While all the attention seems to be on millennial home buyers, it is important to also focus on the other end of the spectrum – Baby Boomers! Increasingly, tapping growing housing equity via a Reverse Mortgage loan is a viable option. There are eight issues that most Baby Boomers have to face as they enter Retirement.
Leaving the family home or a house you have lived in for many years is not easy by any standards. Being in a situation where you must move to a smaller residence may force you into parting with your treasures. The things you have become familiar with and worked hard for over the years… yes, those things, your treasures are important to you.
Atlanta Seniors Real Estate Team work with services that are dedicated to helping older Americans downsize in a systematic and stress free manner.
“You ask yourself what you want to keep, and the answer is ‘everything,’ ” said Dr. Harrison-Ross, who turns 80 next month. “It’s an emotional roller coaster that takes a toll on you. It’s very tiring.
“I thought I could get down to the bare essence of things myself,” she said. “But that proved to be very difficult, much more than I had expected.”
Her solution: Dr. Harrison-Ross hired a senior move manager.
Moving is stressful at any age, but for those who have lived in one place for many years, getting rid of things that have accumulated over decades is a large barrier to overcome.
As people get older, said David J. Ekerdt, a professor of sociology and gerontology at the University of Kansas, cognitive and physical issues hamper divestment. “It’s also a very emotional task. It’s hard to quantify the attachment one has to certain possessions,” he said, adding that the probability of people divesting themselves of their belongings decreases each decade after age 50.
“You ask yourself what you want to keep, and the answer is ‘everything,’” said Dr. Harrison-Ross, who turns 80 next month. Photo Credit: Emon Hassan for The New York Times
Senior move managers specialize in the issues that comes with downsizing, including donating and selling items and hiring movers. In New York, these managers maneuver through the often stringent moving and trash-disposal rules adopted by co-ops and condominium buildings. They also deal with out-of-town family members who may want items sent to them. They pack and unpack; they call the cable company. Most also help with decluttering and organizing the homes of seniors who wish to stay put.
Click here to read more about how NASMM can help you or your family member to downsize their belongings.
Judith Kahn, who owns Judith Moves You, oversees a client’s move into a new apartment. Photo Credit: Emon Hassan for The New York Times
This specially-designated REALTOR can save the children of seniors a lot of time when their parents need to downsize
Many seniors who own homes eventually get to a point where their home no longer accommodates them as it was originally intended. They may no longer need the size of the home, be physically able to take care of the home or can afford the cost of maintaining the home. In too many cases, health challenges compress the time needed to plan for a housing transition, find a new home or other living arrangements and/or sell their current home.
The children of seniors will find there’s a plethora of resources, housing options and price points to consider, so finding a residence that is the perfect mix of warmth and proximity to health care providers and facilities while being functionally adequate for the challenges of aging means much time and effort is involved in considering all the options. Senior-specific financial and real estate considerations often must be handled by the children of seniors, while juggling their careers and family life.
If your senior parent or other loved-one needs to downsize or find a residence better suited for them, a SRES®-designated REALTOR is best trained to handle your loved-one’s real estate needs. They can sift through the options and present them to your parents, saving you a lot of legwork and time.
“The challenge is that ‘many children of baby boomers’ rarely have the time that is needed to gather all the necessary information about the services that would be helpful to their parent. This means the parent often remains in their ‘ineffective’ situation for longer. But also, connected to this, is that often the adult child is trying to show the parent that it may be best if they no longer live in the family home that has functional issues relating to the parents’ current health conditions. The other challenge is for the adult child to find and provide solid information to parents without making the parents feel as though their child is ‘babying’ them or trying to take over. Seniors Real Estate Specialists like me can help with all of this.”
To be experienced in serving this demographic, the REALTOR must pass the National Association of REALTORS-designed course. Earning the SRES® designation means the REALTOR specializes in the needs of clients aged 50 and over who are buying and selling real estate.
SRES®-designated REALTORS are knowledgeable about these things and will save you much time by handling them for you:
Senior housing options
Factors and trends in housing, retirement income and finance specific to those 50 and over
Identifying and protecting seniors from finance, mortgage and loan scams that target this demographic
Housing for Older Persons Act (HOPA), senior communities and housing restrictions
Counseling strategies to help in life transition planning
Using Reverse mortgages, 401k accounts, IRAs and pensions as part of wealth management and to assist in real estate transactions
Helping your parent or senior loved-one understand how Medicaid, Medicare and Social Security can benefit their real estate decisions
SRES® REALTORS also have partners in the Senior Care Market who help make the transition to a new home as easy as possible for all concerned. Kaye Ginsberg, founder of Peace of Mind Transitions, a full service seniors relocation partner, explains:
“Senior Move Managers take the stress out of moving. We work together with the senior and their family to decide which belongings will go to the new home, then work with them to manage what to do with the rest (sell, donate or dispose). We coordinate packing and moving and then completely unpack the new home; including hanging pictures and making the beds.”
