house for sale concept

What to Consider When Selling a House with a Reverse Mortgage

One of the general conditions of a reverse mortgage in the Hoosier State is that the property used as the loan security must be the borrower’s principal residence. It can’t be left unoccupied by the owner for one continuous year or 12 consecutive months because doing so is considered a permanent move. As a result, reverse mortgage repayment will be triggered automatically.

Planning to sell your home fast in Franklin, Indiana is reasonable. After all, you need the funds to repay what you owe if you are about to move to a nursing home, an assisted living facility, or a loved one’s property beyond the threshold.

To get a sufficient amount of cash out of the sale and go through the process with as little stress as possible, below are the things you should consider the most.

Property Value

First and foremost, knowing how much your property is worth before entertaining any buyer helps. It allows you to negotiate the price properly. Even if you might need to accept less money for it to close the deal sooner rather than later, you should nevertheless use the latest appraisal of your house as a guide.

Furthermore, do not forget about the contents of your house. Sort out what you will bring with you and what you will leave behind. Those you will not bring can be sold, so you end up with more cash.

You can also use them as a bargaining chip to increase your asking price. However, cash buyers are usually more interested in flipping houses for resale and might not have any use for pre-loved belongings.

Loan Balance

If you can’t get your house sold for what it is currently worth, do not accept an offer less than the balance of your reserve mortgage. This decision is super important when you have had your loan for a longer period.

The more time you have had your reserve mortgage, the more home equity you have lost in the process. In other words, what you owe your lender increases over time if you receive the proceeds on installment.

Any buyer will try to purchase your property for as little money as possible. In your case, your goal is to sell it for a price big enough to cover your entire loan balance and maybe pocket extra cash if you negotiate strategically.

House Condition

home exterior

The structural integrity of your house will dictate how much wiggle room to negotiate the price. While home improvement is a requirement of your reserve mortgage, there is a good chance that your house could no longer hide its age despite timely upkeep.

Understand the current condition of your property before accommodating any buyer. This way, you can ensure that you will not get ripped off and be tricked for accepting less money.

Relocation Date

It is not uncommon for a house for sale to stay on the market for months. In areas where real estate demand is low, a seller could wait for more than 160 days before the perfect buyer comes along.

If you are in a hurry, you can be prepared to take smaller offers to make your house more marketable. But then again, you can choose to maximize the 12-month “permanent move” window, so you will not seem desperate and be manipulated at the negotiating table.

Selling a house can be stressful, especially in your sunset years while carrying a mortgage. Nevertheless, you can make the process less of a hassle if you plan everything properly and understand the things that truly matter.