

Last night we talked to a real estate agent. We hired a fee-for-service agent this time, as we have interest from friends and neighbors and it may be that we can get a reasonable price at a minimal cost. Besides I hate the way real estate is sold in the US, so if we give up a little equity in order to support a better model of real estate sales, I'm all for it. Now that we've gone and done that the first thing we decided was that we wanted to wait for the results of this year's condo lottery before deciding anything else. Hurry up and wait!

Tonight we met with Kevin from the estate sale company. We walked through the house and talked details for a bit. Both Debbie and I were astonished to discover that not only did we not need to be at the sale, he practically forbade it! How are we supposed to have any idea if they are actually selling stuff? How do we know if the money they collect bears any relation to the money they eventually give us? "Either you trust me or you don't." WTF? In the end we decide that this is stuff we're leaving behind anyway, and we'd end up just giving it away if we did it ourselves, but still it feels quite odd. He also suggests the sale will go better if it's after we're out of the house, so we reschedule for February 9-10-11. Debbie and I will probably go visit some of their other sales to check on things, and will probably ask friends to come check out the sale to see, but it still seems odd.

Now it's time to scan and shred all the documents we don't want to schlep, figure out what we want to ship, and what we want to store. So much to do, so daunting.
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