In my work, I come across this situation all too often. The kids have left the nest, and it’s Mom and Dad in a 4-bedroom home all by themselves. Or, the kids have moved to another state, and now there’s a grandchild, and it takes a long plane ride to see him or her. If only you could buy your retirement home, before having to pack up and sell your current home that keeps memories from the past 3 decades. With the right strategy, and partnering with a top real estate agent in the East Bay, like Mareijke Weidemann, this can easily become a reality.
Why Work with Mareijke Weidemann?
First, when you team up with Mareijke Weidemann, a dual licensed CPA and realtor. She takes a strategic and tax-efficient approach to advising her clients through these transitions while minimizing the disruption during this asset transition. Her financial expertise ensures that you are connected with the best financing partners, including navigating through real estate listings in the East Bay, should you need it, including ensuring that your home sale makes sense in the context of your tax and estate planning situation. She helps you future-proof your transition and takes a holistic look at how your home, which is likely your 2nd largest asset, after your 401 (k) portfolio, fits into your retirement picture.
Leveraging Equity in Your Current Home
If you are planning on moving to a cheaper part of the country, you can leverage the equity in your current home by taking out a home equity loan or line of credit. This will give you access to cash that you can use for a down payment or to purchase your new home, before even listing your current home on the market for sale. Once you complete your move, Mareijke and her team will make the home ready, within your stated budget, and expertly market your home for a total market response, sell it, and allow you to net the maximum profits, so that you can pay off the temporary financing previously utilized to buy your next home.
UTILIZING YOUR STOCK PORTFOLIO FOR FINANCING
You can also utilize your stock portfolio as security for a temporary loan. This is known as securities-based lending and can be a good option if you have a large portfolio. This essentially allows you to make a cash purchase on your next home, and the rates on these loans are very low. Once you sell your home, you pay down the securities-based loan, and your stock portfolio remains intact, so you do not lose time in the market.
Departing Resident Loans
Some lenders (very few, and none of the large commercial banks) offer departing resident loans that allow you to qualify for a new purchase loan without counting your first mortgage against you. This is a very low risk creative financing structure offered by a few local lenders that require the right experts to guide you. Mareijke and her team can help connect and advise you.
Consider Bridge Loans as a Last Resort
Lastly, the solution most often recommended by realtors, “apply for a bridge loan”. While this is a viable solution, it is almost by far the most expensive solution and the easiest recommendation to make. I recommend this as a last resort and have historically been able to help my clients avoid this type of loan and saved them thousands of dollars of “carrying cost” in the process.
It’s important to note that buying before selling can require careful strategic planning, and a deep understanding of both the housing market where you are moving to, to understand the timeline for finding a home and also the market you are selling in. With our finance and CPA expertise, our team is uniquely qualified to help you craft a financial strategy that minimizes your risk and creates flexibility as you look to transact. Our team uses best practices in marketing your home to create a total market response that drives maximum profit. We are also expertly skilled in the financial aspects of real estate assets and prioritize your financial well-being in our work together.