February 6th, 2014
We hope you’re having a great week. In this roundup, we’ll look at when you should sell your home when you retire, why you need a good mortgage broker, and what are pocket listings.
For most of us, our home is our biggest asset, but it’s also the biggest expense. When it comes to retirement planning, a house often falls to the bottom of the list of priorities for change.
Mostly, it’s difficult to think about getting rid of your home. And moving itself is quite a hassle.
And many new retirees don’t want to think about what it would be like to live in a house with three flights of stairs if they develop health problems.
But the truth is that it makes sense to sell sooner rather than later if you intend to downsize your home. The financial benefits may not seem huge at first, but over time they can make a meaningful difference in extending the life of a nest egg. As retirees age, there are lifestyle issues to consider, such as being in a community with other older adults.
Also, if you think the home won’t be an expense because you’ve paid off the mortgage, think again. There will always be major costs involving maintenance such as roofs, hot water heaters, landscaping, and general repairs. Even with a mortgage that has been paid off, housing often accounts for 30% of retirement expenses, says Steven Sass, an associate director at the Boston College Center for Retirement Research.
Some people want to hold onto the home for the sake of the children. The best way to handle this is to talk with the kids. They may not want the home but would rather see you settled and comfortable.
A good mortgage broker can save you a lot of money while a poor one can make the home-financing process a nightmare, which is why experts recommend shopping around to find the best fit.
The best brokers have relationships with multiple lenders to have access to a slew of loan products, says Richard Bettencourt, Jr., branch manager at Mortgage Network.
“Mortgage brokers have the ability to actually work with a variety of different wholesale lenders. It’s not uncommon for a mortgage broker to have as many as 30 or more wholesale investors at their disposal” says Bettencourt. “Not every wholesale lender will be able to close every transaction, so it’s important for the mortgage broker to have program diversity.”
Watch out for mortgage brokers who make promises before they understand your financial situation.
Ask about the average time it takes for loans to close, appraisal timelines, if there’s a loan processor on staff and how many lenders they work with.
Choose a brokerage firm that also employs experienced loan originators. You can verify the credentials of loan originators at the NAMB website and find out their work history and if there is any enforce actions against them.
One of the worst things a home seller can do when listing a home is price it too high. Anyone researching on the MLS site can see how long the house has been on the market, and how many times the price has dropped. This gives buyers leverage.
That’s why some sellers are asking their agents to market the home by word-of-mouth among colleagues and brokers, before the home ever is entered into MLS.
This also allows the seller and their real estate agent to determine if the price is appropriate. And it also allows buyers to purchase the home before it gets on the market and open to bidding wars.
The downside is that the buyer risks overpaying when home sellers test the market. And seller risk losing out if they underprice their property.
While pocket listing is a strategy that can be used at any price point, it often has particular appeal to luxury buyers. Sometimes, as in cases of high-profile sellers who don’t want many people walking through their home, sellers never intend to list.