Does Downsizing in Your Senior Years Make Sense?

Two Seniors

When you compare the cost of living in a large home versus a small home, it’s easy to see that there are definite benefits of living with less. However, aside from money, there are many reasons that seniors might want to downsize to a single-story one- or two-bedroom house. The process requires work, but it is often worth the hours that you put into it. If you’re thinking about your long-term living situation, keep reading for information that can help you stay independent.

The Pros

There are obvious financial benefits of living in a smaller home. First, you can often use the proceeds from your existing property to pay cash for a new place, which will help eliminate having to pay a monthly mortgage. Next, the utility and maintenance costs are considerably less, especially when your new home is actually new. 

Specifically for seniors, moving to a smaller space can have emotional benefits as well. HomeAdvisor explains this idea quite nicely by citing that “[h]aving fewer financial- and maintenance-related responsibilities will allow you to focus more on your happiness and less on your home.” You will also have the peace of mind knowing, depending on the house you choose, that you don’t have stairs or other obstacles to contend with if your maneuvering abilities aren’t quite what they used to be.

What Do You Need?

More than just a one-story living area, there are other things to consider when picking a new home. Make a list of amenities that are important to you; this might be a neighborhood with lots of other seniors or easy access to public transportation. Diane Benson Harrington of BobVilla.com further cautions that you will need to determine how much work, if any, the home needs. It may be necessary to add a few senior-friendly touches, such as lowered kitchen cabinets or wider doorways. Don’t neglect to consider these costs when viewing houses. Major renovations may take time, which can also delay the sale of your current home causing a potential issue if you need the equity as cash in hand.

Making It Happen

As we touched on previously, there’s a lot of work that goes into moving, even when you’re going to buy a smaller house. Planning in the early stages is essential and will keep you from hitting bumps in the road to the next chapter of your life. It’s usually best to tackle the emotional aspects of moving before you get down to the nitty-gritty.

If you lived in your current home for many years, you’ve made memories, and that can definitely be hard to walk away from. Plus, you’re going to have to figure out what to do with the stuff that you can’t fit into fewer square feet. Something that might help is to remind yourself that the home’s next family will make just as many memories as you. In a sense, you are making room for the next generation to raise their children in a loving home.

As far as your personal belongings go, that can be considerably more challenging. Chances are, you have family heirlooms that hold an incalculable sentimental value. Unfortunately, your grandmother’s hutch may not fit into your new space. Before you start looking for a new house, pull your children aside to discuss which items they might like to have. Keep in mind, though, that many in the younger generation have minimalist tendencies and likely have no emotional attachment to things that belonged to people they never met. Plan an estate sale for anything that’s left that won’t be making the move along with you. 

For many seniors, staying in their current home isn’t an option. If you fit into this demographic, you’re going to have to make a decision on where you want to go. Although there are numerous options, when you want to remain independent, buying a smaller home makes sense.

Contributed by Mike Longsdon

As-Is. What Does It Really Mean?

NV Assoc of Realtors

Tiffany Banks, General Counsel

Reprinted for Real Estate Lake Tahoe Stiles

What does it mean when a property is being sold as is?  Does that mean that the buyer takes the property as it is with all defects it may have?  What does that mean for the seller?  Does the seller say once the property is transferred, they are free of any risks and liabilities because I sold it this way?  We are seeing more properties being sold this way and wanted to break down these issues so you as a REALTOR® can understand what this means for your client.

How does a court interpret an as is clause?

The courts often interpret an “as is” clause in a contract to imply that a property could be defective.  This means that the seller wishes to sell the property in existing physical condition it is in and the buyer is agreeing to accept that condition when making an offer.

Is a seller still required to disclose known defects?

Yes.  Just because a property is being sold as is, a seller must still make disclosures they normally would on defects with the property that they know about it. Every sale of a residence MUST include the Seller’s Real Property Disclosure form (SRPD) in accordance with NRS 113.130. There are very few exceptions, and the inclusion of an “as is” clause is NOT an exception. A seller may not insert an as is clause into a contract and assume that they are safe from claims for property defects.  We always say, “disclose, disclose, disclose” and there is a perfect buyer for every property.  A broker should warn sellers that selling “as is” is not a shield from claims of misrepresentation, fraud or nondisclosure. 

Does a buyer still have a right to inspect the property?

Absolutely.  Just because a property us being sold as is, doesn’t mean that a buyer can’t (or shouldn’t) inspect the property.  If a buyer needs even more of a reason, this would be it.  When representing a buyer in an as is transaction be sure that they take adequate time to do due diligence and necessary inspections, so they have an idea of the actual property condition.  Unless the contract specifically says otherwise, the buyer is entitled to cancel the contract based on items discovered during the inspections.

