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Choosing to sell your home at any time in your life is a big decision. As you enter your golden years, that decision takes on much more gravity. There are many practical considerations, of course. Many seniors choose to sell when they find their larger home too difficult to care for any longer and know that a smaller one will be easier for them to manage. They might look at the financial boost their retirement savings could get from their home sale, especially in a hot market like the one we’re in today. Some have suffered a fall or some other medical emergency that leaves them uncertain about living alone or on multiple levels, so they want to downsize and make their home a little more manageable.
But there are other considerations that might hold you back. Do you currently live in your family home, where the children grew up and where you always envisioned yourself growing old? That can be tough to part with. In fact, an AARP study found that 77% of those over the age of 50 long to grow old in their own homes. Do you enjoy your neighborhood and the close friends you’ve made there? It can be hard to walk away from that. Are you concerned about the difficulties and time it will take to actually move a lifetime of memories? That can be so daunting that just thinking about it is exhausting.
For many seniors, moving away from their homes and into a new place is a good idea. A study from Senior Housing News found that the top three reasons seniors choose to move include changes in their health situation, a desire for freedom from home maintenance, and overall peace of mind. By 2024, an estimated 25% of Americans will be 60 or older[1] – which means that there could be a lot of older adults out there looking to sell their homes. It makes sense that the time to sell is now, while the market is hot.
And the time to buy could be right now as well, as some of those homes coming to market could be great for downsizing. The National Association of Realtors reports that 24% of all buyers looking to buy a smaller home were elderly adults between the ages of 74 and 94.
Let’s take a look at why you might want to move – and sooner, rather than later.
How to Know it’s Time to Sell
Sure, the market is hot, but is it the right time for you to sell your home? Consider these points before you put up your for sale sign.
· It’s a seller’s market. This one is pretty obvious. You want to get as much money for your house as possible. There is limited inventory compared to the vast numbers of people who want to buy homes, so you are in a prime position to ask for a good price and actually get it – and quickly. Stories abound of those who have sold their homes before even putting them on the market. The sales bug has caught on everywhere, with Fannie Mae reporting that 51% of Americans believe now is the time to sell[2].
· It’s becoming difficult to care for your home. Just as we need more care as we age, the same is true of the homes we live in. Older homes require more maintenance on almost every system, including the roof, flooring, plumbing, electrical wiring, and more. The “little things” they’ve always required can become harder to handle, such as cleaning out the gutters, taking care of the lawn, or even walking the trash down to the curb for pickup.
· Your costs keep rising. Does it cost much more to heat or cool your home now, versus what it cost just a few years ago? Are you now paying for lawn maintenance or handyman work that you once did yourself, or higher property taxes? If you still have a mortgage, you might be paying more in interest rates (if it’s a variable rate loan). If your costs keep going up, it might be time to find something more affordable.
· You’ve got a lot of equity. According to Quicken Loans, equity is the difference between what you owe on your home and what your home is actually worth. As an example, let’s say your home is worth $250,000. You’ve paid your mortgage faithfully over the years and now owe about $50,000. That means you have $200,000 in equity in your home. Why does this matter? Because if you sell your home for $300,000, the bank gets $50,000 to pay off the loan – and you get $250,000, free and clear. That extra cash can be an enormous boost for your retirement years.
· You’ve had to use your emergency response solution. If you have suffered an accident, injury, or serious fall in your home, you might have had to use a medical alert device to reach out for help. This is especially true if you slipped and fell and broke a bone or suffered a head injury. Consider if your home has gotten to be too much to physically manage.
· You’re feeling lonely. Social isolation and loneliness lead to increased health problems in seniors, including weight gain, depression, anxiety, a weakened immune system, heart disease, and cognitive decline, among other negative things[3]. If you live out in the country where you rarely see others or find that you need more community as you get older, moving is an excellent idea for your health.
Where Would You Go After the Sale?
Perhaps you’ve had your eye on a smaller home in the same community you’re in now. Maybe you want to retire to one of the many excellent places for seniors we covered in a previous blog post. Perhaps a senior community is what you want, where the lawn is taken care of and you have close, friendly neighbors about your age. Are you looking to move into a home with family or friends, so you can share responsibilities and get to know each other better in your later years? All of these possibilities are on the table!
But be realistic about the fact that it’s a seller’s market. That makes it easier to sell your home, but tougher to buy one. However, if you have a great deal of equity and you’re looking to seriously downsize, you might wind up with a nice bit of money left over even after you buy a new place.
Another option might be to live with a family member for a while until the market cools and puts the buyer in a position of power. Think long and hard about these concerns before you put your house on the market, as you want to have a firm plan in place on where you’ll be going after the sale is done.
Making the Decision to Sell
You’ve read about the reasons why you might want to sell. But once that decision is made, there are many other choices to be made along the way. Here’s a brief outline of what you should do once you’ve made the decision to put up the For Sale sign.
· Talk to your family. If it’s just you, or you and your spouse, making the choice to move might be pretty easy. But there are usually others involved, such as a family caregiver or children who might hope to inherit the home one day. If you hope to live with a family member for a bit before buying a new place, that’s definitely a topic to discuss!
· Talk to your financial advisor. What will a sale of your home do for your retirement? Are there reasons that perhaps you can’t sell your home? Are there better options for you? A financial advisor can look at your situation as a whole and provide practical, unbiased advice that will help you decide if selling is a good idea.
· Get in touch with a good realtor. Talk with someone who knows the ins and outs of selling a home for seniors. This means they are well aware of the challenges aging can bring and understand that a home with steep steps, a long and difficult driveway, or tiny bathrooms might not be the best idea for those who are entering their golden years. They will be able to talk you through the potential downsizing options.
· Prepare the home for sale. Your home needs to make a good impression. Start with organizing, tossing out the accumulated clutter from years of living there, and sorting through heirlooms to give family members what they might like to have. Then hire a professional cleaner to do everything from clean those hard-to-reach baseboards and ceiling fans to making your kitchen sparkle. Finally, make some repairs you’ve been putting off. Hire a professional handyman to help with this if you need to. If you do choose to tackle some repairs on your own, make sure to keep a medical alert pendant on you at all times.
· Think about updating. If you’ve lived in the home for a long time, some updates might be desirable to drive up the price. For instance, Retire Better Now points out that buyers in drought-prone Las Vegas might look for a home with low-water plants in a desert-scape yard, which negates the water necessary to maintain grass. There are smaller things to consider as well, such as installing a new front door or replacing a roof in desperate need of an upgrade. Do you need help paying for home improvements? Look into assistance for seniors from the U.S. Department of Housing and Urban Development.
· Be patient. Though you might be enticed by the stories of bidding wars and homes selling for far over their asking price, remember that while these stories are becoming more common, they are still the exception rather than the norm. Be patient and know that your home might be on the market for a while, even in a white-hot market. The buyers will come when the time is right!
No matter where you choose to go after selling your home, always take a medical alert system with fall detection with you! This provides valuable peace of mind no matter where you are, as it works in all 50 states and some areas of Canada and Puerto Rico. You can use it for ANY emergency—when you need police, fire, ambulance, neighbor, family, or friend. No matter where you decide to live, Alert1 gets you the help you need, wherever and whenever you need it.