Preserving Home Equity Matters More Than Ever To Retire

Do you worry about your retirement? If so, you’re not alone: A 2013 report from the National Institute on Retirement Security finds that 85 percent of Americans are nervous about retirement.

Fewer Americans are Counting on Pensions 

One reason so many people have worries about retirement is that in a changing economy, more and more people are working jobs that do not offer defined benefit pensions where they can expect a steady monthly check. The U.S. Federal Bureau of Labor Statistics reported that the number of private-sector jobs offering pensions has dropped in half in 20 years, with just 18% of private-sector workers currently earning pensions.

In place of pensions, professionals are counting on fixed amounts of money — their own wealth and savings accounts — to retire. Whether or not your job offers a pension, it's a good thing if you have a retirement savings account or 401k, and you’d be wise grow it as much as possible, especially if your employer offers matching contributions. But this is easier said than done. With the average person’s 401k savings at less than $90,000, many analysts are concerned about the choices people will be faced with when they retire.

Home Equity Provides Income for Retirement

To deal with this shift in the way we retire, wealth and assets such as home equity are growing in importance as a financial resource, providing options like reverse mortgages, home equity loans, rental income, or the ability to move to a smaller home to convert surplus equity into cash. Regardless of your retirement plan, it's better to retire as a homeowner without owing on your house or to owe as little as possible, and have your home equity as a valuable resource to live on for peace of mind.

TRELORA’s core mission is to help people grow and preserve home equity when they buy a home or move — which is more important now than ever. With real estate commissions that typically cost about 5.6 percent of a home’s equity value — 2.8 percent for the buyer’s agent, and 2.8 for the seller’s agent — the average homeowner or family spends tens of thousands of dollars on real estate commissions every time they move or buy or sell a rental property. Fortunately, these costs are not set in stone, and homeowners have the right to negotiate a lower commission percentage, or even a flat fee for an agent.  

Know About Commissions to Preserve Equity When You Move 

With so much at stake for your future, it’s important for homeowners to be empowered to talk openly with a real estate professional about all your financial concerns, including commissions. We believe a fair estimate of a real estate agent’s work is a flat fee of $3,000 to list and sell the home, and at least $3,000 offered for a buyer’s agent.

With these flat rates, a seller keeps more money for her or his next home purchase, and a buyer can use the rest of the commission money in the seller’s offer to write a stronger bid or buy down a lower home price. Ultimately, we hope to provide first-rate service while offering homeowners a better deal — whether they're gaining by purchasing more home, staying farther ahead on a mortgage loan, making a rental investment turn profitable sooner, or having more cash in their pockets.

Whether you are a client with TRELORA or you’re using a different real estate agent, we urge you to bring up your needs when you’re searching for an agent, and look for a professional who will consider a flat-rate fee, or negotiate on commissions to help you stay ahead.