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Sell My House

Should I Consider Selling My Home When I Retire?

Should I consider selling my home when I finally retire?

“Would it be a good move financially – or a bad one?”

“What are the benefits of selling my home to ensure I can just enjoy my retirement and not have to worry about anything else?”

These are typical questions asked by many homeowners all across the U.S. who are coming up to that time in their lives – their retirement age – or their “golden age,” if you like.

Many people who are approaching retirement, are often concerned about having (1). enough money to live on during their later years, and (2). enough money to really enjoy their work-free golden years, whether this means a yearly holiday abroad to their favorite destination or another item on their “wish list.”

What’s more, these are exactly the right questions to ask right now.

And the right answer to each of these is the same every time:

It all depends on your financial situation…

Regardless of how you wish to spend your retirement years (and the possibilities are endless), you need to know if you can afford to live as you want – and for as long as you want.

Whatever your idea or vision for your retirement – whether it’s a condo on the beach or perhaps a top-of-the-range RV in the driveway – being financially secure has to be one of your main priorities.

Enjoy retirement sell your house

Realize Your Equity, Expand Your Retirement Goals

“To Sell or To Stay?…”

Because our homes are usually our most valuable asset, it makes perfect sense to decide soon whether or not you will continue to live in your current home. You will certainly need to weigh up each option’s “pros and cons”.

Many retirees choose to downsize. The Cambridge English Dictionary has this to say about downsizing a property:

“to move to a smaller home, usually because your home has become too large for you or as a way of saving money.”

Selling your home could very well free up valuable equity on your property, and allow you to even expand your retirement wish list.

Obviously, many homes, even with fewer growing kids living there, are still absolutely full of happy family memories, and with many other strong and emotional ties there.

However, looking after a large house perhaps isn’t really how you want to spend your hard-earned retirement, or, for that matter, how you want to spend hard-earned retirement funds on things like regular maintenance and cleaning costs.

It’s a big decision and one not to be taken lightly. You’ll have many points to consider.

The aim of this article – “Should I Consider Selling My Home When I Retire?” – is not to tell you that you should do this or you should do that.

On the contrary, our aim is to provide you with expert information to guide you through your options so your decision (whatever it might be) is a balanced and informed one.

Sell My House Retirement

Retirement Planning

You will have decided to make plans for your future retirement at some point in your life.

Retirement Planning Defined

“Determining your retirement income goals, and the necessary actions you need to take and the decisions you need to make to achieve those goals.” 

In other words, ensuring you have enough available income to continue living as you want to during retirement.

Retirement planning includes specific steps to take, including

  • Identifying your sources of income
  • Sizing up potential expenses
  • Implementing a savings program of some description, and
  • Managing your assets

Everybody wants to enjoy their retirement. Retirement planning (definitely a little boring and not very enjoyable) is necessary to make it enjoyable.

Therefore, before your retirement begins, you need to work out where you will live (at least, initially). Will you stay in your home, or will you plan to move?

Retirement & Social Security in the U.S.

The latest estimate puts the average age of retirement in the U.S. at 64.6 years for men, and 62.3 years for women. Even though you become eligible for Social Security benefits at age 62, you don’t qualify for your full monthly benefit amount until a few years later.

  • To receive full benefits if you were born between 1943 and 1954, you have to wait until 66 years of age
  • For anyone born in 1960 or later, the age increases in two-month increments up to the age of 67.
  • However, depending on the year you were born, if you postpone taking your Social Security benefits until the age of 70, you can make your monthly benefit 32% larger than it would have been at your full retirement age.
  • Lastly, and again depending on the year you were born, you won’t be eligible for Medicare until you reach age 65, so you will have to budget for your own health insurance.

Retiring in the U.S.: The Hard Truth 

Although your retirement should be something to look forward to later in life, it has its fair share of potential drawbacks and financial problems, especially if you have done little or no retirement planning.

  1. You Could Be Forced Into Retirement Before You’re Ready

The most common reasons for retirement are actually poor health and job shifts, and not a personal choice, according to TD Ameritrade’s “Road to Retirement” survey. 50% of people retired before they would have liked for reasons that include layoffs, health issues, caregiving responsibilities, and an unexpected change in their financial situation.

