When it comes to retirement, most people take advantage of the sudden drop in responsibility to relocate to somewhere more palatable. When you don’t have to worry about a daily commute or doing the school run, location becomes much more flexible when it comes to daily living. Selling your current home is the first step to consider, and if you’re planning to relocate to a better property, then you’re going to need to make sure that you get a good price for your current home. Finding ways to improve the price or speed up the sales process will ensure that you start your retirement in the right way, and help make the entire process significantly smoother. Here’s how you can fast-track your home sale and get on with the enjoying relaxation that is retirement.
Quick ways to speed up a sale
Before you put your property on the market, you need to make sure that it is ready. Remember that homebuyers want to see themselves living in a home before they commit to buying it, and there are some easy ways to help that process. Declutter your home so that you maximize the feeling of space, and allow potential buyers to see more of the property itself. It is often worth renting out a storage facility if you have too much clutter in your home, but always remember that buyers are also looking for a lifestyle. Make your home look its best, but do include some personal touches so that buyers can see the potential of the property.
Improve those first impressions
Curb appeal is vital in the realtor market. Most buyers make a decision on a property before they even walk through the front door, so you need to make certain that your first impression counts. Ensure that your front lawn is tidy and neat and that you make repairs to existing issues like leaky drainage pipes or loose tiles. Give your front door a fresh coat of paint and always consider the way that your property looks from an objective standpoint. Make sure that you keep as much of the personality of your home as intact as possible, but never underestimate the importance of that first impression.
Add value to your home
One of the best ways to get a better price for your property is to make cost-effective changes to it. There are some key long-term considerations to think about, and whether you opt for a complete overhaul of the central heating system or a conversion to a smarter home, adding value could make retirement a much easier transition. Make sure that your changes are in keeping with the theme of your home, and consider applying to get a Peerform loan that can help you cover the costs of your transformations and see you earn much more profit from the sale. From garden improvements to adding an entire extension, adding a high-value upgrade to your property is always worth considering.
Selling a home needn’t be a stressful experience. Whether you’re on the verge of retirement or you’ve been enjoying the peace and quiet for a while now, selling your home and relocating could be the key to getting the maximum benefits in your new, retired life.
While I found the home-buying experience fun (most of the time), there were some costly mistakes that I narrowly avoided. I’m not perfect. I made some smaller scale mistakes on the way, but lucky for me, it wasn’t anything too costly. (That’s why I wrote a book so other homebuyers would hopefully avoid repeating some of my smaller mistakes.)
Without further ado, here are five common mistakes by first-time homebuyers and how to avoid them.
Mistake #1: Shopping for the Lowest Rate Mortgage
When you’re booking a vacation, do you book the cheapest airline ticket, ignoring things like flight times and layovers? I hope not. So, why do so many of us do the exact same thing when we’re shopping for mortgages? We look for the mortgage with the lowest rate without consider anything else, when there are so many other things to consider – mortgage penalties, prepayments and portability to name a few.
A lot of first-time homebuyers aren’t concerned about mortgage penalties, but here’s why you should be. Six out of 10 Canadians who sign up for a five-year fixed rate mortgage break it before the end of the mortgage term. If you asked those 10 Canadians whether they’d break their mortgage when they first signed up for their mortgage, I’m willing to bet all 10 would have said no.
That’s why it’s so crucial to choose a mortgage with a low mortgage penalty. That’s where a mortgage broker can come in handy. He can help you choose the ideal mortgage based on your financial situation. You’re probably better off paying a slightly higher mortgage rate if it has other features that are important to your like prepayments and a lower penalty.
Mistake #2: Not Getting Preapproved for a Mortgage
Before going house hunting, don’t forget to get preapproved for a mortgage. Without a mortgage preapproval, you won’t have any idea about how much you’re able to spend on a property. You could spend $600K on a home, only to find out a lender will only approve you to spend $550K, leaving you left to make up the financial shortfall. Don’t let this happen to you.
There’s another reason you want to get preapproved. You’ll benefit from a rate hold. When you have a rate hold, which is usually between 90 and 120 days, if mortgage rates go up during this time, you’re guaranteed the lower rate (or the spread if you’re pre-approved for a variable rate mortgage). You have nothing to lose.
And just because your lender preapproves you to go out and spend $550K on a property, doesn’t mean you have to spend that amount (or even more). Take the time to prepare a mock budget if you were already living in the home. Consider housing related expenses like your mortgage payments, utilities, property taxes and home insurance. (If you’re unsure of how much to put aside, ask your mortgage broker or parents if they’re homeowners to get a rough estimation.)
