Leisure World of Maryland has many different home styles, as I covered here. One of the most popular is their patio homes. That’s what they call their single-story, rambler-type homes.Read More
Real Estate Updates from Catherine
Hello readers! I apologize that it’s been forever since I posted, but I have been extremely busy selling houses, and it’s been tough to fit in writing and posting. But I do enjoy writing these posts and the clients I get to meet as a result of them, so I will try to post more frequently.
One of the questions I get asked most frequently is, if I already own a home, how do I buy a new home? I am happy to tell you some common ways to do this, but I urge you to talk to a loan officer or an accountant if you have detailed questions about the loan side of things. This list is not all-inclusive. It just contains some of the most common ways of making it work.
1) Put your current house on the market, with the understanding that your realtor (could be me if you live in MD, DC or VA) will tell whomever wants to write an offer on it that you need a 60-day rentback. Then, you settle (meaning you officially sell your home and collect your proceeds from the sale) in, say, 30 days, and then you have the next 60 days, while living in your current home, to find a new home, settle on that home, and move.
Advantage: This is the simplest way to make a move, in my experience. You have the money from the sale of your house, but you don’t have to move twice.
Downside: You have to be reasonably confident that you will find somewhere you want to move in that 60 days.
2) Take out a home equity loan on your current home to have a down payment for your new home. Then, take out a conventional loan to pay for your new home. Once you sell your old home, you pay off the loan (or pay off a lot of it, anyway).
Advantage: You can buy a home whenever you find one you love, and then sell your old home. You can even move into the new home first so you don’t have to worry about de-cluttering your old place, or leaving it all the time for showings. As I said above, you can get a conventional loan when you do this (rather than a bridge loan, which tends to have a higher interest rate and more fees), but you need to wait six months in most cases before you’re allowed to pay off the conventional loan.
Downside: You have to be able to qualify for another loan while you might still be paying off the mortgage on your original home. You might have two mortgages for a period of time, and you’ll have to be able to handle that.
3) Borrow or withdraw from your 401K or other retirement plan to buy your new home. When you sell your old home, pay back the money into your retirement plan. This is the option I know the least about, in terms of tax implications, interest, etc. If you are considering this option, I strongly recommend that you speak to an accountant so you fully understand how this works.
Advantage: You don’t have to sell your current home first. You can find a home you really want before selling.
Downside: There could be tax implications, and well as having to pay interest on the loan.
4) Sell your current home, collect the proceeds, and then rent a home until you find something you’d like to buy.
Advantage: You can take your time to find a home that you really love, and you have the money ready as soon as you find something.
Downside: You have to move twice. Enough said.
5) You put a contract on a home, contingent on your selling your current home.
Advantage: You can take your time to find the home you want, and you’re protected from being locked into the deal until you know that your home will sell and you’ll have the money to buy the new home.
Downside: At least in the DC metro area, it is very hard to find a home seller who will agree to this contingency. Desirable homes go under contract very quickly here, and most sellers don’t want to take on the risk of waiting for your other home to sell. Also, even if they agree to it, the contract will still have something called a “kick-out.” That means if any other buyer comes along and wants to put a contract on the home, you will have 3 days to come up with money another way, or lose the home to the new buyer. Now, most buyers don’t search for homes “under contract with a kick-out” so that gives you some measure of protection, but it’s still possible you’ll lose the home. This option does sometimes work if you find a home you want that’s been on the market awhile. But, you have to get your home on the market within 3 days of putting the new house under contract. It’s easier if your home is already on the market, or completely ready to put on the market.
First off, a little FHA “refresher.” The HECM, or Home Equity Conversion Mortgage, is just FHA’s fancy name for the reverse mortgage. You’ll hear terms like “HECM for Purchase” or “Reverse Mortgage for Purchase” or “H4P” or “R4P”. Just to be clear, these all represent the same product – the reverse mortgage.
In 2009, FHA began allowing the reverse mortgage for the purchase of a new home. Prior to 2009, the reverse mortgage could not be used to acquire a new home. It could only be used on homes that borrowers were currently occupying, and intending to continue to occupy.
With allowing borrowers to use the reverse mortgage to purchase a new primary residence, a new opportunity arose for homeowners looking to downsize to a new home. The best part is they could now do so with no monthly mortgage payments, and also give them the ability to just about double what they could afford as a cash buyer.
Let’s say we have a 67 year old borrower that wants to sell their existing home and purchase a new primary residence. Maybe it’s to move to a one level home, or maybe there’s too much land, or maybe it’s just to be closer to the grandkids. Regardless of the reason, they don’t want to stay in their existing home.
Using the HECM for Purchase, that borrower could sell their existing home, take the cash proceeds and use it as a down payment on a new home. There are a few substantial benefits to using the HECM for Purchase as opposed to paying cash and/or using conventional financing to buy the new home.
Benefit #1 – Increase the purchase price of the new home.
Using the HECM for Purchase, the borrower will get access to approximately 50% financing on the new home. Meaning, if the borrower has $200,000 in proceeds from the sale of their existing home, they could essentially double their purchasing power.
Example – Using the $200,000 in proceeds, they could afford to purchase a new home for approximately $400,000. The reverse mortgage would provide financing for approximately 50% of the purchase price ($200,000) and the borrower comes up with the remaining 50% ($200,000).
Benefit #2 – Keep more cash in reserves.
Let’s say the same borrower has the same $200,000 in proceeds from the sale of their home, but instead of using it all to buy a new home they want to keep some cash in hand.
Here’s how this would work….
Example – The borrower finds a $200,000 home they’d like to purchase. Instead of using all $200,000 of their proceeds to pay cash for the home, they use the reverse mortgage to provided financing for 50% of the purchase price ($100,000) and they come up with the remaining 50% ($100,000).
