Home Buying Season: What You Should Look for When Buying a House in Retirement
Spring doesn’t just bring with it birds, blossoms and warmer weather, it also marks the start of home-buying season. After months of hibernation, Canadians come out in droves to check out the new listings. Whether it is to purchase a second (vacation) home, to downsize or just being part of the buying process for their children or grandchildren who are looking to buy.
What people look for when buying a house in their thirties can be very different from what they look for when they’re retired. So, before you go and hit the open houses, make sure to review these important steps about buying a house for retirees. They could save you money and help you find your perfect home.
When is the best time to buy a home?
In Canada, the real estate industry has cycles. Deciding on when you want to buy is one of the first steps you should decide on before buying a house. Spring months tend to see the largest volume of homes on the market. In summer, with many people away on weekends or on extended vacations, the market slows down a little. The fall brings with it another jump in listings, before winter where the number of available homes drop dramatically.
While winter offers less choice in the number of real estate listings, it does have the advantage of there being fewer people house hunting and so less competition when making an offer (could help you avoid a bidding war). You will also, on average, pay less for a home in winter than in spring.
Nevertheless, spring is when you are more likely to get far greater choice with the range of properties available on the market. According to the CREA, spring months can have three times more listings than winter months, so if having the largest inventory of properties is important to you, spring is the time to be looking.
Buying a house in retirement
There are several reasons people buy homes in retirement and each one brings its own challenges. Some people are looking to buy a place of their own after years of renting. Some may have been able to save diligently over the years and are now looking to purchase a second or vacation property to spend some of their time. Others are looking to move to a smaller home or a cheaper area so they can cash in some of their home’s equity.
Many want to move to be closer to their kids and grandkids. Whatever your reason, it’s important to know that there are several things to look for when buying a house in retirement that you might not have considered when you were younger.
What to consider before buying a house in a new area
There are plenty of questions to ask when buying a house in Canada, especially if you’re moving to a new city or province. Moving away from your established group of friends and family can lead to isolation. So you need to ask, does your new neighbourhood have plenty of social events? Are the locals friendly? Will it be easy to build a new social circle?
An essential step to buying a house in a new city is to spend time there. You could rent an Air BnB or VRBO if there is one available – or a local hotel if that’s more your style. See how easy it is to walk places and what amenities are available. It can also be helpful to strike up conversations with some locals to see what they have to say about the area – you may even make a new friend! If you don’t enjoy spending a week there, it’s probably not the best place for you to move to.
One of the key things to look for when buying a house in retirement is a quiet, safe area. Research the local crime rate and make sure that you are not living in or near noisy student areas. Ideally, you want to be living close to stores and other amenities you need without being on top of them.
Think about your health
Another important issue to consider before buying a house in retirement is your current and future health needs.
If you are thinking of buying a house in a new province, do some research on its health care. Every province in Canada provides different levels of health care and there can be considerable variations in wait times, how patients are treated, primary care and the level of service provided.
An important step you should complete before buying a house in a new province is to talk to other residents who use the health system often. Find out if the level of care will suit your current or future healthcare needs
One of the reasons Ottawa often ranks high in numerous polls of the best places in Canada to retire is its healthcare. It boasts top quality hospitals, a high number of doctors and the shortest wait times in the country.
Wherever you decide to live in Canada, try to be close to a large hospital. Living rurally has its perks, but if it can take over an hour for an ambulance to get you to the emergency room, that could pose a serious problem . Being close to a good hospital also makes life a lot easier if hospital appointments start to build up or if you need to visit a hospitalized spouse.
Thinking ahead when buying a house in retirement
One of the most important steps to buying a house in retirement is to think not only about your current needs but also those of the future. The chances are, you won’t be able to drive forever. Your “buying a house” checklist should include its walkability.
Real estate listings are increasingly adding a walk score to properties; this includes how easy it is to walk to essential services like grocery stores, doctors’ offices, entertainment and restaurants. It also ranks properties on proximity to public transit.
Other steps to buying a house include considering how easy it will be to live in if you develop mobility issues. Most people who buy a house in retirement choose a home on one floor (ranch or bungalow style), with limited or no stairs to negotiate. Adding the criteria of wider doorways is also a good option when thinking about your want and need list, to accommodate future walker or wheelchair needs.
Another concern when buying a house in retirement is the amount of outdoor maintenance needed to keep your home in good shape. While you may love gardening now, what if it becomes hard to kneel or bend over? And do you want to shovel snow from a long driveway?
From a financial point of view, one of the best tips for buying a house in retirement is to find one that has recently been renovated and therefore less likely to land you with a big maintenance bill. You could also look to purchase a condo where most of the maintenance is done for you – for a monthly fee.
The finances of buying a house in retirement
Ideally, when you move into your new home, you’ll be mortgage-free. If you do still have to make mortgage payments, make sure that you’ll be able to cover them if your spouse dies and your income is reduced.
The last thing you want is to have to move out because you can’t make mortgage payments.
Buying a house with a reverse mortgage can free up more retirement income
One way to avoid the stress of making regular mortgage payments is buying a house with a reverse mortgage. Unlike a conventional mortgage, a reverse mortgage doesn’t require regular mortgage payments. This extra money could make a big difference to the quality of your retirement.
Buying a house with a reverse mortgage could also mean that you can afford to make a lower down payment, thus freeing up more cash for other things like investment income or to boost your retirement income.
Another advantage of a reverse mortgage is that you’ll never lose your house because you defaulted on payments (compared to a conventional mortgage). This brings a greater level of security for retirees.
The amount you can borrow with a reverse mortgage will depend on your age, the location and value of the home you are looking to buy and the amount of your down payment.
Call us at 1-866-522-2447 to find out exactly how much you could borrow and see how a reverse mortgage can help you live your retirement on your terms.