Older Adults Selling Their Homes Faces Challenges

And yes, we can do something about it, together. This information is especially helpful for older adults selling their homes.

For the past several weeks, AgePros has examined various aspects of aging in place: Simple changes that can quickly prep a home, the ever-growing role technology plays in making the strategy a success, as well who may or may not be the best candidate for aging in place.

That last point is of particular significance. Aging in place isn’t right for everyone. Which make something else we recently learn particularly disturbing:

an 80-year-old could get 5% less for their home than a 45-year-old.

When selling their homes, Americans 70 years and older often get less money than younger homeowners. For example, an 80-year-old seller can get an average of 5% less than a 45-year-old.

We had no idea and want to better understand the challenges facing older adults selling their homes. Evidently, so do the Federal Reserve Bank of Philadelphia, HUD,Research at Boston College and other institutions. (Links to resources appear at the end of this post.)

A variety of factors drive this value discrepancy. But as you’ll see, the issues are often a matter of human nature bumping up against the nature of the real estate market.

Still, a home is often a family’s most valuable asset — the foundation for building wealth and ensuring financial security in people’s later years. Understanding the forces preventing older people from reaping the fullest rewards when selling a home empowers AgePros to help clients avoid a financial mistake with potentially large implications.

There’s a reason older folks get less for their home. Actually, many reasons.

Here’s a brief look at some of the ways the realities of aging, and the real estate market, work against older adults selling their homes:

Differed maintenance — research shows elderly homeowners consistently under invest in their properties. After living in the same home for many years, it’s natural to not worry about — or even see — things like peeling paint, tired landscaping and cracked driveways. Still, this very understandable bit of human nature can result in a 25% difference in sale price.
Changing tastes — even well-maintained homes may feature elements that are now that today’s market finds less desirable. (Tropical kitchen colors anyone?) Additionally, homes from previous generations rarely feature current “must-haves”: Things like kitchens designed for entertaining, en-suite bathrooms and entertainment rooms. Post COVID, buyers are particularly wary of the increased costs and time associated with extensive home renovations.
Outdated knowledge — in many instances, it’s been decades since older sellers participated in the housing market. They simply may not fathom how much even a modest home has appreciated in value. This makes them susceptible to accepting low-ball offers (often proffered by entities buying the home as an income-generating investment.)
Transaction type — real estate agents are more likely to list older sellers’ homes through private or “pocket” listings, as opposed to the traditional Multi-Listing Service (MLS.) While the former can lead to faster, all-cash sales, they also result in a lack of awareness which works against sellers getting the best price.

Other factors play a role as well. For instance, many older Americans possess an ingrained frugality. Good for them. Still, this default to put off spending can stand in the way of making modest investments that yield outsized improvements in sale price.

OK, now what? First, let’s all get better acquainted with the challenges older home sellers face. Selling a home is a momentous event. Your clients and their families may even benefit from a Senior Real Estate Specialist. Your informed perspective could help a client make smart choices that positively affect their options and quality of life for years to come.

Here are links to more background material on the subject.