Selling a House in California and Moving Out of State
Most California home sales run 60 to 90 days from prep through close, and that window doesn’t move to match your moving deadline.
The approach that works depends on how much time is left and what condition the property is in, and most sellers find those two things don’t add up the way they expected when they set the move date.
When the Sale Timeline and the Move Deadline Don’t Match
A traditional listing runs three to four weeks of prep before the property hits the MLS, and that’s before the marketing period starts.
In most Southern California markets, a listing in decent condition takes another 30 to 60 days to get to an accepted offer, then 30 to 45 days in escrow before the money lands.
If your move date is 10 weeks out and the house hasn’t had any prep work done yet, a standard listing won’t close before you leave.
Most sellers who end up in that position locked in the move date before running the listing timeline against it, and by the time the gap shows up, the truck is usually already booked.
Sellers who bought relatively recently and are now facing a move have an additional question to run: how soon you can sell after buying a house affects the capital gains picture, and that math is worth running before the move date gets locked in.
The Pacific Avenue Deal
Pacific Avenue, Riverside
We closed on a property at 4120 Pacific Avenue in Riverside in September 2015 for $115,000.
The seller called on a Tuesday and said he was leaving for Missouri in roughly 10 days, with the truck already half loaded and the closing date whatever it needed to be.
He didn’t have an email address, so we ran the paperwork through a neighbor’s phone.
We closed in 10 days and he made his move to Missouri on schedule.
Selling As-Is Before You Leave
For sellers with a hard move deadline and no time for a prep and listing cycle, we buy as-is and can usually close in about 10 days.
I’m a cash buyer with a direct financial interest in sellers choosing the cash route, and a cash offer typically comes in below what a prepared listing would net. The gap depends mostly on the property’s condition and how long the listing would realistically run.
We put together a breakdown of how we price an as-is offer at how much an investor will pay for a house after enough relocation conversations to know where the questions usually land.
Buyers who find deferred maintenance during inspection usually come back with repair credit requests. Most relocation sellers hadn’t budgeted that negotiating time into a listing timeline that was already tight.
Listing While You Coordinate a Move
A listing works well on a relocation sale when the property is in decent shape and the move date has room in it.
Most relocation listings in decent condition run two to four months from prep through close, and the ones that go sideways usually involve something that needed the seller’s attention while they were already on the road.
Cyndi handles transaction coordination on most of our purchases. She’s seen enough listing deals break down mid-escrow to say the inspection response period is usually where sellers managing a move get caught, trying to turn around a repair credit negotiation in five days while already packing up a house somewhere else.
If Your Employer Has a Relocation Program
A smaller group of relocation sellers have an employer program to factor in, usually people moving for a large company or a federal agency. Those programs typically set a guaranteed buyout price and run a window for the seller to beat it on the open market.
Most of those programs use two independent appraisals to set the guaranteed buyout price, with a 60-day open-market window before that number kicks in.
I’ve had sellers find buyers above the guaranteed price during that window and walk away ahead of the employer’s number.
Sellers who don’t get there by the end of the window take the employer buyout, and the guaranteed price sometimes comes in lower than what they expected from neighborhood comps.
I’ve seen the open-market window land in a slow listing month, and the seller ends up below what a better-timed sale might have gotten them, with the employer’s number as the only floor they had going in.
If a Relocation Company Is Involved
Large employers and federal agencies usually contract a third-party relocation management company to handle the process, and sellers often end up dealing with that company rather than HR once the relocation gets underway. Cartus and SIRVA are the two I see most often on deals in Southern California.
The relocation company is the one who makes the guaranteed buyout offer, and if the seller takes it, the company becomes the owner and handles the resale on their end.
If the property eventually sells for more than what the company paid the employee, the difference stays with the company, and a lot of sellers who accepted the guaranteed buyout found that out after the fact.
Sellers who’ve been through one of these programs usually find the guaranteed offer came in below what neighborhood comps would support. The company’s appraisers are setting a number the program can buy at and still manage the resale risk, not a number that works best for the seller.
Some relocation companies also require repairs or staging before they’ll list the property, and those costs typically come out of the seller’s proceeds.
Some employer programs give the seller the option to sell independently rather than go through the relocation company buyout, and most sellers hadn’t asked HR about that option before the open-market window started.
When You Need to Close Before You Can Leave
Some sellers need to close and pull out the equity before they can fund a purchase in the new state, and they’re still living in the property when they’re ready to do it.
We’ve done short-term rent-back arrangements on some of those, where the seller stays in the property for a month or two after close while the move wraps up.
The terms vary by situation and Cyndi coordinates those arrangements when the setup makes sense. If that’s the shape of what you’re working with, bring it up on the first call.
