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Making a move during the golden years

Members of the largest, most influential generation of senior citizens in history are facing a financial decision far greater than whether to endorse the latest Social Security "fix." At issue is the sale of what may be their primary asset - the old family homestead.

With the kids gone, the aches and pains amplifying and retirement nearing, those once-fulfilling household-maintenance duties such as lawn mowing, roof fixing, fence mending and cleaning may be getting less therapeutic and more laborious.

Hence, thousands of seniors are pondering a move to new quarters that will better fit their lifestyles, suit their health and wealth needs and be closer in proximity to loved ones. They'll do so as other contemporaries stay put, a phenomenon known as aging in place. In fact, about 70 percent of all seniors will opt to spend the rest of their lives in the place where they celebrated their 65th birthday, according to Senior Advantage Real Estate Council.

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For those who elect to adapt to their changing world in a different setting, there's a litany of things to consider -- and mistakes to be avoided -- before placing that house on the market.

First, seniors should secure the services of a Realtor who routinely works with their peers, the council advises. There are now more than 7,000 agents in all 50 states and Canada with the distinction of Seniors Real Estate Specialist, or SRES -- now the sixth-largest real estate specialty designation for Realtors. Most major markets have several senior specialists to choose from and more are rising through the ranks.

Many are also members of the 55-and-over set, including Helen Barakauskas, a seniors real estate specialist with Prestige Properties of Farmington, Conn., who lives in a 55-plus community.

Barakauskas recommends a market evaluation for senior sellers, performed as part of an agent's basic service. "Some of these folks have been living in their homes for 50 years," she says. "They bought a nice little place for $20,000 and it is now worth $250,000, and they often can't believe it. An evaluation will help provide that frame of reference they need."

She also recommends a full financial evaluation, in which investment objectives, equity-conversion strategies, capital gains taxes and the other implications of selling are thoroughly discussed.

More importantly, perhaps, is a less-formal lifestyle analysis. "I find out what is most difficult about their situation now and what is easier," she says. "If the current home is too costly to maintain and its style is difficult for comfortable living, that's important."

Barakauskas will try to help sellers determine whether they need to be close to public transportation if they no longer can drive, how important it is to be near quality medical care and family and friends, and how important security is to them. "That all leads to a discussion on different (housing) options," she says.

According to seniors real estate specialists, Realtors should try to emphasize how a change in habitat could make the senior's life much less complicated and more carefree, and focus more on the positive than the negative of such a big step.

"The older generation needs a little more hand-holding in this process," says Dennis Kaiser, a senior specialist with ReMax Associates of San Diego. "It's easy to get overwhelmed after you've lived in the same place most of your adult life."

Sometimes various assessments may indicate that seniors needn't move at all, Kaiser says. "Often, a reverse mortgage will enable them to stay where they are, and to many, that's very important."

Reverse mortgages allow homeowners 62-years-old and over to convert equity into cash to meet mounting medical expenses, supplement Social Security or fix up their homes. "You can make needed modifications in the home and generate the cash needed to assist you," says Sally Hurme, a consumer-protection attorney with AARP. "Of course, the set-up costs are pretty pricey, so you don't want to do it if you know you're going to be moving within three to five years."

Reverse mortgages are available through Fannie Mae, the Federal Housing Administration and other national lending entities. Seniors can inquire about them at their local banks.

Staying on top of state-tax nuances also helps many senior clients. For example, California's Proposition 60 allows seniors age 55 and up to transfer the base-year tax value of their home to another home of equal or lesser value that they buy in the same county, agent Kaiser notes.

This senior niche is one that's obviously not going away. The number of persons 65 and older is expected to rise 137 percent to 82 million by 2050, according to the U.S. Census.

In home buying and selling, it's important that agents who work with seniors emphasize counseling over selling, seniors real estate specialists say. That extra care involves "asking all the right questions and just being patient sometimes," says Sharon Durdel, a senior specialist with Las Vegas-based Liberty Realty.

Durdel advises seniors, "Get more than one opinion and interview several different Realtors. The right one should take extra regard in the circumstances of the (senior) seller and the timing of the sale. This is an emotional time for the sellers and everything should be in order."

-- Posted: July 27, 2007




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