Should I Sell My House in Retirement?
If your retirement is on the horizon — even if it’s several years off — you’ve likely considered the question, “Should I sell my house when I retire?” It’s only natural to put some thought into selling your house as part of your retirement plans.
To help you develop a firm plan for selling your house in retirement, we’ve compiled the likeliest scenarios you’ll face. We then highlight steps you can take to make your retirement dreams a reality.
Scenario #1: Selling your house as a means of financial recovery
Many retirement accounts suffered notably during the Great Recession of 2008. By some reports, savings were halved as a result of the market turmoil that swept the nation.
If you’re one of the many thousands of investors who incurred such losses, all is not lost. You likely hold another asset that can help shore up your retirement finances: your house.
Stocks, bonds, certificates of deposit, insurance plans, and more may all play a role in your retirement. Real estate can have a significant impact on funding your retirement as well, especially if you’ve owned your home for many years or live in an area that’s seen property values appreciate in recent years. No market remains a seller’s market forever, but timing your home sale well may be all the recession recovery you need.
If this scenario rings true for you, then the answer to the question, “Should I sell my house in retirement,” is a resounding, “Yes.”
Scenario #2: Selling your house as part of your retirement plan
Even if you weathered that financial storm with few — or no — losses in your investments, selling your house as part of a retirement plan is a natural step for many homeowners who:
- Wish to downsize because the house is too large now that all the children have moved out.
- Desire a move to a warmer climate.
- Want to move closer to their adult children, grandchildren, or the kind of lifestyle they wish to have in retirement.
This scenario creates a win-win situation for many retirees. Win number one: they cash out a considerable asset that can pave the way to a fulfilling retirement. Win number two: they trade a house that’s too big for their needs and might require pricey repairs for a smaller, more affordable house or apartment.
Scenario #3: Selling your house due to unexpected life events
There’s one other retirement home sale scenario that can spring up: the unexpected. Maybe there’s an urgent need to provide extended care for a loved one two states over. Perhaps it’s a divorce; the divorce rate for those 50 and older doubled between 1990 and 2010.
These unexpected life events can do real damage to your retirement funds. One survey found that 50-to-70-year-olds with $100,000 or more in cash savings and investments faced unexpected expenses that averaged $117,000. If you find yourself facing similar and unforeseen life events, it might be a wise idea to consider downsizing in retirement, selling your house and seeking greater financial freedom.
Three options for using your house for retirement funds
Homeowners who consider leveraging their house to help fund their retirement face three options:
- Taking out a reverse mortgage in retirement
- Selling a house the traditional way with the services of a realtor
- Selling a house the quick and easy way
When arranged according to ease, stress, and homeowner control, those three options break down as follows.
3. Taking out a reverse mortgage in retirement
In a reverse mortgage, a lender makes payments to you based on a percentage of your house’s total value. When you no longer occupy the property, that lender will sell your home on their terms and recover the money they paid you.
To receive a reverse mortgage, most lenders require you to: own your home, which must be your primary residence; be at least 60 years old; pay off any debt or existing mortgage on the home or use monies from the reverse mortgage pay it off; set aside reverse mortgage funds to make any repairs required to qualify for the reverse mortgage; and more.
As a means of bolstering one’s retirement finances, a reverse mortgage might be right for some people. But it’s also risky. Tens of thousands of people lose their homes through a reverse mortgage arrangement each year. Financial support that is difficult to navigate, very stressful, and restricts homeowner control on several fronts? A reverse mortgage doesn’t have much to offer.
2. Selling a house the traditional way with the services of a realtor
Another option for downsizing and selling your house for retirement funds is the traditional realtor approach. While not as fraught with potential hazards as a reverse mortgage, taking this path means interviewing agents, signing a listing agreement, making all necessary repairs and property upgrades, dealing with showings, and perhaps waiting as long as two months for a sale to go through. Can you imagine doing all of that while also downsizing to retire?
It also helps to keep in mind that this process brings some real costs with it. A traditional real estate agent charges fees and requires as much as 6% of your sale price for their commission. And some realtors may recommend that you repair or renovate your home to increase its sales appeal. Expenditures such as these can quickly add up and take away your much-needed profit.
Going the traditional route does have its advantages, however. Though stressful and not a process that affords the homeowner a great deal of control, it’s an avenue that’s been around for some time and is, therefore, a more comfortable experience than a reverse mortgage.
|Traditional home sale|
1. Selling a house the quick and easy way
People shop online now, from the comfort of their own homes. You can watch television on your computer. Smartphones have revolutionized the way we communicate with one another, take pictures, and play games.
Times change. Advances in customer service and technology mean there’s more than one way to downsize, retire, and sell your house. When ease, stress, and homeowner control are all factored in, HomeGo is an option you must explore. The process works like this:
- You provide your address and tell us a little about the house. We buy houses as-is, so don’t worry about us pitching you any repair jobs or curb appeal projects.
- Together, we schedule a quick, 10-minute walk-through of your property. We’ll come to you, often the very same day you provide your address. It’s much better than one showing after another of random people filtering through your life’s possessions.
- Accept our on-the-spot offer and consider your home sold. The timeline is yours to control: move today, tomorrow, or in a few months.
|HomeGo and selling your house in retirement|
They say the shortest distance between two points is a straight line. HomeGo is your shortest distance between your house today and the retirement funds you need for the tomorrow you’ve been planning for many years. Stop wondering, “Should I sell my house when I retire?” Start down the right path and contact us to see how you can sell your house in retirement today!