September 2000


	4 S E N I O R S O R A N G E C O U N T Y . C O M

	Welcome

Silver Edition...
News & Issues for the Mature Market

Barbara Delgleize
Seniors Real Estate Specialist

September 2000

REAL ESTATE MATTERS
November 2000

Where Do You Want To Live?

Many retirees continue living in the same city where they built their careers and raised their families. Others, freed from the ties of employment, are enthusiastic about relocating to a new community. If the idea of a new lifestyle in a new hometown appeals to your sense of adventure, here are some questions to ponder before you make your move:

	Do you prefer a sunny setting, a rainy climate or a snowy winter environment?
	Would you enjoy living in an active seniors community? Near a college campus? Closer to your children or grandchildren?
	Would you enjoy living in a community with a golf course, a tennis club, a swimming pool or other activities for seniors?
	Would you like to live in a home that's smaller, larger or the same size as your current residence?
	Would you prefer a detached home or a condominium?
	What type of floor plan would suit your lifestyle? Do you need a guest bedroom? Extra storage space? A large kitchen? A gardening plot?

Source: "Guide to Retirement Living," Summer/Fall 1999

Installment Sale Generates Cash Flow

Installment sales of real property are usually thought of as a tax-planning strategy, but selling your home over time instead of all at once also can be a means to increase your monthly cash flow.

Consider this example: A widow sells her home and nets a profit of $100,000. She invests that sum in a certificate of deposit at, say, 6 percent interest and earns $500 a month. If the same transaction were structured as an installment sale at, say, 8.5 percent interest, she would receive $708 a month. That's an additional $208 each month or approximately $2,500 a year.

Despite the bottom-line benefit, a surprisingly large number of seniors sell their home for cash and stash the proceeds in a passbook savings account or other low-risk asset. A seniors real estate specialist can explain the installment sale to you in greater detail.

Source: Senior Advantage Marketing Council

Is Your Home Smart Collateral?

Using your home as collateral for a loan is a risky undertaking because if you become unable to make the loan payments for whatever reason, the lender can collect your home instead. This risk is one reason why the federal Home Ownership and Equity Protection Act (HOEPA) mandates certain protections for consumers who obtain a high-cost loan, as defined by law. These protections are as follows:

	The lender must make certain required disclosures at least three business days before the loan transaction closes.
	It's illegal for the lender to disperse loan proceeds directly to a home improvement contractor.
	A high-cost loan cannot have a balloon payment or a big final payment that's due sooner than five years.

Be sure to consult a trusted attorney, financial advisor or other qualified person before you obtain a loan secured by your home. If you ever have second thoughts about a loan transaction, contact an attorney immediately. Acting quickly may preserve a right to cancel the loan.

Source: "Using Your Home as Collateral for a Loan," AARP

What Home Buyers Want

If you're thinking of remodeling your home, perhaps with an eventual sale in mind, it pays to catch up on the latest trends in home design. Homes haven't changed much over the years on the outside, but interiors are vastly different from the way they were decades ago.

Some of the transformations are due to the changing demographics of home buyers. Median family incomes have increased, enabling families to purchase bigger homes with more amenities. At the same time, many more single people are buying their own homes.

Despite the overall aging of the nation's population, two-story homes are in vogue, as are larger homes with more bedrooms and bathrooms than the traditional single-family residence. Builders are eliminating formal living rooms from new homes while adding bigger kitchens, walk-in pantries, vaulted ceilings, outdoor decks and patios, home offices and media rooms.

Source: "Homebuyer Preferences Changing," Real Estate Center at Texas A&M University.

Harvard University Reports on Senior Housing

A new study, Housing America's Seniors, by the Joint Center for Housing Studies at Harvard University examines a variety of issues the next generation of seniors will face. Tomorrow's seniors will live longer, healthier and wealthier lives, but won't be able to escape the consequences of aging.

Significant findings include:

	Only 10 percent of today's seniors live in age-restricted communities and only one-third of those seniors live in settings that provide services.
	Approximately 10 percent of seniors need to move in with someone else or have someone else move in with them for the express purpose of giving them assistance.
	Only half of today's disabled seniors have the home modifications they need.
	Most seniors lock in their choice of housing before they become 60 years old. That means Baby Boomers are making their long-term housing choices now.
	Tomorrow's seniors may be more mobile and likely to own second homes due to their greater wealth, better health and life experiences with long-distance moves.

Source: Joint Center for Housing Studies

Seller Financing: Tips for Home Sellers

Seller financing has long been a viable strategy for home sellers who prefer monthly cash flow to a lump sum payment on the sale of their home. Yet some sellers are uncomfortable with the idea of carrying a mortgage for the buyer. Here are some suggestions that can increase the seller's comfort level:

	Require a large down payment, maybe even as much as 25 percent, from the buyer.
	Review the buyer's credit history before sealing the deal.
	Include a provision in the loan agreement requiring the buyer to reimburse the seller for any collection-related attorney's fees.
	Include a late-payment penalty in the loan agreement.
	Include a prepayment penalty in the loan agreement.

The worst-case scenario would be for the buyer to default on the seller financing. If that happens, the seller can foreclose on the home and resell it to another buyer.

Source: "Pros and Cons from a Seller's Perspective," NoteWorld.com

Source: “Guide to Retirement Living,” Summer/Fall 1999

Of course your comments are welcomed.


	Back Issues

As a SRES® Realtor I am here to assist you as a valuable resource for answers to specific planning questions and solutions to problems you may face.

My exclusive Senior Advantage Real Estate Discount Program can assist you in reviewing the options available to you when you decide to sell a piece of property and in saving you literally thousands of your hard-earned dollars at sale.

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