Discover how to sell your home while still residing in it. Learn about innovative solutions to help navigate the process.
Selling your home can mean tapping into hundreds of thousands of dollars in valuable home equity, but it also means parting ways with a familiar, comfortable environment. For this reason, many homeowners want the best of both worlds –– they wonder if there’s a way to sell their house and still live in it.
Rather than a traditional sale, a sell and stay transaction allows homeowners to continue living in their homes as renters after selling. This alternative to selling has become an increasingly popular option for homeowners across the US. But is it right for you?
Below, we examine the benefits of sell and stay transactions as well as some key considerations should you choose to go down this path.
Selling your house yet retaining the ability to live in it as a renter may seem counterintuitive. But once you wrap your head around this concept, you’ll recognize that there are many benefits to this approach.
Primarily, a sell and stay transaction provides a solution for homeowners who want (or need) to unlock the equity in their home without moving out. This can be particularly appealing for older adults looking to fund their retirement while aging in place, homeowners facing financial hardships in this difficult economy who don't want to completely uproot their lives, or anyone looking for financial freedom with some added familiarity. This is also the ideal solution for movers asking where to live between selling and buying since you could live in your old home while looking for a new one. Or, you can use your home equity to buy another house once you’re ready.
In many ways, living in your home as a renter after selling can mean enjoying all the best parts of homeownership without any of the downsides. While sell and stay transaction arrangements will vary, Truehold’s sell and stay transaction lets homeowners live in their homes as long as they continue to pay monthly rent and comply with the lease agreement. During this time, we take care of property taxes, property insurance, and essential repairs–– allowing you to enjoy the carefree lifestyle you’ve earned.
There are many financial and legal factors to consider when selling your home, and the same is true with a sell and stay transaction. Given the myriad benefits, a sell and stay transaction can be an excellent way to sell your home and continue living in it as a renter–– to have your cake and eat it, too. But before you pursue this option, consider both the legal and financial aspects to ensure that it aligns with your long-term interests.
sell and stay transactions are uncharted territory for many homeowners. Skilled real estate professionals can act as both navigators and translators, helping anyone contemplating this path better understand the complex legal and financial landscape.
Some real estate agents may be as unfamiliar with sell and stay transaction as you, so finding an agent who knows the ins and outs will be helpful. A knowledgeable agent can provide invaluable assistance through every step of the process, from setting a competitive price for the sale to negotiating lease terms that safeguard your interests. We at Truehold understand the important role local real estate agents play in the sell and stay transaction and have therefore built a national network of agents to support our homeowners. If you have a real estate agent who isn’t a Truehold partner, we are happy to discuss your options with them.
In addition to real estate experts, legal and financial advisors can be instrumental in entering a sell and stay transaction that fits your needs. A lawyer, on the one hand, can help review and negotiate the agreement, making sure it aligns with your interests while keeping you up to speed. Meanwhile, a financial advisor can offer advice on the tax implications of the sale and help you understand how it fits into your broader financial planning picture. Together with a real estate expert, these professionals can make you feel fully confident in your decision.
A sell and stay transaction is the only common way to outright sell your home and then stay in it, but some options offer some of the same benefits. If a sell and stay transaction doesn't yet seem like the right fit, consider these alternatives:
Reverse mortgages allow homeowners 62 and older to convert part of their home equity into cash while they continue living in the home. When the home is sold, or when the homeowner passes away, any money borrowed is due with interest, making reverse mortgages a potentially costly way to access home equity.
Like a reverse mortgage, a home equity line of credit (HELOC) lets homeowners borrow from the equity they have accrued. HELOCs, however, function more like a credit card than a reverse mortgage –– homeowners “draw” from their home equity during a given period, then pay it back when this period ends. During the draw period, you generally only pay the interest accrued on your equity. But when this period ends, you’re on the hook for the principal amount plus interest (at a variable interest rate, no less).
In a cash-out refinance, homeowners replace their current mortgage with a new, larger one, pocketing the difference in cash. Some of this cash may be absorbed by closing costs, however, and cash-out refinances also generally come with higher interest rates –– compared to a regular refinance, a cash-out refinance could saddle you with a worse rate than before.
Each of these options allows you to access your home equity while still living in your home. But given the risks of reverse mortgages, the unpredictability of HELOCs, and the added expenses of a cash-out refinance, a sell and stay transaction could be your best path forward when it comes to flexibility, predictability, and cost.
Let’s say you’ve seen the alternatives and found that, for your needs, a sell and stay transaction could be the best way to sell your house and still live in it. While a traditional sale can mean jumping through some serious hoops in preparation, selling your home with a sell and stay transaction is a less laborious process. For one, there’s no need to stage and list your home, which can be costly, time-consuming, and get in the way of everyday comfort. You can tackle a remodel to make your living space more comfortable, but you don’t need to –– the team at Truehold will use the home’s appraisal and inspection to determine a price and identify any necessary repairs.
In addition to avoiding the stresses of a traditional sale, our streamlined process means you can tap into your home’s value quicker –– and begin to leverage your home equity however you see fit.
Selling your home and continuing to live in it can make for a more comfortable retirement, a flexible move, or financially free day-to-day. No matter your motivation, Truehold’s sell and stay transaction makes it easy to get the most out of your home.
If you’re ready to get the process started, connect with one of our Truehold representatives today –– you’ll get an offer on your home within 48 hours, your home equity in as little as 30 days, and a familiar, flexible living situation.
Sources:
1. Federal Trade Commission. Reverse Mortgages. https://consumer.ftc.gov/articles/reverse-mortgages
2. Nerdwallet. What Is a Home Equity Line of Credit, or HELOC? https://www.nerdwallet.com/article/mortgages/heloc-home-equity-line-of-credit
3. Bankrate. Are cash-out refinance rates higher? How to get the best rate. https://www.bankrate.com/mortgages/how-to-get-the-best-cash-out-refinance-rate/
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