So, what DOES “as is” mean? 

The simplest way to explain this is that by selling the property as is, the seller is saying that they won’t make any repairs.  It is that simple.  They still have to disclose all known material facts and defects relating to the property. 

Can a buyer still ask for repairs to be made that they discover during due diligence?

They can, however the seller is asserting that they want a buyer to take the property as it is and not have to make any repairs.  We would recommend advising the buyer to seek appropriate counsel regarding the risks of buying a property in “as is” condition. 

Statements made by the Nevada REALTORS® Legal Information Line attorneys on the telephone, in e-mails, or in legal e-news articles are for informational purposes only. Nevada REALTORS® staff attorneys provide general legal information, not legal representation or advice regarding your real estate related questions. No attorney-client relationship is created by your use of the Legal Information Line. You should not act upon information you receive without seeking independent legal counsel. Information given over the Legal Information Line or in these articles is for your benefit only. Do not practice law or give legal advice to your clients! Inform your clients they must seek their own legal advice.

Like-Kind Property

IRC Section 1031 limits like-kind property to only certain types of real property. The term like-kind property refers to the nature or character of the property, rather than its grade or quality. Real property must be exchanged for like-kind real property. Furthermore, real property held for investment can be exchanged for real property used in a trade or business or real property held for use in a trade or business can be exchanged for real property held for investment.

WHAT IS EXCLUDED?

Personal property is not eligible for 1031 exchange tax deferral.

Regarding real property, a taxpayer’s primary residence and property held primarily for resale or dealer property are excluded from tax deferral under Section 1031. Section 121 provides tax exclusion for a taxpayer’s primary residence held for two (2) of the past five (5) years.

QUALIFYING REAL PROPERTY

The types of real property which can be exchanged under Section 1031 are very broad. Any real property held for productive use in a trade or business or for investment, whether improved or unimproved, is considered like-kind real property. Examples of like-kind real property include:

  • Unimproved property for improved property;
  • Fee for a leasehold with 30 or more years;
  • Vacant land for a commercial building;
  • Duplex for a retail property;
  • Single-family rental for a multi-family apartment;
  • Conservation easement for warehouse to be used in the taxpayer’s business;
  • Industrial property for rental vacation property in a resort area.

Chase International Luxury Home Tour

2412 Cornice Ct.

The Chase Luxury Home Tour was a huge success last week.  There were literally hundreds of folks who attended our Open House Event.  I held one of the South Lake Tahoe luxury home’s open at Montgomery Estates.  Over-the-top features and amenities were featured throughout this 7,386 SF masterpiece with extraordinary views of Mt. Tallac, Cathedral Peak and Lake Tahoe. The residence is listed at $3,795,000.

Buyer loses $40,000 in Earnest Money Deposit Scam

scam alert

In March we reported that a wave of earnest money deposit scams had reappeared and warned brokers and buyers to be vigilant. Here in June, these same scams are still occurring, and the perpetrators are absconding with even larger deposits. 

This type of scam does not involve cybercrime, email phishing or identity theft. It’s an old-fashioned scam that appears to follow the same basic format.  An agent claims to have a listing for a short sale (or probate or other distressed property), but the property cannot be shown. After acceptance of an offer, the buyer makes an initial deposit usually in the $5,000 to $10,000 range, but as high as $40,000, into the listing broker’s non-independent broker escrow.

As with most short sale or probate properties, the process can take several months, and the buyer’s agent is assured that the listing agent is working towards lender approval – it is just taking more time.  Then the communication slows down, the selling agent begins to get concerned and calls the listing broker’s escrow.  There is no answer, no return call, no other number to contact, and the earnest money deposit is gone.

This scam is nearly the same as a series of scams that appeared in the Los Angeles area about two years ago. The Los Angeles County sheriff eventually arrested the wrongdoers but only after millions of dollars had been lost.

Originally Posted by California Association of Realtors

Sierra Colina

sierra colina

Sierra Colina is a planned unit development community offering 44 residences on an 18 acre site located less than a mile from the Heavenly Gondola and the south shore of Lake Tahoe. Located next door to Lake Village, Phase One includes 10 units which should be available soon for purchase with their least expensive model, the Meadow starting at $1,500,000. It includes 3 bedrooms, 2 full baths, 2 half baths and a 2 car garage. The model is approximately 2193 SF in size. For additional details or floor plans contact Robert Stiles. Thank you.