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First, make absolutely sure that you are not soliciting nor recommending that people are selling their homes to buy an annuity.
Second, if you're in California... I'd think twice about it. Check on the annuity lawsuit threads.
Second, if you're in California... I'd think twice about it. Check on the annuity lawsuit threads.
like many advisors, as I keep on touch with clients I learn about potential home sales months or years in advance. I follow it closely to help them invest the proceeds. It's gonna be tough - most folks with money have an advisor which means: to make a living, you need more than one concept.
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- #4
- 10,363
The problem is that most people sell their existing home so they can put that money into a new home. Some decide to downsize and save some of the profits for retirement. Some might be second homes or income properties. But I would guess that the "lots of sellers" in your area probably are not all second homes for those people. And downsizing can mean a lot of things to different people. A person can downsize on size and upsize on price...
I think that you have a hard marketing road ahead of you using this strategy. Not to mention the potential regulatory issues.
I think that you have a hard marketing road ahead of you using this strategy. Not to mention the potential regulatory issues.
I have two cases that I'm finishing up now, that involve the sales of second or third homes, with part of the $$ used to purchase the annuity. However, they're both over 65, and both seasoned annuity buyers.
It would be interesting to see how well something like that worked taking it to the streets as a marketing gimmick. I think that it will work, but you would certainly have to talk to loads of people.
I will go on the record as saying that it is a far better use of $$ to purchase an annuity, than some of the idiotic things people do when they sell a home and get a bunch of cash.
I know one guy that sold his home, took the money and gave it to an "investor" that lost it all for him in six months. The same guy sold his beach house and did the same thing with another get rich quick scheme. You don't even have to make this stuff up, it happens every day.
- 10,363
Ive had people use the sale of a second or third home to fund an annuity. Nothing wrong with that.
But what % of home sales are 2nd or 3rd homes do you think?
And Ive heard some whopper of stories in my time. One guy I know from a local lunch counter I eat at. He was listening in on my conversation with someone else and said he knew how to get a 10% return guaranteed.... so of course I asked how!...lol ... and of course it was a "buddy" who was selling shares of his franchise of dollar stores... I asked if the guarantee was in the contract and he said that it was "written down". When I said again "in the contract?" he said there was no contract, he just gave the guy cash and the guy wrote on a piece of paper that he had shares of his franchise and would get a 10% return on them!!! lol
So not only was he likely involved in an unlicensed security sale, but he also had just a hand written guarantee of return (with no signature from either party).
I will give you 2 guesses on how that ended up for him... lol
And of course I tried to warn him, but when I realized his mind was set and I was basically talking to myself I just told him "good for you".