  1. You Can’t Rely On Social Security

If you’re counting on Social Security to fund your entire post-retirement life, be aware that Social Security is currently only guaranteed to be funded through 2035, according to Business Insider, after which time it may only be funded up to 75%

  1. Assisted Living is Expensive

According to the U.S. Department of Health and Human Services, there is a 70% chance that an American age 65 or older will need long-term living care at some point. Medicare does not cover an assisted living facility (ALF), whose costs can be incredibly high. It gets worse. A nursing home is normally twice the cost of an ALF, too. It is why many older adults have to pay for long-term care insurance during their ‘60s.

  1. Retirement Costs Much More Than You Think

In order to continue living the lifestyle that working has provided you, many experts estimate that your retirement fund needs to be somewhere between $500,000 and $1 million. This kind of amount requires not only excellent retirement planning, but starting to save at a young age.

Top 10 Benefits of Selling Your Home in Retirement

As people approach their impending retirement, it’s often the case that their existing priorities begin to change, and some of these priorities can even change considerably.

For example, many older people no longer have to be as concerned about others as they once were, such as children or other relatives, or their geographical location, which may well have been dictated by career moves and choices, and not their own personal ones.

In fact, many older people look upon retirement as the opportunity for a fresh start, a new way of life not governed by outside influences, but one that’s far more concerned with what they personally want – and want right now.

For those who choose to move away from their current area, either to move to much warmer climes, move closer to their favorite grandchildren, or move as the opportunity to downsize to a house that’s far more manageable, they need to decide what to do with their current home.

  • Keep it for their children to later inherit, pay maintenance costs, and buy or rent a second home?
  • Or do they sell it to realize the valuable equity it holds? 
  • Or sell it and rent something far more manageable, and in a location more suited to their personal choice and needs?
  • Or do they decide to do something else?

Regardless of what decision you finally reach about your existing home in retirement, there is one undeniable fact…

Housing costs will always be a major part of your monthly retirement budget, whether you stay or move, and whether you rent or own.

Here are the main benefits available to you should you decide to sell:

Selling Your Home Before or In Retirement: Top 10 Benefits

Benefit to You

Description of Benefit

1

Releasing Equity & Increasing Liquidity

Unfortunately, it’s becoming more common that people go into retirement without enough savings. However, if you own your home (either outright or you have reasonable equity in it), and if the housing market is healthy (currently, it is very healthy), selling will increase your retirement fund considerably.

 

Furthermore, having these extra funds to hand ensures you have the financial strength to realize what perhaps were distant dreams.

2

Tax Break

Selling can also come with a considerable tax break. If you have lived in your home for the last 2 out of 5 years from the date of sale, you can exclude up to $250,000 of the capital gain from the sale of the house if you’re single. If you’re married, you can double that, and exclude up to $500,000.

3

No Maintenance Costs

Homes, of course, come with maintenance costs, which will be an ongoing drain on your retirement resources. Just like people, the older your home, the more maintenance it usually needs. Additionally, the larger the house, the higher the local property taxes

4

Fewer Expenses

Ownership can be costly in other areas, too. For example, a downward slide in the real estate market can potentially wipe thousands off your current equity level. There’s insurance deductibles to take care of, too.

5

Change of Location

Moving even a small distance could potentially dramatically lower your property taxes or put you far closer to the amenities you need in retirement.

6

Perfect Opportunity to Downsize

Your “ideal home” will now mean something completely different as a retiree, compared to what it meant when you were younger. You are likely to have different priorities now as a retiree.

7

Increases Your Options

If your home equity is low, selling is still an option – you can lower your monthly housing costs significantly by selling and then renting.

8

Flexibility

Renting provides more flexibility, and you’ll spend far less money (and time) on maintenance. Renting allows you to live where you want – when you want.

9

Mobility

One word – stairs. Inevitably, as you age, you become less mobile. The staircase in your house can suddenly become a mountain, and then you would need to expensively remodel.