Buying in Your New State Before the California Close
If you’re trying to buy in the new state before the California house has closed, the new lender is usually the first to flag the problem.
The California mortgage counts as an active liability against your debt-to-income calculation, and most buyers in that position aren’t clearing both at standard thresholds without strong income or enough equity for bridge financing.
Bridge financing covers the gap when the equity is there. In softer new-state markets I’ve also seen sellers accept contingent offers tied to the California close, and some buyers find that approach works when the seller on the other end has flexibility.
Getting a lender in the new state on the phone before committing to a search timeline is worth doing. Most sellers find out on that call that the debt-to-income math is tighter than they assumed.
If You’ve Already Moved and the House Is Still in California
If you’ve relocated before the property sells, most of the sale can run remotely.
We run the paperwork by phone and email and inspect the property on our end, and most sellers in that position have a neighbor or family member nearby who can handle walkthrough access.
The seller signs through a mobile notary who travels to wherever they are, or through remote online notarization when the title company supports it and the destination state accepts it.
Cyndi handles the notary scheduling with the title rep once we’re inside escrow.
The carrying costs on a vacant property add up fast, and by the time most sellers who moved without closing reach out, that monthly number is running higher than they figured when they left.
A lot of sellers with a vacant California property want to know how the closing actually runs without them present, and we walked through that at how the remote close works on a vacant property.
Should You Sell or Rent When Leaving California
A lot of sellers with some timing flexibility ask about holding the property as a rental rather than selling outright.
Property management typically runs 8 to 10 percent of monthly rent in the markets we work, and most sellers in that position hadn’t put that on the same line as the rental income they were counting on.
I’ve had sellers sign a 12-month lease without working through what that does to their capital gains position.
The clock on the two-of-five-years exclusion starts from the last day the property was a primary residence, and if the rental period runs long enough, the seller ends up owing taxes on a gain they would have walked away from tax-free.
We put together a breakdown of how the rent-versus-sell math usually works out at when to sell a rental property after enough of those conversations to know where the questions land.
The Capital Gains Question
Most relocation sellers ask about capital gains once they start working through what they’d actually walk away with after a sale.
Primary residence exclusion
Primary residence owners who’ve hit the two-year mark generally aren’t paying capital gains on the bulk of the gain, up to $250,000 on a single return and $500,000 on a joint return.
Most relocation sellers I talk to assume the exclusion clock is running against them the minute they move. The two-year test looks back five years from the sale date, and a seller who moved to Texas 18 months ago and lived in the California property for three years before that still hits the mark.
California’s tax on excess gain
A lot of sellers run the federal side and don’t look at the California piece separately. California follows the federal exclusion, and gains that fall within the federal limit aren’t subject to California tax either.
For sellers whose gain runs above the exclusion amount, California taxes that excess at ordinary income rates, which top out at 13.3 percent. California has a claim on gains from California property regardless of where the seller lives at the time of close, and sellers who’ve relocated to a no-income-tax state before closing still owe California tax on any non-excluded gain from the sale.
Partial exclusion for early moves
A handful of sellers are under the two-year mark because the job relocation came faster than expected, and most of them haven’t heard of the partial exclusion available for job-related moves.
The partial exclusion is proportional to the months they actually lived there as a primary residence.
We walked through how the partial exclusion math works at selling a house before 2 years.
California withholding on out-of-state sellers
Sellers who’ve already relocated before closing usually hear about Form 593 for the first time at escrow, and it catches most people off guard.
California requires escrow to withhold 3.33 percent of the gross sale price from proceeds on any sale where the seller isn’t a California resident at close, and that number comes out of the wire before it goes out.
Most sellers see a portion returned at filing, because the 3.33 percent is a prepayment toward California income tax rather than a separate charge on top of it.
Sellers whose gain falls within the primary residence exclusion can certify an exemption on the form and skip the withholding entirely, but the certification has to happen inside escrow before close, and the FTB real estate withholding page has the form and the exemption criteria.
If You’re Sorting Out a Relocation Sale
If the timing is getting tight, we can usually put an offer together within 24 hours of a walkthrough and close in about 10 days.
We buy as-is across Riverside, Orange, Los Angeles, San Bernardino, and San Diego counties, and have done enough relocation deals to work around hard deadlines, including situations where the seller has already left and everything runs through a neighbor or a family member.
Call or text us at (951) 331-3844 or head over to get a cash offer and we’ll take it from there.
Doug Van Soest spent seven years as a certified residential appraiser starting in 2003 before transitioning to buying homes full time. He and his wife Andrea (CA DRE #01505854) co-founded SoCal Home Buyers and have closed over 400 transactions across Southern California since 2008.
