Tag Archive for: Homewowner

Home prices have been on a tear lately, rising 18% in just the last year.

It has homeowners sitting on unprecedented amounts of equity — about $8.1 trillion of it, in fact. According to Black Knight, the average homeowner gained 11% in tappable equity during just the first quarter of this year.

Though homeowners of all ages can leverage this equity and sell for big profits, it’s baby boomers like Patti and Mike who are uniquely poised for gains. These homeowners have often lived in their homes for decades and, in many cases, paid off their mortgages completely.

“Every single friend of mine, all of their parents are calling me, asking ‘Dana, what should we do?’” says Dana Bull, a real estate agent with Sagan Harborside Sotheby’s International Realty in Marblehead, Massachusetts. “They know they’ve got a unique opportunity where their properties have appreciated so much to a point that they never even thought possible in their lifetime.”

Are you a baby boomer wondering how to best use your rising home equity? Here are your options.

Selling is likely first to mind for many older homeowners. According to ATTOM Data Solutions, the average home seller makes a whopping $94,500 in profits these days — up more than $34,000 since just last year.

Those profits can help boomers achieve any number of financial goals, from padding their nest eggs or making investments to buying a new house or even retiring early.

“This age is a sweet spot because they’re starting to think about retirement and getting a certain dollar amount in the sale of their home can expedite their retirement,” Bull says. “It can bring them to that next chapter in life and give them financial cushioning that they never thought possible.”

According to a survey from Realtor.com, around 12% of baby boomers plan to sell their homes in the next year — a larger share than any other generation surveyed. Many of those sellers will choose to rent, opting for lower-maintenance apartments or townhomes. Others will buy but downsize, like Patti and Mike, or use the funds to move closer to grandkids or to sunnier locales.

If you choose to buy, agents say proceed with caution: By going this route, you’ll face the same high prices you just capitalized on. Supply is also limited in most housing markets, so you may find yourself with few homes to choose from — not to mention some stiff competition.

“This is a smart time for older homeowners to sell their home — but only if they have a clear plan of where they are going,” says Glenn Phillips, CEO at Lake Homes Realty in Hoover, Alabama. “The challenge is that, while they may get a premium for their current home, they will also pay a premium for their next home while also facing very limited choices. To sell fast without a clear plan could end up being costly over the long term.”

Another option is to rent in a 55-and-up, senior or independent living community. For those not wanting a long-term commitment, options like Brightview — a resort-style senior living community with locations across the East Coast — allow you to stay on a month-by-month basis.

“We know life can change in an instant,” says Denise Manifold, vice president of sales at the company.

Turn your equity into cash — without selling

Selling your house isn’t the only way to capitalize on the hot housing market. You can also tap your equity using financial products like home equity loans, home equity lines of credit (HELOCs) or a cash-out refinance.

These allow you to turn a portion of your equity into cash, which you can then use for virtually anything — medical bills, paying off debts or even aging-in-place renovations on your property.

Going this route also allows you to avoid the potential taxes you’d face on your home sale. For married couples, you’ll pay capital gains taxes on any profits over $500,000. For single homeowners, the threshold is just $250,000.

“Tapping into your home equity for necessary or unexpected expenses can be a great way to create short-term liquidity without having to sell your investments and realize a capital gain or loss,” says Gabrielle Clemens, an accredited estate planner and managing director at Clemens Private Wealth Management in Boston.

“You can use the funds to pay off high-interest credit card debt, remodel your home with features to help you age in place, delay filing for Social Security until you qualify for a higher benefit, buy long-term care insurance, help grandchildren with college tuition or pay the tax bill,” she says.

Still, while useful, home equity loans, HELOCs and refinances all require a monthly payment, something retirees — or anyone on a limited income, for that matter — might be hesitant to take on. If a payment sounds unappealing in your case, you can also look at options like a reverse mortgage or equity-sharing agreement.

With equity sharing, you essentially sell off a portion of your home’s equity, getting a lump sum in return. According to Rachel Keohan, head of marketing at equity-sharing company Hometap, it’s “a great option for accessing their home equity for a variety of uses without taking on debt.” Companies like Hometap gets paid a percentage of profits when the home eventually sells.

Consider a reverse mortgage — but take care

Reverse mortgages may be another route to consider — at least if you’re 62 or older. These work like a mortgage loan, only backward. With these loans, the lender pays you — often monthly, and then collects the total balance plus interest once you die or sell the house.

According to Steve Resch, vice president of retirement strategies at Finance America Reverse, now is a particularly good time to get a reverse mortgage if it suits your goals.

“The proceeds that you can get from a reverse mortgage is determined by the homeowner’s age, the value of the property and the interest rates,” Resch says. “So, we’ve got record-high home values and record-low interest rates, which means a borrower can really get a tremendous amount of money — much more so than they could just a couple of years ago.”

You can also use a reverse mortgage to buy a new house entirely, something Joshua Ezell, a real estate broker with Breakthrough Real Estate & Property Management in Phoenix, often recommends to his clients.

“Utilizing a reverse mortgage allows a buyer to purchase a nicer or larger home and keep more money in the bank,” Ezell says. “It also has the added benefit of also not having a house payment.”

If you do opt for a reverse mortgage, be careful about how you structure your payments, as there are many choices. You want to avoid running out of proceeds too early. You’ll also need to continue covering property taxes, insurance and other costs, or risk losing the home to foreclosure. Talk to a financial advisor if you’re considering a reverse mortgage of any kind. They can walk you through the full implications and risks of these products, as well as how one may impact your retirement goals.

The time is now

Whatever you decide to do, experts say you should make your move fast. Recent data shows for-sale inventory is rising (at least slightly), and when you throw in slowing demand from burned-out buyers, it seems the red-hot market may soon be cooling off.