10

Renting Can Be Cheaper Than Owning

In many regions of the U.S., renting is actually cheaper per month than owning a house – at least in the short-term. If you are looking to cut housing costs in your retirement, selling your home, then renting a new place could well be the answer.

Alternative Benefits: Keeping Your Home

As you can see, there are many good advantages (and attached benefits) for renting in retirement. However, that is not to say that remaining as a homeowner doesn’t have benefits, too.

Whichever route you decide to ultimately go, you need to remember that housing costs will be one of your largest monthly expenses in retirement – if not, the largest.

Here are just a couple of the most important advantages of remaining as a homeowner during retirement:

  • If you own your home outright (with no mortgage outstanding), staying in your home would clearly be cheaper. However, you still have your maintenance and insurance costs.
  • Owning your home offers:
    • Stability
    • Potential tax benefits and breaks, and 
    • Equity
Sell your house for cash for retirement

Realize Your Equity, Expand Your Retirement Goals

If you are one of the thousands and thousands of Americans who retire every year without sufficient retirement funding, selling your home, and releasing the potential equity within, could be the perfect answer to the economic problem of your later years being the hardest years of your life.

No longer would you have to be relying on financial support and cash handouts from your grown-up children, or having to survive on insufficient social security payments, or watching as your life-long home (where you raised those grown-up kids) falls into further disrepair because you cannot pay its maintenance costs.

Selling your home will provide your depleted retirement funds with a huge boost and in the process, perhaps boost your hopes that your retirement is going to be the most enjoyable years of your life.

At Better Off Home Buyers, we can act quickly to release your equity in as little as 7 days by making you an obligation-free cash offer for your home. Our property investment strategy has helped hundreds of people like you release vital retirement funds, allowing them to enjoy planning their retirement.

Selling your home can allow you to downsize to a more manageable property, with less maintenance, less hassle, and located wherever you want it to be, such as closer to those grown-up children of yours and their own children – your grandkids.

Downsizing in retirement equals:

  • More time to be able to spend with loved ones, and
  • Lower monthly housing expenditure, whether it’s a mortgage or a rental payment

So why not get started today? Contact us to find out if your home is what we’re looking for, and allow us to make you an immediate equity-releasing cash offer to boost your retirement funds, and change the financial outlook for your all-important later years.

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Foreclosure Sell My House

How Can I Sell My House Fast & Before Foreclosure?

Foreclosure is the process of losing your home because you cannot keep up your mortgage payments.

As long as you don’t sit there in complete denial of what’s happening, you have enough time to check out all your options. One of the more popular of these is selling the property fast – before the foreclosure can be completed. 

However, just like the intended sale of the property, you need to move fast, too.

For many Americans, particularly first-time buyers, buying a home could be considered a risk, especially if they have mortgaged themselves. 

Factor in that little thing called “life” – meaning no one can predict what the future may hold – and you can see there might be very little financial leeway or room for maneuver for many new homeowners should something unforeseen happen.

And let’s face it… Who could have foreseen the coronavirus pandemic? Or its devastating knock-on effects, such as the U.S. economy coming to a near-standstill, millions of workers losing their jobs or being furloughed, and the premature foreclosure of many businesses across the nation?

Unthinkable, surely? But it still happened anyway.

house with front lawn day time.

The “Foreclosure Moratorium” (known formally as the CARES Act) – introduced by the federal government as their response to these knock-on effects of the pandemic, offering both practical and financial assistance to homeowners – has now come to an end.

The harsh reality, then, for many homeowners are their revised mortgage payments – payments that they may not be able to continue making.

Many housing market experts initially predicted an unstoppable “foreclosure tsunami” – however, that has not happened.

Although certainly not on the scale predicted, we will still soon see more and more banks and lenders sending out legal notices of foreclosure to homeowners, and, sadly, many of these people will go on to lose their homes.


 

In this current housing market, almost every homeowner has equity. So, don’t be in denial and go into foreclosure. That just gives your equity back to the bank.

If you’re 60 days behind and you know you can’t catch up, call a real estate agent, get the house on the market, and get as much money out of it as you can.”

