It is estimated that, by 2024, one in four people in the United States will be 60 or older. People are living longer. At some point, many seniors will sell their homes, whether it be a choice to downsize or because circumstances force them to make a move.
By the age of 55 or 60, most people have purchased or sold a home and just about everyone has been through a move. But, after 55, real estate transactions and even moving, are more complicated. If children were raised in the home, the thought of leaving the place where some of the dearest memories were made can be painful. Also, the logistics of preparing a family home for a sale and downsizing a lifetime’s worth of possessions can be daunting. Moreover, the financial and tax implications of selling a home can affect that long-awaited (and much deserved) retirement or change estate planning.
The above comments and thoughts below are from a peer of mine, Realtor Christina Rice (https://christinarice.kwrealty.com) who is a Certified Seniors Real Estate Specialist (SRES) operating in Pleasanton, CA. She brings up many valid points on “why” seniors make the downsize move but I believe “the trigger event” rules most of the timing & logic. She goes on to site a client example below.
In their 70s, Sheryl and Craig Wendland are hesitant to sell the Pleasanton home they have lived in for years because of the emotional and financial aspects. “We thought when we retired we’d move to a smaller home or a cheaper area,” Sheryl said. “But, no, we love our home, love our neighborhood and love our community.” And the financial impacts are “really scary,” Sheryl said. “But if one of us gets ill, or we both become ill or one of us dies, we’ll do what we have to do.”
The” trigger event” as I refer to it, is a life changing event that finally pushes clients into action. Think financial constraints, bad medical news, declining health, house being too much to deal with, family change or loss of a loved one to name a few. Any of these events and many I haven’t named are all drivers of action. I find that most clients won’t make a housing change of this magnitude, even if they want to make the move, until a trigger event forces a re-prioritization of their needs/wants.
A recent study reported that the top three reasons seniors give for making a move are changes in health, freedom from home maintenance responsibilities, and a desire for peace of mind.
Some things to keep in mind when considering a later-in-life home sale include the following:
It’s a family affair
Although most seniors make the decision to move, their adult children or other family members sometimes help them decide whether moving is the best alternative. To prevent misunderstandings, it’s a good idea to gather the family members who are affected and discuss the decision to move especially if it is the family home to which family members have emotional ties.
Other issues to consider are what will happen with the possessions. If the move involves significant downsizing, a family discussion might be the time to decide what to do with the possessions.
An adult child or another family member might need authority to make legally binding decisions regarding the sale if a parent is ill or incapacitated. A durable power of attorney naming the person who will act on behalf of the sell must be done prior to the incapacity.
Also, if multiple family members are involved, it’s a good idea to choose a representative to communicate with the professionals – the real estate agent, attorney, and financial advisor. Multiple contacts can create confusion and delays.
Selling a home can trigger significant taxation, especially if proceeds aren’t used to purchase another home and capital gains taxes apply. Since every case is different, it’s best to contact a tax expert or financial advisor to determine how the sale will affect the seller financially.
Rather than touch on the many ways that you’re affected when selling a home, you should consult a trusted financial advisor to help evaluate your particular situation. Especially if you’re considering moving into a Senior Living Community, where assistance can be provided.
Often times the “top 3 reasons” above are predicated by a trigger event & that is what drives the move. Unfortunately, the trigger event usually requires that you focus on a lot of things at the same time. Afterall, if you’re going to move, you must also – sell the house, consider what you’re doing with all your stuff, decide where you’re moving to, mange health crisis or the recent passing of a loved one and all of these “to do’s” are emotionally charged. It creates a cyclone of stress & that takes a toll on the health of the seniors.
Once a decision is made to move and where, and the family is on board, the next step is to identify experts to go over the logistics and financial aspects. Whether a senior is downsizing or moving in with family, it takes careful planning to make the best decisions for everyone involved.
Realtor Christina Rice is a Certified Seniors Real Estate Specialist (SRES), astute to the financial and emotional challenges senior clients face when they sell a long-held family home. Her article was published in © 2022 PleasantonWeekly.com
Todd Howard is founder and CEO of HALO Senior Solutions and a licensed IN Realtor holding the SRES® (Certified Seniors Real Estate Specialist) designation. He has helped 100’s of seniors & their families downsize from a long term house into either retirement community living or an “age in place” home.