Reverse Mortgage, Trick or Treat?

By
Real Estate Agent with Re/Max Premier Realty, Inc.

I attended a seminar last week that I thought was a total waste of time. It was a class on how to work with buyers on short sales, and there was nothing new.

However, one of the sponsors was a large bank touting how to make sales with seniors using reverse mortgages to buy a home. I still didn't think it was a big deal. The very next day, I had one of my sellers want to see a  home that was on the market, and we didn't have a contract on his home yet. He was also reluctant to lower his price, so at first I was thinking this was a total waste of time. You know the drill.

Before I showed the home, I had both husband and wife in for a consultation to try and find a solution to get him to lower the price and get his home sold so he could buy. He knew what price home he wanted to buy and was convinced he had to get that money out of the sale of his home, which I knew wasn't going to happen,

I got them on the phone with the reverse mortgage lender and by asking their ages, he determined that they could buy a home for $180,000 with only $89,000 cash. They would never have to make a payment. So instead of needing $180,000 net from the sale of their home, they now only needed $89,000. He could now reduce his price on the home he was selling, get it sold and buy the home he wanted for less than half the price. Talk about changing the playing field!

This couple lived pretty far out of town and really needed to get close in so the wife could get the medical treatment she needed. The new home would also be much easier to maintain. My waste of time seminar wasn't a waste of time anymore. I learned something completely by accident that helped me make  2 sales for a lovely couple who really needed my help.

I have been in this crazy business for almost 25 years and I am still learing new ways to get things done. These reverse mortages can solve a lot of problems and help you make sales you thought were impossible. I am not a loan officer, but I am sold on this product for some.

Does anyone else have any stories, good or bad, about reverse mortgages? It sure worked well for my clients.

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Re-Blogged 2 times:

Re-Blogged By Re-Blogged At
  1. Jim Frimmer 12/03/2009 02:48 AM
  2. Christine Hynes 12/03/2009 04:11 AM
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Rainer
104,986
Craig Richardson
National Realty - McLean, VA

This is very timely, thanks.  I know many are reluctant to go the reverse mortgage route, particularly if they have heirs, but these days all bets are off.

Oct 30, 2009 10:32 PM #1
Rainer
23,227
Nancy Deichman
Re/Max Premier Realty, Inc. - Ocala, FL
CDPE

Thanks for your comment. Yes the world is a different place these days and many seniors are in a pickle.

Oct 30, 2009 11:20 PM #2
Ambassador
2,004,541
Fernando Herboso - Broker for Maxus Realty Group
Maxus Realty Group - Broker 301-246-0001 - Gaithersburg, MD
301-246-0001 Serving Maryland, DC and Northern VA

they seemed to start gaining popularity these days. . 

Oct 31, 2009 12:52 AM #3
Rainmaker
1,383,827
Michael Setunsky
Woodbridge, VA
Your Commercial Real Estate Link to Northern VA

Nancy I've heard pros and cons about reverse mortgages, but I can see in this situation where it helped your clients. Something to think about. Thanks.

Oct 31, 2009 12:57 AM #4
Rainer
23,227
Nancy Deichman
Re/Max Premier Realty, Inc. - Ocala, FL
CDPE

Fernnando, Thanks for your comment.

Michael, I am seeing more ways than ever that they can help seniors.

Oct 31, 2009 01:27 AM #5
Rainer
120,838
Ronald Gillis
Southwest Florida Notaries (Mortgage Notary Signing Agent) - Port Charlotte, FL
CNSA Southwest Florida. Notaries, Port Charlotte, 941-7-NOTARY

I don't have specific examples, but know from the experience of closing over 500 reverse mortgages over the last several years, when understood, the benefits from reverse mortgages can tremendous.  It is nice for a change to see an undecided perspective such as yours, see that there can be some good.  Like many have said here and elsewhere, reverse mortgages are not for everyone, nor right for every situation, but armed with the CORRECT facts about reverse mortgages, they have the potential to make a tremendously big positive effect on many peoples lives!  In more than one case, I have seen seniors, because of the reverse mortgages, get better food and medicine or medical care such as what you mentioned.

Oct 31, 2009 09:41 PM #6
Rainer
23,227
Nancy Deichman
Re/Max Premier Realty, Inc. - Ocala, FL
CDPE

THank you so much for your comment. We may not realize what an impact we can have on another person's llife in the career path that we choose. We think we are here to list and sell real estate, but you have reminded me that what we really do or don't do, know or don't know can help change someone else's quality of life tremendously.

Oct 31, 2009 10:11 PM #7
Rainer
16,557
Nelson Acosta
Ocala, FL

The Golden Rule.  Do unto others as you would have done unto you. This is great.

Nov 02, 2009 12:34 AM #8
Rainmaker
1,036,603
Kathy Clulow
RE/MAX All-Stars Realty Inc. Brokerage - Uxbridge, ON
Trusted For Experience - Respected For Results

Nancy - While I have not been involved in a purchase that had a reverse mortgage involved they have been around here in Canada for several years. They are promoted as a way for an elderly couple/individual to stay in their home and have funds to live on, maintain the home or just to enjoy.

Nov 08, 2009 02:59 PM #9
Rainer
26,939
Theodora Wu
TJ Investments - Burien, WA

This does sound like one of the situations were a reverse mortgage my be beneficial.  Most of the time I believe these are unwise.

Nov 14, 2009 05:46 PM #10
Rainer
23,227
Nancy Deichman
Re/Max Premier Realty, Inc. - Ocala, FL
CDPE

I used to think they were unwise too, but I am seeing more and more situations where senior citizens really need them. They are FHA insured loans. I guess there are a lot of pros and cons. Wells Fargo is doing them so they must be going mainstream. I think they might be safer than the old ones that first came on the market.

Thanks for your comment.

Nov 14, 2009 10:05 PM #11
Rainer
478,183
Not a real person
San Diego, CA

Very interesting, Nancy, and bravo to you for finding a great solution! I know someone who will be here shortly to reblog your post.

Happy December!

Dec 03, 2009 02:41 AM #12
Rainmaker
1,116,516
Jim Frimmer
HomeSmart Realty West - San Diego, CA
Realtor & CDPE, Mission Valley specialist

Hey, Nancy - Russel Ray sent me over here to read your post and possibly to reblog it, which I did. Thanks for a very helpful post.

Dec 03, 2009 02:51 AM #13
Rainer
89,841
Christine Hynes
American Capital Corporation - Laguna Beach, CA
Orange County Senior Loan Consultant

Nancy-

Great tip!  I am also reblogging it as I saw it on Jim's site today!  Way to go!  Thanks again!

Dec 03, 2009 04:13 AM #14
Rainer
225,344
Dave Sullivan
Real Estate One - Birmingham, MI
Michigan Realtor with an investor viewpoint

Excellent information I will forward it if that is ok? thank you!!!

Nov 18, 2012 06:09 AM #15
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Nancy Deichman

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