You take out a reverse mortgage with the intent of ‘aging in place.’ Millions of Californians do the same thing. It’s more pleasurable to stay in the home you built up equity in and enjoyed with your family than moving into a retirement home or even downsizing. Sometimes, though, staying in your home is too expensive for your retirement budget.

A reverse mortgage can help you stay in your home in San Francisco, California without worrying about how you’ll afford it. But sometimes, selling the house even after getting the reverse mortgage makes more sense.

Here’s what you must know.

Sometimes life doesn’t go as planned and you find yourself selling your house with a reverse mortgage. Whether it’s the end of an era or you just can’t keep up with the bills, here are the top reasons homeowners with a reverse mortgage sell their homes in San Francisco.

• You must move into a home with more round-the-clock support. Once you don’t live in the property full-time, you must sell it according to the reverse mortgage guidelines.
• You get behind on your real estate taxes or homeowner’s insurance. To keep the reverse mortgage, you must be on time with your taxes and insurance.
• You can’t pay to maintain the property. If you fall behind on maintenance, this violates the reverse mortgage guidelines and you’ll need to sell the home.
• You’re ready to move on with your life and/or find a simpler place to live.

Since a reverse mortgage operates differently than a traditional mortgage, you’ll take a few extra steps to sell your home with a reverse mortgage in San Francisco, CA.

1. Talk to your lender

Don’t list your home for sale until you talk to your lender. You need to know how much you owe on the home. Even if you made payments (not required) throughout the term, you’ll have a balance due based on the amount you withdrew from your equity and the interest accrued.

Your lender can provide you with a payoff of the amount you owe, but it’s only good until the date they make it through. This will give you a good estimate of how much you need to list the home for to make a profit if that’s your intention.

2. Get Support

When you sell a home with a reverse mortgage, you want to make sure you get the fair market value for the home, so you have room to pay off the mortgage and make a profit.

You’ll need the guidance of a real estate agent and a professional appraiser. A real estate agent can give you an idea of what you can ask for the home, but a professional appraiser will create an official report that shows the home’s fair market value, which is what buyers’ mortgage companies will use to underwrite their loan.

3. Fix up your Home

If you got behind on maintenance or know there are things wrong with the home, consider fixing them before selling the home. You’ll get more money for the home when an inspector can’t find anything wrong with it.

If you defer the maintenance or repairs, it could reflect in your sales price as buyers will either bid a lower price or want a credit at the closing to make up for the costs, they’ll incur to repair the home.

4. Close on the Sale

The final step is to close on the sale of your home in San Francisco, CA. The escrow agent will pay off your reverse mortgage, and the remaining funds will cover the other costs of selling a home including transfer taxes, leaving you with the difference (your profit).

Selling your home with a reverse mortgage in San Francisco isn’t much different than selling your home with a traditional mortgage, but there are certain factors you should consider.

• Don’t sell your home when the value is down. While you won’t owe the difference between what you owe and the lower sales price, you won’t walk away with a profit either. If you can help it, hold off and wait until values increase again.
   
• Don’t sell to the first bidder. Even if you’re in a hurry to sell because you can’t afford the taxes or keep up with the maintenance, the bank isn’t going to come knocking on your door the next day. You have time to sell your home, take the time you need to market it well, and get the price you deserve.
   
• Don’t sink too much money into it. While the home should be in good condition, that doesn’t mean you have to upgrade everything or invest a lot of money. Make sure the home is safe, sound, and habitable and that’s it. Your buyers will make the cosmetic changes they want.
   
• Don’t be pressured to sell. Only sell your home when you’re ready. You must be at peace with leaving the home and with the financial aspect of the transaction. Get support while deciding, but don’t do anything you aren’t ready to do.

It’s easy to sell your house with a reverse mortgage, but it does take some careful planning. If you’re thinking about selling your home, talk with a licensed real estate agent. If you haven’t gotten a reverse mortgage yet, but are thinking about it, download my free book at www.reversemortgagelive.com.  

This is a short-term offer, so get your copy quickly and see how easy it is to get a reverse mortgage and live off your home’s equity until you decide it’s time to sell.