– Bethany Mendoza, respected California real estate agent

 


Because the consequences of the foreclosure process can be so serious – including the loss of a home and a ruined credit history that is certain to follow you wherever you go – many homeowners will look for almost any way to avoid foreclosure. 

As we have already mentioned, one clear and popular solution is to sell your home before the foreclosure process is either initiated or completed. 

However, in the interests of presenting a more balanced view throughout this article, we will also look at the alternatives to selling if your home should go into foreclosure.


Image of a couple selling their house before foreclosure

What is Foreclosure?

Foreclosure is usually defined as “the action of taking possession of a mortgaged property when the mortgagor fails to keep up their mortgage payments.” 

Put simply, however; it’s possibly a homeowner’s worst nightmare.

Fortunately, foreclosure is a legal process rather than a simple action – it certainly doesn’t happen overnight. This means you have time to look at your options and choose the best course of action that works for you – and you alone.

To give you an idea of how long the foreclosure process can take. Currently, the average foreclosure in the U.S. takes around 924 days. However, it is all dependent on which specific U.S. state you live in.

In the case of a home being foreclosed upon, usually, the lender will take measures to repossess the property. Once that has been done, the lender will market the property in an attempt to sell the house and recover the amount owed on the outstanding loan. 

This can legally happen because mortgage loans are secured by the real estate, meaning that the home your mortgage is for is also used as its collateral.

Importantly, if you become unable to make your mortgage payments and subsequently default on your mortgage loan, you are at risk of foreclosure.

You need to realize that the foreclosure on your house can lead directly to you being evicted from your home. Without a doubt, it will certainly ruin your credit history.

picture of someone signing a mortgage

Mortgage Loans: What is Pre-Foreclosure? 

You may have heard the expression “pre-foreclosure” and made presumptions about what the term means. To provide you with as much detail as possible about all the legal jargon you may hear during this process, here is an accurate explanation of pre-foreclosure.

Pre-foreclosure, the first step in the foreclosure process (as you can imagine), occurs when a homeowner’s mortgage is delinquent or in defaultbut before the lender has taken any significant legal action to recoup the overdue balance, known as mortgage arrears

A mortgage loan default normally occurs when the homeowner has a specified number of late mortgage payments or is in arrears. 

If the homeowner continues to miss making monthly mortgage payments, then a lender will send them a notice of default – a public notice that the bank or mortgage company files with a court. This notice legally informs the borrower that their mortgage is in default. 

During pre-foreclosure, homeowners still have the opportunity to work with their mortgage lenders to stop the foreclosure process from continuing to its conclusion. Another process often referred to as loss mitigation.

Lastly, be warned – the foreclosure process in each U.S. state can vary from state to state – right across the country.

lawyers talking about foreclosure law

Foreclosure in the U.S.: The Legal Process

The process of foreclosure can be instigated by the terms of the mortgage or “deed of trust” contract, which grants the lender the legal right to use a property as collateral. 

Subsequently, foreclosure can begin if the borrower fails to meet the agreed and specified terms of the mortgage document, eg. they become unable to make the required mortgage repayments.

Although the legal foreclosure process varies from state to state [and this is discussed later in this article], it normally begins when a borrower defaults or misses at least one mortgage repayment.

In response to this, the lender will send a “missed payment notice” – stating that the payment has yet to be received.

If two payments are then missed, the lender responds by sending a “demand letter.” 

However, at this point, most lenders will still be happy to allow the borrower to make up all of the missed payments.

However, after 90 days of missed payments (meaning a third payment has not been made), the lender responds by sending a “notice of default” to the borrower. 

This is an important date in the calendar for the homeowner who has defaulted because now their loan is officially handed over to the lender’s foreclosure department.

The homeowner now enters a 30-day period known as the “reinstatement period,” where the lender grants a further 30 days for the homeowner to make all the previously missed payments, bringing the loan account up-to-date.

If these payments are made in full, the loan can then be legally reinstated

However, if the missed payments are not made during this reinstatement period, the process of foreclosure can legally begin.

Within a month or two, the foreclosure will appear on the borrower’s credit report and will remain there for a further 7 years.

