Exit Finance

What options are there for hard to finance people like the elderly, self employed or low or no income sellers with some equity in the property to finance the sale for maximum value? ie: small short term borrow to repair, tidy, present the home for best sale price. For example, say average house value of 500K with 50% equity and repair bills of 50K

 

I’d get some advice from a vendors advocate. It might be in that particular market there’s no need for Reno’s. Developer target, or dinks looking for their next canvass to paint on.

Super, reverse mortgages are two finance options that come to mind, but estate agents and vendors advocates might know of specific finance options that arent secured by a mortgage that are easier to access. Trade terms etc that are capitalised and repaid on sale for instance.

 

Who do you currently bank with?
Couple options I've dealt with similar plans...
- Equity Unlock for Seniors (if of age)
- Bridging Finance

 

Great info tobe,

I've seen lots of options and info to assist buyers, however seller info seems harder to find. Even banks seem uninterested in the exit strategy. I guess that's why sellable.com.au managed to get such huge backing. Clearly they saw a problem that needed solving because some people can't or just don't want to deal with the hassle of the sales process.
I do find that slightly weird though, surely real estate is a 2 part process, buy & sell. Even buy & hold investors would need to sell occasionally.

 

I'd talk to a few agents and ask them for advice on low cost ways to help present the property. You might just need to spend a few hundred. Other than that, talk to your bank.

 

It does seem like talking to REAs and Sellers Advocates (which I'd never heard of before) is great advice, I'm just kind of surprised there's no standard or packaged plans for this type of thing. Bridging finance has been around for ages, but I thought that was only for bridging the gap between the purchase of a new place and the sale of the old one. What about for the people who want to rent for a while before buying something else, or for the people who want out of the RE market altogether, or people who can longer work etc?

 

I've done bridging for those who have exited the REA market and gone into care facility.
Funds were provided to cover renovation costs, along with 12months holding costs, based on the debt being fully repaid within 12months.
Note this was only done because it was an existing customer, these types of transactions usually end up costing the bank.
Also wont find many brokers wanting to assist with bridging unless you're paying them fee for service, which you wouldn't need to pay direct.

 

Balance transfer credit card ?

Not sure how easy they are to qualify for - but we used that when the cashflow got tight on a place we did up for sale (spent a lot more than $50K on it - but was really worth it).

 

Is this because the regulations with consumer finance are now so tight or simply because there's no money in it for them. I understand banks not being interested, they're losing a long term earner after all. Is it different for non coded loans for businesses?

 

Sorry if I'm sounding vague, I just thought it would be better for the forum and other readers if my questions were more general in nature so the responses could be more helpful to a greater range of people. I also thought (obviously unrealistically) that questions about finance would be bombarded by brokers. Clearly this community has way more restraint, or I've just made them wary with my vague questions.

 

Pending which bank you're with your existing bank might assist, given you have an existing relationship with them.

 

Savings? I do believe it is possible for people to get credit to pay for renovations where they have the ability to pay e.g. working. Probably lenders are knocking back due to concerns about payment in this case.

 

In my case I feel that a sale without improvements is probably best, easiest, quickest, however I do want to explore and calculate all the available options so I can feel better about my decisions. But I thought this would be a good problem to explore for other people in a similar situation. I typed in caveat loan into the search and got very few results, same for the sellable startup website and same for exit finance. I just thought that was a little weird for such an active forum, maybe I'm missing something? Also, many people don't have incomes, or savings etc, ie: asset rich, cash poor.

 

No. It's just difficult for people to get a loan without an ability to pay. Expect that to get worse. If on Centrelink you can get a cash advance or a No Interest Loan for necessities (this does not meet the criteria).

If asset rich and cash poor, you can sell the asset.

 

After the gfc the feds banned exit fees from mortgages. Banks started to charge brokers clawback, where if the loan is repaid within the first couple of years the commission is clawed back.

This scenario would likely get clawed back.

And in all fairness short term finance needs aren’t suitable for a 30 year mortgage.

 

Maybe I should have posted in a thread called Exit Strategies rather than Exit Finance, however after reading quite a few posts there seems to be only one exit strategy, present the property as best as you can and price it to attract as many offers as you can. It may seem obvious to some to simply SELL the property, however if you've never done this before, it can be daunting. I'm not begging for money here, I'm just asking for info about options that's all. Sorry if I wasn't clearer. And no, I'm not on centrelink and yes, I have not had an income for quite a while now. However not everybody is the same and situations and circumstances can vary greatly. I just don't think that is unusual and might be much more common than you think.

 

Unfortunately I think this is going to become more common. If you can hold onto your house by accessing Centrelink or super then that's something I would investigate.

 

Do you work for a newly launched website company that is seeking to encourage people to sell their homes through it?

 

LOLs... No but probably sounds a bit like it though, however because I'm time and cash poor, I am seriously thinking about hearing them out and seeing what they offer. And I'd be happy to share my experiences with everyone in here later, good and bad. I'm also going to try @tobe advice and see if I can get some trade terms through the business.