Ginsberg said, “The first step is for the senior to identify what they will take with them and what they would like family members to have – and that’s the hard part. This is the first time in history that we have two generations downsizing at once – and none of the “children” want any of their parents’ belongings. Which means that many items like china, crystal and silver are not holding up in value for re-sale. Perhaps it would be better to focus on what I like to call ‘Doing Good While Downsizing’. Why not donate items to a local charity who will make sure your items go to people in need who will appreciate them?”
Ginsberg says it’s good to strategize early: “It’s never too early to start thinking about the future. Even if you’re not ready to move now, it is wise to know what your home is worth and what other housing options are available for you. And it is certainly never too early to start thinking about what you want to do with your lifetime accumulation of possessions.”
If you are an older retiree and have been overwhelmed lately with managing your financial accounts, it might be time to consider hiring a Daily Money Manager (DMM). A DMM is a cost-effective way to help keep your financial life in order by hiring a professional to help you keep track of paying your bills on time, balancing your check book, handling insurance matters and providing tax documents to your accountant. Depending on where you live, costs can range between $75 to $150 an hour and some even charge a monthly retainer instead of an hourly fee.
Atlanta Seniors Real Estate caught up with Barbara Scurry, founder of Senior Partners. Barbara has been a DMM for 6 years and 10 years in geriatric health care/ marketing.
“I’ll share with you the story of Dorothy, a client of mine for almost four years. Dorothy was 79 years old when I started working with her. She never married, had no children, siblings, or other relatives with which she associated and she lived in an assisted-living facility (ALF).She was highly educated and detail-oriented but had stopped paying her bills and was showing early signs of cognitive decline. When I started working with Dorothy, I had great concern that she would run out of money within 12 to 18 months.”
Saving and finding money
Scurry said, “I began basic daily money management services, including opening and sorting her mail, making calls to outside vendors on her behalf, and organizing her files. But I got involved with her life issues as well and quickly realized she was not getting the care she needed (and was paying for) at the ALF where she was living. I helped her find a new ALF that saved her $2,500 per month in living expenses.”
Dorothy was also missing stock certificates that were about to be turned over to the state of Georgia, “one evening, as I was going through some old papers I finally found them! When we deposited those certificates, they ended up being worth more than $125,000! That money helped take care of her needs for the next three and a half years!”
Help with moving
Scurry even advised Dorothy on moving, a service perfectly aligned with the real estate transition services provided by Atlanta Seniors Real Estate Team.
“I referred her to a professional move management company and coordinated their services to get her packed, moved, and unpacked at her new location.”
Extra money can be used for updating home to age in place
Seniors and their adult children decide every day on aging dynamics and the feasibility of remaining in a long-term residence. While many seniors choose to downsize their living space, there’s a share of seniors that desire to remain in their homes or age in place.
Peter Bell, president and CEO of NRMLA and president of the National Aging in Place Council, positions using home equity as a way for seniors to update their homes to age in place.
“Instead of moving out, various modifications, such as stairless entryways and wider bathroom doorframes, can be made to accommodate new mobility and accessibility needs,” he said. “The housing wealth our seniors have built up in their homes over the years, their home equity, can be used to update the family house into a space for living comfortably and independently for years to come.”
A few stats about American homeowners aged 62 +
According to the National Reverse Mortgage Lenders Association (NRMLA) and RiskSpan, this demographic had $6.3 trillion in total home equity at the end of the first quarter 2017, a 3.1% increase between fourth quarter 2016 and first quarter 2017
NRMLA and RiskSpan’s Reverse Mortgage Market Index, reached 227.07 in the last quarter, the highest since it was created in 2000.
Seniors’ home equity has been rising steadily for much of this decade, only falling in three quarters in 2010 and 2011 during the recovery from the housing crisis and recession.
If you or a loved one have recently been diagnosed with a visual impairment, you’re probably thinking about ways to improve and modify a living space to make a home safe and comfortable. It can be overwhelming at first, but the key is to start small and work your way up. Sit down and make a list of any daily activities and how they’ll need to change; for instance, voice software that will aid with working on a computer.
You’ll need to do your best to add up all the expenses you expect to incur. You might find that moving will end up being the best option. At least add up the potential costs of moving, and compare. It’s important to think about function and safety over anything else. Here are a few tips on how to create a safe living space that will work well for you or your loved one.
Look at your lighting
The lighting in your home is extremely important. Natural light is usually preferable to individuals who have a visual impairment, but it will be necessary to have another means of lighting dark corners, closets, stairways, and the places you spend the most time.
Be careful about lighting that creates glare as certain types of flooring can become very shiny under bright lights and might create a fall hazard.
