By Duane Duggan, Realtor, RE/MAX of Boulder
Published in the Daily Camera’s At Home section on Oct 4, 2019
Baby boomers are retiring and downsizing their homes at record rates. “Aging in place” is a common catch phrase for seniors, meaning growing older in their own homes. However, there comes a time for many seniors when their large, two-story house with a basement and landscaping just isn’t the ideal place to live anymore. Moving to a smaller ranch-style home or condo can be a better interim solution before transitioning to a senior community where there is high level of assistance with daily chores and activities. Once in a smaller home, there are many outside services available to help seniors stay as long as they choose to or are able to. Services might include lawn care, meals, companionship, transportation, grocery delivery, medication delivery, and even nursing care. As a consequence of aging baby boomers and the availability of senior services, the demand for new ranch- style, low-maintenance homes is higher than ever before.
The sooner you start planning, the easier the process of downsizing to a smaller home will be.
Consult your REALTOR®
Your REALTOR® can help you with an estimate of what your current home might sell for and what a smaller home might cost in the area or neighborhood you are considering.
Consult Your Financial Planner and Mortgage Lender
These professionals can help you with a variety of decisions such as:
-Should I pay cash for the downsized home from the equity in the old home?
-Should I get a new mortgage on the downsized home and invest the cash from the equity in the old home?
-Should I buy the downsized home with a reverse mortgage so I don’t have any payments?
Consult Your Tax Advisor
Be sure to consult with your tax advisor to see if you will have any tax liability on the sale of your personal residence. In many markets, the gain exclusions of $250,000 Single Person and $500,000 Married Couple shelter your gains from taxes. However, in a high-cost market like Boulder, the gains are often larger and there could be a large tax liability, which will affect your decisions.
Consult Your Estate Planning Attorney
Your estate planning attorney can help you in making decisions on how you might hold title for the downsized house and plans for the home after you pass on.
Picking the Geographic Area
In a high-priced area like Boulder, it is often difficult to downsize in a way that makes financial sense. In many cases, it works well to sell a home in Boulder and move further east to a smaller home in a less expensive market. Once you pick an area that works financially, there are other factors to consider as you make your decision. One of the main factors includes access to infrastructure such as grocery stores, medical care, and proximity to the activities you love.
Consider Buying a Ranch Style Home and Using It as a Rental Long Before You Need It
The cost of real estate continues to rise over time. If you are thinking of downsizing in 10 years and you find the perfect ranch style home to retire in, why not buy it now? You can rent it out for 10 years, and then when you are ready to move, you can renovate it or update it so that it suits your needs.
You’ve Made the Decision to Move, Now What?
Many seniors have been in their home for decades. During the that time, you may have accumulated a great deal of furniture and belongings, making it difficult to move to a home half or 1/3 of the space. Speaking of stuff, if you’ve never heard George Carlin’s skit on “Stuff in our Homes”, you might listen to it and get a laugh!
Start with the Easy Stuff
You may have raised five kids in a five-bedroom house with five beds and several sets of sheets for each bed……well, you get the idea. If you are moving to a three-bedroom house, you might use one bedroom for yourself, then have a guest bedroom and an office or gym – and you won’t need so many sheets! Start by getting rid of the sheets and the extra stuff you would rather not haul to your new home.
Move on to the Harder Stuff
More difficult items to get rid of are usually located in the basement, attic, and garage, such as mementos. In the basement, you might have your child’s artwork from kindergarten. In the attic you may be holding onto sentimental belongings from your parent’s house. In the garage you might have 40 years of tools you’ve been collecting. You might make a list with three columns: what will be moved to the new home, what needs to end up in the dumpster, and which items to give away to family members. Again, the sooner you start the better.
As I write this, I’m sitting near an antique clock, which was a wedding gift for great grandparents. My mom gave me this clock when she moved out of her home of 66 years and didn’t have room in the new place. Consider giving legacy gifts to family when you are downsizing, not after you are gone.
You’ve Packed, You’ve Sorted, and You’re Ready to Move
You might have friends and family members who will help you pack up and drive a rental moving truck. If not, you might consider checking out a member of the National Association of Senior Move Managers to help coordinate your move. You can find information about them on their website at: https://www.nasmm.org/find/index.cfm
Senior Real Estate Specialist (SRES)
REALTORS® have made an effort to learn about senior housing choices to help families with their needs. In fact, the National Association of REALTORS® (NAR) have created a designation, Senior Real Estate Specialist (SRES). These REALTORS® have made a commitment to educate themselves to specifically help seniors with the financial and emotional challenges of selling their family home and move to the next chapter in their lives.
Save the Date! Aging at Altitude Expo
Learning more about housing options and senior services is very easy here in Boulder. The next Aging at Altitude Expo hosted by the Daily Camera is rapidly approaching. It will be held at the Boulder Jewish Community Center, 6007 Oreg Ave. in Boulder on Saturday, November 2nd from 9:30am to 2:00 pm. A wealth of information and resources will be presented. Speakers will discuss topics including planning for senior living, senior health, elder law, financial and retirement planning, and staying active in your senior years.
About Duane Duggan:
Duane Duggan has been a Realtor for RE/MAX of Boulder in Colorado since 1982 and has facilitated over 2,500 transactions over his career, the vast majority from repeat and referred clients. He has been awarded two of the highest honors bestowed by RE/MAX International: The Lifetime Achievement Award and the Circle of Legends Award. Living the life of a Realtor and being immersed in real estate led to the inception of his book, Realtor for Life.