Questions about funding CCRC entrance fee with sale of house

[Maximus]

We have initiated research into transitioning into a CCRC. Our house is free and clear and its sale will allow us to fund the full entrance fee. How do you coordinate being on an entry list with the sale of your house once you get the call. Do you take a heloc, get a bridge loan? Homes in our neighborhood sell very quickly. Sometimes days to one week. Ideas please.

 

[COcheesehead]

How much time do you have to close once you are offered a property?

 

[Maximus]

Not sure about the time allowed. Will take a tour of two facilities tomorrow. Perhaps they will have ideas. Was wondering if other people on here have encountered the same issue. Have heard the wait list can be 2–4 years. Just want to be prepared if the call comes earlier.

 

[COcheesehead]

Not sure about the time allowed. Will take a tour of two facilities tomorrow. Perhaps they will have ideas. Was wondering if other people on here have encountered the same issue. Have heard the wait list can be 2–4 years. Just want to be prepared if the call comes earlier.

It’s a common issue for anyone timing the purchase with a sale of a current home. There are some other threads that discuss it.

 

[bada bing]

We moved my mom into a CCRC 10 years ago. The sale of her house was no issue because the CCRC had policies in place with some time allowance for house sale. It's a common problem. Ask the representative of the facility how they handle it and what their policies are.

You'll have to pass an entrance exam for both medical and financial. They will know all about your financial status including your housing equity prior to being approved.

 

[harllee]

The lag time at my CCRC for your unit to be ready is about 4 months for renovation etc after you pass the financial, health and cognitive tests. As soon as we knew we were accepted for our unit we put our house on the market. Of course it then sold for a high price immediately and our apartment in the CCRC was not ready. The buyers of our house wanted quick possession. So we put all our stuff in storage and then traveled for 4 months. Not a bad way to do it.

 

[KB]

I just moved into a CCRC and sold some investments to pay for the admission fee. My house is now on the market and I will invest the proceeds back into my previous investments. MY time from submitting my paperwork to having a place for me to move to was less than 30 days. It took me 6 weeks to move into the new place and my house just went on the market today.

 

[camfused]

So, what happens when you reach the front of the queue, you look at the apartment being offered, but don’t like it (for whatever reason)? Do you stay at the front of the queue, go back a few slots, get kicked out

 

[KB]

I found that rejecting an offer kept me at the same spot in the queue. i was new on the list, but all the others did not want the house at the time it was offered. It was over the holiday season. The CCRC where I moved does not penailize you for not accepting a spot. I have read that some only allow you to reject a spot 3 times before you go to the back of the queue. You should look into the guidelines for the CCRC where you are looking to live.

 

[planuntilthefisthits]

OP, we were told that we were close to being at the top of the list for our desired unit, so we are following this plan for our CCRC move:

1. Arrange Securities Backed Line of Credit (SBLOC) with Fidelity/US Bank. This will give us the opportunity to get a rapid "loan" at a reasonable rate. When taking out this line of credit, were were not sure whether our home would be sold or not, and even if sold, the line of credit would allow us flex room without having to sell our securities and incurring taxable events.

2. Arrange for temporary living quarters. We found a flexible rental situation through a friend's vacation home. We wanted to have this available for us in case our home sale happened before our CCRC entrance happened.

3. Sell Home. We asked several neighbors if they wanted to buy our home. Sold it without a realtor.

Lots of other sub-steps, but those were the major ones for us.

It took a lot of time to de-clutter our place after over 30 years of being in the home. Lots of trips to Goodwill, shredder provider, and the local dump. Then making the house presentable for showing to our interested neighbors.

We started the process in June, reached a sales agreement in October, and the closing was in December. We moved out of home into our temporary quarters in December, just before closing.

Long and short of it: We still have not been called for our CCRC unit! This was a big surprise to us, as well as to the CCRC director, who informed us that people are just not moving into assisted living units, and are choosing to stay in their units and hire private help despite the social and financial downsides.

We are enjoying our "vacation home" location, but are anxious to get into the CCRC. Fortunately, when the call comes, we are ready with money in the bank, lines of credit arranged, and lots of planning already in place.

Good luck to you.

 

[harllee]

So, what happens when you reach the front of the queue, you look at the apartment being offered, but don’t like it (for whatever reason)? Do you stay at the front of the queue, go back a few slots, get kicked out

At my CCRC you can refuse an offer of an apartment 3 times and stay at your place on the waitlist. After the third decline you go to the bottom of the wait list which probably means you will never get in because our waitlist is so long.

 

[braumeister]

The CCRC will tell you what their policies are regarding your question, but I know a couple that give you a six month grace period when you move in before the entrance fee is required. They have all encountered this question in the past, and have guidelines to give you

 

[Happyretired]

We will be moving into a new CCRC unit in about 1.75 years. The move-in time has been contractually agreed to. Given the current state of the housing market, we are planning to put our house on the market this summer and rent.