“We are seeing people accelerate their plans to take advantage of the market,” says Rick Ruvin, a partner at Falk Ruvin Gallagher Real Estate in Whitefish Bay, Wisconsin. “In many markets, sanity is returning, and the level of competition is softening. Prices tend to rise, plateau and then fall. Many are sensing we are headed into a plateau phase.”

Keep reading.

If there is a home that you would like more information about, if you are considering selling a property, or if you have questions about the housing market in your neighborhood, please reach out. We’re here to help.

With the new decade comes new kitchen and bath trends that are popping up all over the internet! Will you be bold enough to try some of these trends in your own home or keep them safely tucked away on your pin board? Either way you can incorporate some of these trends without breaking the bank!

Kitchen Trends

Warm Wood Grains


Wood surfaces bring warmth and natural beauty to any space, and the material has taken a leading role in kitchens. Warm wood tones balance a crisp white kitchen and enhance deep green and blue toned cabinets which are another popular trend this year. Natural finishes pair well with a variety of styles, including contemporary cabinetry and traditional countertops. If a kitchen update isn’t in your budget this year consider adding decorative wood bowls or a nice wood butcher block to your counter tops with cute kitchen accessories sitting on top. Adding wood chairs to your island will warm the space as well.

Bold Cabinet Colors

Looking for something unique that shows your personality or provides a bold statement? A different color of paint on your cabinets can make all the difference and separate you from the pack. Not ready to go bold in your entire kitchen? Maybe start with your kitchen island or bottom cabinets!

Open Shelving

Looking for a way to give your kitchen a modern design? Try open shelving. Open shelving is a great alternative for those hard-to-reach cupboards. Turn them into an eye-catching spot by displaying a beautiful piece of art. If you don’t want to commit all the way, try open frame cabinetry. You can still show off your prized items through glass panes without scrapping the cabinetry altogether.

Bathroom Trends

Bold Tile Patterns

While deciding on the tiles for your bathroom don’t shy away from experimenting. The use of clashing tile that are different in texture and colors might just end up giving your bathroom a timeless yet chic look. To keep your project budget friendly, consider doing just one wall in your bathroom with tile to get the same bold look without blowing your budget.

Floating Vanities

Floating vanities are one of the hippest trends right now. Homeowners can choose from various floating vanities including many different types of wood. These vanities appear airy and seamless, making them perfect for any bathroom. Floating vanities don’t have to cost a fortune. There are many budget friendly options available at your local hardware store, Ikea and even DIY options!

Brass Finishes

House Beautiful

Brass finishes are a great way to add a little luxe to your life. Replacing outdated old fixtures with brass fixtures can be an easy and inexpensive way to update any bathroom.

Smart-home technology offers entertainment, convenience, and peace of mind, but did you know that it can help lower energy bills and save homeowners money? These 5 smart home items are meant to help renters and homeowners alike save on their energy bills each month. It’s a win-win for both our wallets and the environment.

Nest Learning 3rd Generation Thermostat

Nest’s Learning Thermostat is a WiFi-enabled device that can automatically adjust heating and cooling settings for optimal performance — meaning it’s constantly making sure you’re saving energy. You can also change the temperature through the Nest app, or with your voice through your home assistant (Ok, Google, can you turn the heat up to 74?).

Studies have shown that homes with a Nest saved an average of 10-12% on heating, and 15% on cooling, with average savings ranging around $140 per year. This means that within two years of installing it, the Nest Thermostat literally pays for itself — it’s a surefire way to make sure you’re both doing something good for the environment and have lower bills every month.

Lutron Caseta Wireless Home Automation Smart Kit (light dimmers)

No one likes coming home at night to a pitch-black house. But, this kit allows you to turn on your lights from your phone — which also eliminates the need to set timers! It also has a light dimmer, which allows you to control the brightness of up to 17 light bulbs. Bonus: it takes less than 15 minutes to install, and is so easy that you can do it on your own!

Samsung SmartThins 120-Volt White Smart Plug

This smart plug, which works with a SmartThings hub or compatible devices with SmartThing hub functionality, will let you say goodbye to second guessing whether or not you turned off appliances, because it lets you control outlets from your phone.

Making something in a slow cooker, but won’t be home in time to turn it off? No biggie, just do it from your phone! The best part? If a light or electronic is left on, it sends a notification to your phone to notify you to turn it off.

If switching out the light switches with the Lutron Caseta is more than you’d like to take on, this is the perfect alternative (especially for renters!) so you can control lights when you aren’t home. It’s an amazing option for people who travel a lot or get home late. You may also love the Smart Plug as an alternative for controlling holiday twinkle lights so you don’t have to crawl under the tree or mess with timers.

Don’t have a SmartThings hub? No sweat! There is a range of smart plugs that are compatible with everything, and even a smart plug that doesn’t require a hub!

Samsung SmartThings ADT White Indoor Flood Sensor

Flooding can be a huge fear; pipes can burst or get clogged, and damage can be happening within your walls without you being aware of it.  This flood sensor can eliminate all your fears of flooding by sensing water leaks, which alerts you when pools of water form under your pipes. It’s perfect for any moisture-rich spot in your home, like your basement or under a sink. Plus, it’s small and sleek design makes it easy to tuck away, out of sight, out of mind.

Rachio 16-Station Wi-Fi Compatible Irrigation Timer

If you classify as a homeowner with an abundant amount of yard space, this one’s for you! This timer for your sprinkler system is controllable by your phone and tablets, and automatically adjusts to the weather, based on your local weather forecast, so no more are the days of worrying if you’re over or underwatering your plants or yard. Did we mention you can save up to 50% of your outdoor water use? Meaning you can save water AND money at the same time.

Article courtesy of The Everygirl