A listing agent I trust has a client with a reverse mortgage. A 98 year old client with a home anchoring her in rising water. She needs to be in assisted living, but she won't leave her house until it sells.
With bright eyes and a smile she welcomes buyers to her home. The conditions inside are awful, but in an understandable way. She has lost the ability to clean and cook for herself and the house reflects both her past life's glories and her restricted present. The beautiful woman in the World War II era photos wouldn't recognize the squalor she is living in today. She's still of reasonably sound mind, but is stubborn about leaving her house. Nobody wants to force her against her will, but everyone involved is concerned about her well being.
Her biggest fortune these days is having a great listing agent who cares for her, but there are other people including an attorney and some guardians who are looking out for her interests. I am bringing buyers who are also solicitous of her needs. They are a wonderful couple with teeanagers who have been looking with me for years for a perfect parcel. When I hear about this listing's acreage and aspect, I bring them by to tour. They see through the crud and clutter and appreciate the fine structural condition of the house, and the property is a good fit.
They prepare an offer at a fair price, but find that the reverse mortgage in place eats all of the potential profit for the seller who won't budge without cash in hand. With any other seller, we would play hardball and stress the market value of our offer. Instead, with the pleading and cooperation of all parties, we up the offer to where the seller can pocket some cash. We don't know if it will be enough cash to pry her gently from the suffocating embrace of her living situation, but we'll find out soon.
Unfortunately for all of us, her fallback solution is to stay in the home until she dies. The reverse mortgage can't result in her being evicted, but in this case, it has trapped her by continually eroding any equity she had in the house. It's not wrong, and she did have the benefit of the reverse mortgage, but this final price is hard to bear. I think this will have a happy ending since all parties want the same final result and my buyers are prepared to do their part, but the reverse mortgage has complicated an already tough situation. Every month she waits to accept an offer makes it harder for a fair market transaction to generate any profit for her.
I'd be happy to be as spry and witty at 98 as this seller. I'm just sad to see that a better living situation for her is proving to be so hard to arrange. I am sure she was promised that she could stay in her house until she died. She probably didn't bargain for how unhelpful that could be.
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