Be sure to plan ahead in case you run into financial difficulties or costly home repairs like a leaky roof. The last thing you want is to be “house rich, cash poor,” with no money left over for emergency repairs.
Mistake #3: Forgetting to Budget for Closing Costs
If you’ve never purchased a home, it’s easy to overlook closing costs. I almost made this mistake myself. I wanted to put every spare penny towards my down payment, so my mortgage would be as low as possible. Luckily my mortgage broker said that I should keep some money aside for closing costs. I’m glad he did, otherwise I could have found myself in a financial pickle and I may have had to borrow the money from my parents. Not a good begin homeownership.
Closings costs are anything but a drop in the bucket. They can add up to quite a bit. Closing costs typically add up to between 1.5 and four percent of the purchase price of a home. For example, on a $550K home, you’d be spending up to $22K on the “transactional costs” of real estate. And it’s up to you to save that money ahead of time. Your lender won’t foot the bill.
Some of the most common closing costs for first-time homebuyers are land transfer tax, real estate lawyer fees and home inspection fees. As a first-time homebuyer, you may receive a rebate on land transfer tax depending on the province you live in, but closing costs can still add up to a lot. Don’t overlook them!
Mistake #4: Purchasing a Home Based on Looks
Purchasing a home based on looks is a lot like dating based solely on appearance. Sure, looks matter to a degree, but other factors like compatibility matter, as well.
When you walk inside a home for the first time, it’s easy to fall in love at first sight and focus on the looks. Sure, it’s impressive if a home has a new kitchen with granite countertops and stainless steel appliances, but what if the “bones” aren’t in good shape? The roof, windows, furnace and structure. Anyone can pay someone to put in a new kitchen, but if the roof is falling apart, is this a place you want to call your own? Are you willing to spend the money on fixing it up? If a home is a flip, corners may have been cut to save time and money. Pay attention to everything to help avoid buying a money pit. It also helpful to hire a competent home inspector, which we’ll discuss next.
Mistake #5: Forgoing the Home Inspection
In hot real estate markets, some homebuyers are choosing to skip the home inspection. When you find your dream home and 10 other people are also interested, it’s tempting to forgo the home inspection and make a clean offer (an offer without any conditions). While a clean offer can help you come out ahead and get your dream home, you’re also leaving yourself open to all sorts of costly repairs you might not have anticipated. For instance, the home could have structural issues that only an inspector might notice or a chimney that’s leaning (this happened to me).
A home inspection is almost always money well spent. You’re most likely making the single largest financial transaction of your lifetime. If you’re afraid you might lose the house if you include a condition of inspection, why not do the inspection ahead of time? (Referred as a pre-inspection.) That way if the inspection looks good, you can make an offer on the home with the peace of mind knowing that you’re investing in something that’s rock-solid.
Most consider the number one pro of a reverse mortgage to be no more house payments. In a reverse mortgage, a company, such as American Advisors Group, basically purchases your home from you but still allows you to live in it. You retain official ownership – your name stays on the deed – but when you die, the home transfers ownership to the reverse mortgage lender. This being said, no house payments help you live more comfortably in your retirement, which is a nice perk.
With an AAG Reverse or other lender’s mortgage, you can take the monies in one lump sum, in monthly advances for a designated duration, or as a line of credit you can tap into when needed. Some lenders will also allow you to combine these options, such as taking a small lump sum so you and your spouse can travel around the world and put the remainder in a line of credit. It’s important to note there are fixed or adjustable interest rates attached to these monies.
You can finance your traditional closing costs in the reverse mortgage, which means little money comes out of your pocket once the reverse mortgage is approved. Most reverse mortgages are also exempt from income taxes, although it’s always wise to confirm this with the lender and your CPA. In most cases, the reverse mortgage will not affect your Medicare and Social Security, and you nor your heirs are liable for any increase in your home’s value once the reverse mortgage is collected.
Nothing is too good to be true, and reverse mortgages do come with some cons. Because you still live in your home and retain its title, you remain responsible for home insurance and maintenance costs, homeowners association fees (if applicable), and your property taxes. You also remain responsible for loan interest and fees as they accumulate over time. If you financed your closing costs, you’re liable for those, too, if they aren’t covered in the loan collection, i.e. your home’s sale.
If you plan to leave your home to your children, they won’t get it with a reverse mortgage unless they buy it outright. Once you pass on, your home’s title is transferred to the lender, as mentioned above, and if there isn’t any equity leftover in your home, your kids won’t receive anything from its value. Another thing to watch out for is the mortgage fees. In some cases, they are higher than traditional mortgage fees, so keep an eye on them.
