If you’re thinking about retirement or have already retired this year, you may be planning your next steps. One of your goals could be selling your house and finding a home that more closely fits your needs.
Fortunately, you may be in a better position to make a move than you realize. Here are a few things to think about when making that decision.
Consider How Long You’ve Been in Your Home
From 1985 to 2008, the average length of time homeowners typically stayed in their homes was only six years. But according to the National Association of Realtors (NAR), that number is rising today, meaning many homeowners are living in their houses even longer (see graph below):
When you live in a home for a significant period of time, it’s natural for you to experience a number of changes in your life while you’re in that house. As those life changes and milestones happen, your needs may change. And if your current home no longer meets them, you may have better options waiting for you.
Consider the Equity You’ve Gained
Additionally, if you’ve been in your home for more than a few years, you’ve likely built up significant equity that can fuel your next move. That’s because the longer you’ve been in your home, the more likely it’s grown in value due to home price appreciation. Data from the Federal Housing Finance Agency (FHFA) illustrates that point (see graph below):
While home price growth varies by state and local area, the national average shows the typical homeowner who’s been in their house for five years saw it increase in value by over 50%. And the average homeowner who’s owned their home for 30 years saw it almost triple in value over that time.
Consider Your Retirement Goals
Whether you’re looking to downsize, relocate to a dream destination, or move so you live closer to loved ones, that equity can help you achieve your homeownership goals. NAR shares that for recent home sellers, the primary reason to move was to be closer to loved ones. Plus, retirement played a large role for those moving greater distances.
Whatever your home goals are, a trusted real estate advisor can work with you to find the best option. They’ll help you sell your current house and guide you as you buy the home that’s right for you and your lifestyle today.
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Should I Sell My Home in Kalamazoo When I Retire?
Depending on how dire the financial situation is for retirement, there are many reasons to put your home up for sale. Often, the sales process starts by listing your house. Then, you have several options, such as downsizing, moving in with family, purchasing a smaller house, moving to a lower cost of living area, or going as a renter. Whenever you decide to sell your home, your potential benefits include:
You’ll Receive an Influx of Funds
Many people are compelled to further their career with insufficient savings on account of their investments. If you own a home outright or have substantial equity in it, selling might generate the funds your retirement accounts require.
You’ll Shed Your Mortgage
If you sell your home, you will have to extinguish the remaining debt on your debt to the institution. Even though this will eat so faral income from the deal, you will be in a much better long-term financial situation.
You’ll Receive a Tax Break
Retirement-aged homeowners are anxious about selling their homes because they do not understand the tax consequences of their actions. Luckily, there are a number of favorable tax laws that protect their tax obligation that typically limit the amount that is owed.
There are some rules in place for who can and cannot take this exemption from sales tax. In general, you’ll need to have lived in your home for two years before the date you’re selling it. You can only take this exemption once every two years.
You Eliminate Maintenance Costs
Some retirees get worried they’re likely to consider not being able to cover crisis expenses. As a result, it may involve repairing a roof, replacing a broken water heater, or handling a mold infestation. It’s challenging to plan for these expenditures, and there are some people who might not be able to pay for it whatsoever with scarce retirement income.