Foreclosure map of USA west coast

How Do Foreclosure Laws Differ From State to State?

State foreclosure laws (a set of legal procedural steps for the lender to foreclose on a property) can vary from state to state; the significant aspects of a foreclosure that can differ include:

  • The Foreclosure Procedure
  • Deficiency Judgements
  • Redemption, and
  • Reinstatement

1. The Most Commonly Used Foreclosure Procedure By State

In the U.S., a foreclosure can be either:

  • Judicial: the foreclosing party (the lender) files a lawsuit, and the case goes through the court system, or
  • Nonjudicial: the foreclosing party (the lender) follows a set of state-specific, out-of-court procedural steps to legally foreclose.

In around half of all U.S. states, foreclosures follow the judicial procedure. In other states, foreclosure can be either judicial or nonjudicial. Therefore, it is always advisable to find out what procedure your state follows – either judicial or nonjudicial.

You can learn which foreclosure procedure is applicable in the U.S. state that your property is located in by checking out this 50-State Chart, provided online by Nolo, a legal assistance website.

2. Deficiency Judgments

When a house is sold at a foreclosure sale for less than the outstanding mortgage debt, the difference between the total debt and the foreclosure sale price is called the “deficiency.” Some states do not allow these judgments under certain conditions.

3. Redemption

.Some U.S. states give foreclosed homeowners a “redemption period” to buy back or “redeem” the property after a foreclosure. To redeem the property, depending on state law, you’ll either have to reimburse the purchaser for the amount paid at the sale, plus allowable costs, or repay the total mortgage debt, plus interest and expenses.

4. Reinstatement

As described earlier, a “reinstatement” occurs when the borrower brings the delinquent loan current in one payment by paying the overdue payments, plus fees and expenses incurred due to the default.

How To Sell Your Home Fast Before Foreclosure

There are a couple of ways to sell your home before the foreclosure process is completed. The first is through a “short sale,” which is an option discussed in detail below, and the second is by selling your home in the normal way, either through a traditional real estate transaction or by selling to a property investor.

You can try to sell your home before or after the foreclosure process begins – but not after a foreclosure action is complete. At that point, the property will be owned by someone else, whether it’s the lender or a new homeowner.

If you want to sell your home instead of dealing with foreclosure, it’s far better to fully explore this option as soon as you know for sure that you’re having financial difficulty.

To put it simply, the longer you leave it, the more difficult it can (and will) become. Therefore, a proactive approach will give you time to find a buyer who can offer a good price on your home. 

Even so, if you wait until the foreclosure process has formally begun, you can still sell your home – but you’ll have to move quicklyno pun intended.

Fortunately, many banks and other lenders are willing to slow the foreclosure process if it means you can sell your home, and so pay off everything you owe – meaning the lender gets all their money back.

Your Choice: Real Estate Agent or Property Investor?

Prior to the beginning of the foreclosure process – and even during the period of pre-foreclosure (described above) – you can sell your house as normal, by either using a real estate agency to market and sell the property, to invite a property investor to make you an offer, or to sell the house by yourself, known as “For Sale By Owner” (FSBO).

However, whichever route you ultimately choose, you need to ensure the following criteria is met: 

  1. The sale of the property has to be timely – and certainly quicker than the time it takes for the property to go through the entire foreclosure process, and
  2. The sale of the property has to cover the amount outstanding on the mortgage loan, otherwise you may be subject to a deficiency judgment (also described above).

Given these considerations – speed of sale and value of sale – selling the property through the FSBO route is certainly not reliable enough to guarantee the necessary time scale will be met. Regardless of how much you could earn on the sale, it counts for nothing if the lender swells your property in the meantime.

You are presented with exactly the same issue by going through the real estate agency route. If the property is not sold in time, you risk the house being sold by your lender in a foreclosure auction.

Importantly, you need to be aware that, according to the latest housing market data:

The average time it takes to sell a property through a real estate agency in the U.S. is over 90 days

Therefore, the only way to absolutely guarantee the sale of the property before the foreclosure goes too far is by using the services of a property investor – obviously depending on how much they are willing to pay when they make their offer.

