How to Sell Your Home Without Moving
Retired senior citizens who are seeking more cash (or less financial burdens) to improve their lifestyle while remaining in their home, have until now had few options – many, therefore, considered reverse mortgages. Now, however, a new method originating in Europe has entered the American market. Though not yet available in Florida, it provides an interesting option for folks in this category.
For example, twenty or twenty-five years into their mortgage, many retirees are cash poor but equity rich. A new company, Irene, which recently launched in New Jersey will offer to purchase homes from seniors with the stipulation that the sellers may stay in their home, if they wish, for the rest of their lives. Upon their passing, Irene will gain ownership of the home. As an added benefit to the sellers, Irene assumes all responsibility for mortgage payments, property taxes, and home maintenance costs.
According to Fabrio Tiso, founder and CEO of Irene, “Over 80% of older adults own their homes. While they often don’t have a lot of cash on hand, they have a lot of savings in their home.” Tiso set about figuring out how he could develop a profitable business model while, “Leveraging their [seniors] largest asset to plan for retirement in the way they want to retire, which is in their home, in an affordable way.”
Irene raised 1.3 million in a funding round. Jesse Beyroutey, a partner in IA Ventures which led the round added that, “Seniors deserve to live out their retirement in the homes they own. Irene guarantees that staying at home is affordable for any homeowner.”
Alternately, if a seller chooses to move out of their home, whether to an assisted living facility, or for any other reason, they are free to rent it out and receive all the rental income for the rest of their lives.
While the company chose New Jersey as the first state to launch operations due to high property taxes, the second state they plan to begin operations in is Florida, due to the large population of seniors.
Irene has its own real estate agents working in house. But the company is hoping to work closely with agents through referrals. If, for example, Irene meets a client who wants to leave his home, they’ll refer the client to an agent, and alternately, if an agent encounters an older client who doesn’t want to move although he’s having trouble affording his lifestyle, the agent can introduce the client to Irene.
Since this concept is new to the United States (3 months old) it would probably be wise to see how it develops before jumping in. It does, however, seem to offer a new tool for a certain sector of the market, and is therefore worth monitoring.