Make important things easier to find
It will be very helpful to mark important things–such as the thermostat, the knobs on the oven, and the edges of stairs–with brightly colored tape. Color and texture are extremely useful for people living with a visual impairment, so wrapping your toothbrush with a rubber band might help you differentiate between yours and the ones belonging to your spouse or other family member.
Your home needs to be safe first and foremost, so clear out any clutter in the main living and walking areas. Don’t forget to either remove throw rugs or tack them down to the floor so the corners don’t turn up and create trip hazards.
Contrasting colors are extremely helpful for the vision impaired, so consider painting the walls behind appliances and around light switches a bright color to make things easier. This is an especially helpful tip for the bathroom, where walls and appliances are likely to be white and blend in with one another.
Organize the pantry, closets, and cupboards and use a braille label maker to make small or similar items easy to find. Group like items together in a way that will make sense to you and memorize the groupings.
Think about safety
Disabilities of any kind require a new way of thinking about safety, so it’s important to think ahead and make sure smoke detectors, carbon monoxide detectors, and fire extinguishers are in proper working order and in every room. It might also provide you with a bigger sense of safety to have a security system installed with a loud alarm.
Consider these factors and how you can either incorporate them into your current living environment. If moving might be a better option, try to see what you can find on the market that covers at least some of this. Chances are, you’ll still need to adjust, but investigate all your options, because doing so can make a huge difference when it comes to how much it’s all going to cost.
If your senior parent or other loved-one needs to find a residence better suited for them, a SRES®-designated REALTOR is best trained to handle their real estate needs. PEMCO Realty has a team of Senior Real Estate Specialists ready to assist you or your parents to make this a smooth process.
When we think about purchasing a new home, we often think about young families looking to expand or people looking to move to a different part of their city (or even across the country). Once a person hits retirement age, we don’t think about them purchasing a new home.
Seniors have plenty of reasons to purchase a new home. There’s no rule that says you’re locked into the house you’re living in once you hit a certain age. If you’re a senior in the market for a new home, there are three basic questions you need to answer before you get started.
Why am I purchasing a new home?
The reason why you’re purchasing a new home should drive the type and location of the house you choose. Many seniors choose to move in their later years to downsize. Maybe you’re living in the house you’ve lived in for decades and it’s simply too much room for you now that the kids are gone. If so, you need to look for a low-maintenance home. Maybe you’re moving because of mobility reasons. If so, you need to make sure that the new home you buy is set up for prime accessibility. Maybe location is what matters most, as you’re moving to be closer to family. Figure out your prime motivation for moving and tailor your home search around it.
How am I going to finance it?
For some seniors, this usually is not a tricky subject. If you’re financially stable, you may choose to finance your new home in the same way you financed your last home – with a standard mortgage.
But for some seniors on fixed incomes, the question of paying for their new home is a little more complicated. It is worrisome to think about paying a large monthly mortgage payment on a fixed income, and worse yet, dipping too heavily into retirement savings.
“With the HECM for Purchase reverse mortgage, the borrower provides a down payment using the sale of the previous home or other savings. The equity earned through the down payment and the new home’s value is used to calculate the reverse mortgage loan amount. During this process, borrowers may need to meet the loan-to-value ratio requirements with a significant down payment and provide verification of personal income and funds. All or part of the reverse mortgage funds then cover the remaining cost of the home, just like with a traditional mortgage.
The benefit to financing with a reverse mortgage is that instead of paying the loan back every month over time like a traditional mortgage, reverse mortgage repayment is deferred to when the loan matures.”
This means no monthly mortgage payment – payment is due when the house is sold or the inhabitant dies. Keep in mind that you’re not building up equity in that second home, and there could be very little left in equity once the reverse mortgage is paid off.
When you’re thinking about financing, you should also consider what repairs or improvements will be needed in the home for it to be a safe and comfortable place for you to live as you get older. For example, what will the cost be if the bathroom needs a remodeling for it to be more accessible for you or your spouse? Or are there outdated appliances in the home that will need to be replaced soon? It’s important that you’re clear on all the home’s needs before making a buying decision as repair costs can add up quickly.
Remember, you do not have to make these tough financial decisions on your own. It’s best that you talk to a financial advisor to come up with a budget for your new home and to figure out the best way for you to finance your new home.
How am I going to handle the move?
Moving is tough on anyone – regardless of age – but it can be especially taxing on seniors. You need to plan. Don’t be afraid to de-clutter. Hold yard sales and distribute meaningful items to friends and family. Slowly pack boxes as to avoid injury and strain. For most seniors, it may be best to hire professional movers if you don’t have family members that can help you move.
If your senior parent or other loved-one needs to downsize or find a residence better suited for them, a SRES®-designated REALTOR is best trained to handle your loved-one’s real estate needs. PEMCO Realty has a team of Senior Real Estate Specialists ready to assist you or your parents to make this a smooth process.