Check with your Medicaid and Supplemental Security Income benefits consultants, too, if you receive either of these federal aids. A reverse mortgage can affect your eligibility and/or benefits amounts, so don’t go into the loan blindly. Understand that if you are ill and must vacate your property for longer than 12 months due to hospitalization, the lender has the right to sell the home and force the repayment of your mortgage. You cannot vacate your home for more than 6 months when healthy.
Is a reverse mortgage right for you? Only you can tell, but now that you know the pros and cons, you’re better suited to make a decision. Talk with experts in reverse mortgage lending and your CPA and benefits consultants. Make sure you have the answers to all your questions.
Go for award winners
The investment sector plays host to plenty of recognition schemes that provide industry leaders with a chance to be rewarded for their efforts. Everything from client fund protection to good customer service is recognized in these awards – so as someone looking for investment services yourself, the value of these schemes lies in the way that they can point you towards the best professionals to go to. If you’re looking to invest in Britain, for example, then the nominees for the Share Magazine Shares Awards might be a good place to start. In Australia, the Stockies awards for Australian brokers is a great place to look. No matter where you plan to invest your cash, there’ll be a relevant awards scheme in the country that you want to use.
Find a specialist broker
There are brokers in every major economy around the world, and all of them have wise investment knowledge when it comes to navigating the local markets. However, if you’re based in Seattle and you’re planning to invest in Sydney, then a local broker in either of those places is inevitably going to be more familiar with their own environment than with the wider one.
Step forward the specialist international broker: by approaching a practice or an individual who is an expert in international investing, you’ll save yourself time in the long run as they’ll know how to help. These are usually available through a Google search, or your domestic broker may be able to put you in touch with their practice’s international branch.
When investing abroad, you’ll usually need to have a good currency dealer on hand who can help you keep as much as you can of your international profits before converting them back into dollars. Some important options to look out for in a currency broker include bulk-buy deals, whereby the exchange rate fee is slightly lower if you’re cashing out a large amount of money. This way, you’ll be able to structure your profit withdrawals strategically and at the right time in order to pay as little as possible on the transaction.
If you’re thinking about investing abroad, then you’ll know that it’s not always simple and easy. There’s a lot to think about, and you could find yourself in trouble if you don’t get the help that you need to make it go as smoothly as possible. From finding a reputable currency dealer to locating an international specialist who works across borders, you’ll be giving yourself the best possible chance of international investment success.
Selling in the Summer
Summer is a great time to put a house on the market because people tend to take more time off work, so they may be more inclined to go to open houses. Some homeowners even like to get creative and host a little barbecue as part of an open house. Another benefit of the summer months is that the curbside appeal of the house is at its peak because any foliage will be in full bloom.
However, one thing to consider is how hot it tends to get in your area. If the summers are particularly brutal, then a lot of prospective buyers will not want to venture out. Additionally, a lot of people go on vacation during this time, so there may be fewer people in your area actively looking for houses. For homeowners in more moderate climates, summer can prove to be advantageous.
Selling in the Fall
A lot of homeowners tend to avoid selling in autumn. The reason for this is due to the fact there is so much more going on. Parents have to get their kids ready for the new school year. As a result, you have a lot less competition in the marketplace, and potential buyers are more likely to flock to your property.
The drawback to keep in mind is that while fewer homeowners put their houses on the market, fewer people tend to look. They also tend to be busier during this time with the kids, so you may not get as many phone calls.
Selling in the Winter
Winter is usually the least popular time to put a house in the marketplace. The weather is at its worst, so the curbside appeal of your property will be at its lowest. If you have a gorgeous garden, then you probably cannot show it off to its fullest potential during this time.
On the other hand, you may be able to command higher prices for anyone who is looking to buy. Fewer houses means would-be buyers have fewer options. In the event you absolutely must sell your home during this time, then it may be prudent to look at companies that advertise, “We buy any house.”
Selling in the Spring
In general, spring is the best time to sell for most homeowners. Your yard will look its best, and it will serve as an optimal time for families to move.
Most families tend to avoid moving in the middle of the school year because they do not want to disrupt the children’s studies too much. Buying a house in the spring means the deal will close in 30 to 60 days. That means the actual move will not actually occur until the summer when the kids are out of school. When you have an open house in the spring, you can definitely expect a lot of people to come through.
The time of year is merely one factor to consider amongst many. You also need to consider whether you live in a metropolitan or rural area. You also need to look at what other houses in your neighborhood have sold for. Considering all this will increase the chances of getting the most out of your house.