For an investor, time is certainly not an issue, as they have the necessary cash reserves to make an offer, have it accepted, and then close the transaction quickly.

Additionally, the homeowner is provided with their profit from the sale fully in cash, allowing them to settle immediately with the lender, and then to move on to the next chapter of their lives – importantly, with their credit history intact.

“Short Sale” or “Deed in Lieu of Foreclosure”

For those homeowners who are already subject to the terms of the foreclosure process, there are a couple of options still available, but these depend entirely on your lender; these are

  • Short Sale: Only if your lender agrees, you might be able to avoid foreclosure by selling your house for an amount that’s less than your outstanding loan balance, known as a “short sale.”

Deed in Lieu of Foreclosure: Your lender may agree to letting you deed the property over, so that no foreclosure is necessary; this is known as signing a “deed in lieu of foreclosure.”

sell your house to an investor

The Alternatives to Selling Your Home in Foreclosure

Here are your best options to avoiding foreclosure, if you choose not to sell your home. Remember, in order for you to get the end-result you’re looking for, you need to be proactive from the outset.

 

Foreclosure Option

Explanation

1. Reinstate Your Loan

If you have enough cash available, you can reinstate your loan by paying all the missed payments, including principal and interest, plus fees and expenses. If the state law doesn’t grant the right to reinstate, speak to your mortgage servicer without delay.

2. Repayment Plan

You may qualify for a repayment plan, where you arrange to make up missed payments over a set period of time, and stay current on your ongoing payments in the meantime.

3. Forbearance Agreement

A “forbearance agreement” is when the lender gives you permission to make reduced mortgage payments for a limited time. Forbearance for 3-6 months is typical. 

4. Loan Modification

A loan modification is an agreement between the borrower and the lender to adjust the loan terms, usually to agree to a lower monthly payment.

5. Refinance

If agreed, you may be able to refinance the remaining amount of the loan at a better rate, and pay off the existing balance.

6. File for Chapter 7 or Chapter 13 Bankruptcy

If you want to keep your home, a Chapter 13 bankruptcy may help you to do this. However, a Chapter 7 bankruptcy usually will not stop a foreclosure long-term (unless you can get a loan modification approved in the meantime). 


Please understand that bankruptcy is a big step for anyone to take, and you should not file for bankruptcy just to delay a foreclosure. Consult a bankruptcy lawyer without delay.

7. Government-Backed Mortgages

Special workout options are available if you qualify for any of these options:


Ask your housing counselor, servicer, or lender for details.

The Benefits Of Selling Your Home Before Foreclosure 

There are several clear and distinct benefits to selling your house before your lender has the opportunity to  foreclose on the property; these are:

  1. Your credit report will have no foreclosure recorded: Most foreclosures will stay on a credit report for 7 years and will negatively impact your ability to get a loan or secure housing moving forward.
  2. If you decide to buy another home, you can do so within 3 years: Prospective home buyers who have previously been the subject of a foreclosure must wait 3 years before they can apply for an FHA loan.
  3. You will avoid a deficiency judgment: A deficiency balance exists if the proceeds from a foreclosure sale aren’t enough to pay off everything you owe under the mortgage, and some states allow the bank to recover this difference from you through a deficiency judgment.

How Fast Home Buyers Now Can Help You

Fast Home Buyers Now is an established and reputable independent property investment company, who have helped numerous clients to resolve their real-life real estate issues, like being in foreclosure, and so to move on to a better and more financially secure future.

 

The 3-step process of selling your house to Fast Home Buyers Now is incredibly simple, as you can see below:  

When it comes to selling your house, there is no perfect solution. If you do not need to sell your house quickly, perhaps selling your own home using a traditional real estate agent could be the answer.

However, if you find yourself in the potential nightmare of foreclosure, and you do need or want to sell quickly, working with Fast Home Buyers – could very well be the perfect solution you’re looking for. 

We’ve helped hundreds of people with their properties – sometimes in even less than a week. Feel free to contact us today, get your fair cash offer, and find a solution to your property problem.