SIX THINGS THAT UNIQUELY AFFECT REAL ESTATE FOR AGE 55-PLUS

I'll wager a bet with you. If you're over 55 you are less informed now about how the rules of real estate affect you, than for your first home. Why? Beginning around our fifties, our financial and health profiles are different. And we're treated differently by the IRS, medical services, lenders, insurors, and even the real estate market itself.


This is not necessarily negative, because we do enjoy unique opportunities, as well. The 1965 Older Americans Act spells out certain benefits for we Baby Boomer-aged persons. But we're not talking about violations of the Fair Housing Act, which disallows discrimination on the basis of age.


Here's an illustration. I have a number of clients right now who have asked me to help them find a nice cabin or small vacation home to retreat to with the family now, which will transition in a few years into a primary residence during retirement, then eventually become a long term real estate investment to fund needs later in life.

Jimminy! There's about twelve important issues buried in that simple plan. For example here are only a few: Which outdoor activities is the home nearby, that will keep teenagers entertained in the short term? And how well can a retired couple, later on, shovel the snow and maintain the house? In later life, how far is it from emergency medical services? These are just part of a long checklist of home features for one to consider when "simply" looking for a 2nd-home/vacation retreat to retire to in out years, then sell as an investment.

Here's another illustration. I had a client recently who was worth well over a million dollars. In cash. He had just sold his farm and wanted to buy a modest home in the Black Hills. He could have easily paid cash for his modest home. But he wanted to leave his savings in bank CD's, so he applied for a loan. In today's complex lending environment he had trouble getting the loan he wanted because he had no income coming in to make the payments!

If you've bought and sold a number of homes, you likely had a higher income compared to your net worth. But in your fifties and especially after retirement, we rotate in to a high net-worth to income ratio. That changes a lot of things for you.

Heard a lot about the Federal $8,000 give away for First-time Home Buyers? An increasing proportion of my over-55 clients are seeking single-level homes. Heck, some of them could climb a mountain, but they know that as "Last-time Home Buyers" a time will come when they won't even want to climb stairs with groceries. As Medicare/Medicaid grow more daunting and accessibility of costly medical care grows more uncertain, many persons aged 55-plus are looking in to Universal Design Standards for their homes. With the exploding number of Baby Boomers, specialists in Aging In Place are being certified for knowing the preferences of persons over-55 and their priorities for housing. Incidentally, I am the only realtor in the Black Hills holding the national certifications for Seniors Real Estate Specialist and EcoBroker.

Overall, there are often identified six categories of rules that affect real estate transactions differently for those of us over 55. These are:

1. Taxation and Taxable Transactions
   


2. Transfer of Home Ownership to Others
   


3. Health, Safety and Medical Support, Integrating Government Support and In-home Care
   


4. Insurance
   


5. Financing
   


6. Home Design.

Any one in there fifties contemplating purchase or sale of primary residence, or a vacation home, investment property such as land or a business, needs to first do some critical homework. What I have found, after dealing in real estate in ten states for decades, and what others are finding, is that all that prior experience in real estate simply does not prepare us for how much the same old rules affect us very differently when we reach our fifites. Partly because we and our personal circumstances have changed, partly because of what we've done in the past, and partly because we are about to undergo some great transitions around retirement time.

Please, do your homework! The life-exam questions haven't changed, but the correct answers certainly have.

Lee Alley is over 55 and is the only nationally certified realtor in the Black Hills for seniors real estate and living "green".

Posted by Lee Alley, www.BHhomes.INFO, Rapid City, Black Hills, SD at 9:30 AM  

Labels: Boomers, Retirement Investments