 

[youbet]

At my CCRC you can refuse an offer of an apartment 3 times and stay at your place on the waitlist. After the third decline you go to the bottom of the wait list which probably means you will never get in because our waitlist is so long.

Does the apartment they offer you have to meet some criteria? For example, you want a two bedroom unit and they offer you a one bedroom unit.......

 

[harllee]

Does the apartment they offer you have to meet some criteria? For example, you want a two bedroom unit and they offer you a one bedroom unit.......

Yes, you can put certain units you are interested in on your list. But our waitlist is so long some people are just saying they will take anything

 

[Happyretired]

We had been on the waitlist for a long time, so we were high up on the list for the new units. We are fortunate that we will be getting a new unit and the floor plan we wanted.

 

[Happyretired]

Does the apartment they offer you have to meet some criteria? For example, you want a two bedroom unit and they offer you a one bedroom unit.......

There are some CCRCs that give priority to current residents who initially buy smaller units and then request to move to a larger unit. Others don’t allow this.

 

[harllee]

There are some CCRCs that give priority to current residents who initially buy smaller units and then request to move to a larger unit. Others don’t allow this.

They do this at our CCRC but there is a fairly high transfer fee. Most people never move once they get here unless there is an important reason (like a spouse dying and they need to move to a less expensive apartment).

 

[pb4uski]

If you can do it at no cost, I would set up a HELOC now so it's ready to go and doesn't hold you up.

 

[camfused]

^^^ How would a HELOC work, if they are trying to sell their home (to generate the entrance fee)?

 

[ChrisC]

I think if you need short term financing to bridge the gap of selling your primary residence and closing on the CCRC entry costs, then the SBLOC would be my way of handling this if you have enough in a taxable brokerage account. I’ll be setting this up in a year or two when I expect a call from the CCRC we’ve been on the waitlist since 2019. Also, if you have enough in your retirement accounts, whether traditional or Roth, you can do the 60 day indirect rollover approach to buy 59 days of liquidity.

 

[Happyretired]

We can’t run the risk of waiting to put the house on the market until a few months before we’re ready to move in as we need the money from the sale for the entrance fee. We have houses in our neighborhood that have been on the market for close to a year. We think ours will sell quickly but you never know.

 

[ChrisC]

We can’t run the risk of waiting to put the house on the market until a few months before we’re ready to move in as we need the money from the sale for the entrance fee. We have houses in our neighborhood that have been on the market for close to a year. We think ours will sell quickly but you never know.

Your best way forward might be to arrange a "private placement" like planuntilthefisthits did above and like friends of ours did recently. Our friends had a next door neighborhood's house sell and the new buyer of that house knew someone else interested in moving to the neighborhood -- our friends, healthy ages 84 and 86, were on the back and forth of moving to a CCRC but decided the time was ripe for them. They were able to move into the CCRC (they didn't need the sale proceeds to finance the move) last month and closed on the home sale two weeks later -- their CCRC unit was being renovated during the time they were negotiating with the buyers on the closing date for the sale of their primary residence. I'm hoping to be so fortunate, but we have probably a 18 to 24 month runway for a move -- the CCRC we're waitlisted told us it doesn't expect any availabilty for the units we told them we were most interested in the next year.

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[Happyretired]

Your best way forward might be to arrange a "private placement" like planuntilthefisthits did above and like friends of ours did recently. Our friends had a next door neighborhood's house sell and the new buyer of that house knew someone else interested in moving to the neighborhood -- our friends, healthy ages 84 and 86, were on the back and forth of moving to a CCRC but decided the time was ripe for them. They were able to move into the CCRC (they didn't need the sale proceeds to finance the move) last month and closed on the home sale two weeks later -- their CCRC unit was being renovated during the time they were negotiating with the buyers on the closing date for the sale of their primary residence. I'm hoping to be so fortunate, but we have probably a 18 to 24 month runway for a move -- the CCRC we're waitlisted told us it doesn't expect any availabilty for the units we told them we were most interested in the next year.

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We're hoping we can sell our house without a realtor. This has been a rough winter season; we're tired of home ownership.

 

[ChrisC]

We're hoping we can sell our house without a realtor. This has been a rough winter season; we're tired of home ownership.

You mean you’re tired of home maintenance, as am I. The CCRC we will likely transition is an equity business model — you own the residence, but maintenance, outside and inside the residence, is entirely done by the CCRC, including housekeeping and linen changing once a week. There’s real estate property taxes and some home insurance (more like a renter’s policy insuring the inside of your unit and contents) the owner is responsible for but everything else is taken care of by the CCRC, including utilities and cable.