This would give them the ability to buy the new home, have no monthly mortgage payments and keep $100,00 of the proceeds in their control.
Benefit #3 – Income / credit qualification.
While there are income and credit requirements on reverse mortgages, they’re not the same as a conventional “forward” mortgage. The majority of reverse mortgage borrowers are at a stage in their life where they’re no longer working full time jobs and are instead living off of a “fixed” income (Social Security, pension, investment portfolios, etc.). Because a conventional type loan requires a monthly payment, the borrower normally doesn’t show enough income to meet the underwriting requirements for the new loan.
On a reverse mortgage, the lender is not required to calculate a monthly mortgage payment in to the equation, because there are none.
Instead of using an equation that calculates total debts and divides them in to the total income, the reverse mortgage simply requires an amount of “residual income.” In our area, it’s $529 per month for a one person household.
Benefit #4 – No monthly mortgage payments.
I think this benefit pretty much speaks for itself, so I’ll keep it short and sweet.
When a borrower initially tells us they want to pay all cash for their new home, that’s normally for one reason…
They don’t want a mortgage payment.
With the reverse mortgage, they have no monthly mortgage payments.
This article was written by Eric Rittmeyer with Fidelis Mortgage, and used with permission. For more information about using a reverse mortgage to purchase a home, please contact Eric at firstname.lastname@example.org or 410-668-6501.
Does Your Loved One Need Live-in Help or an Assisted Living Community?
Seniors who exhibit signs of Alzheimer’s and the symptoms of dementia may require different levels of support, depending on their condition and their living environment. Individuals with more severe problems who have trouble coping with activities of daily living such as eating, bathing and toileting, likely need in-home care assistance, while those who are aging in place and can handle basic tasks of everyday living may require help of a different sort. You should be able to tell the difference in the level of care your loved one requires by recognizing the signs of Alzheimer’s.
Deciding to seek outside help can be difficult. Some seniors may resist the notion that they need help, or they might have trouble adjusting to a live-in caregiver, even a friend or family member they’ve known for many years. Maintaining a loving, nurturing and patient relationship with your loved one can help build the trust that’s needed for a successful caregiving relationship to take shape.
Recognizing the signs
The warning signs of dementia and Alzheimer’s indicate a decline in cognitive functioning and a decreased ability to function normally. Bear in mind that it can be difficult to tell when something’s wrong. Memory loss, a common symptom, may seem to be nothing more than an occasional forgetfulness associated with the aging process. Someone with Alzheimer’s disease may forget a grandchild’s name, then recall it the very next day. In more advanced cases, people suffering from the debilitating effects of Alzheimer’s will forget things that happened a moment ago, what was just said in a conversation, or start repeating themselves because they have no recollection of previous verbal exchanges. Forgetfulness caused by stress or anxiety won’t repeat itself; in dementia, the problem will persist and progress as their condition worsens.
Frustration and anger will show up in mood swings and increasingly agitated behavior. It may also manifest as manic physical movements, such as pacing or waving their hands in the air, or gesturing angrily. It’s a common response to confusion and fear, feelings that are often present in people who struggle to make sense of their environment. Poor judgment and taking chances the individual usually wouldn’t is another sign of trouble, and can lead to injuries. Or they may suddenly struggle with activities that once came easy, such as cooking dinner or doing laundry.
Aging in place: care needs
According to AARP, over 90 percent of adults over 65 would prefer to stay at home rather than moving to a senior living community. Those whose symptoms are manageable and can still function, there are certain conditions that should be met if they are to remain at home. Isolation is a major problem with the elderly, so make sure that friends and family members live nearby. The physical characteristics of the living environment should meet certain standards. There should be adequate lighting, and no objects capable of causing your loved one to trip and fall.
Benefits of home health aides
If your relative is having trouble paying bills or maintaining acceptable personal hygiene, it’s probably time to bring in a home health aide. Your family member will benefit from the presence of a friendly companion and personalized care. In-home care allows your loved one to remain at home and retain a measure of independence. Home health assistants make sure that their care subjects take their medications as prescribed, eat a healthy diet, and get sufficient sleep.
Deciding on what level of care a loved one needs can be difficult. He or she may actively resist the idea and descend into even more troublesome behavior. Bear in mind both your relative’s condition and temperament as you determine the best option.
When moving is necessary
Although your loved one might prefer to live at home, selling their current home and moving them into an assisted living facility might be the best option, especially as the disease progresses. Those with advanced Alzheimer’s disease are prone to wandering, extreme confusion, and aggression, so a home environment might not be the safest place for them. Even with live-in help, caring for your loved one is stressful. Consider the fact that they might benefit more from having a team of individuals dedicated to ensuring their needs are met. Should you decide that an assisted living facility is the next step, keep the special needs of your loved one in mind. Tour several facilities to be sure the one you choose caters to Alzheimer’s behavior, and don’t forget to ask if they are equipped to work with late-stage patients, as some facilities will require a transfer.
June is the primary caregiver to her 85-year-old mom and the co-creator of Rise Up for Caregivers, which offers support for family members and friends who have taken on the responsibility of caring for their loved ones. She is passionate about helping and supporting other caregivers and is currently writing a book titled, The Complete Guide to Caregiving: A Daily Companion for New Senior Caregivers, due out in Winter 2018.
I frequently sell homes at Leisure World, and one of the most popular neighborhoods (called mutuals) there is The Greens. The Greens is made up of four high-rise buildings, located on the golf course, and within walking distance of Clubhouse II. Clubhouse II contains Leisure World’s brand new fitness center, as well as the indoor pool, the auditorium, the ceramics studio, and various game rooms and meeting rooms, so it’s a nice place to be close to. All of the buildings were constructed in 1984.
Each building in the Greens has a large meeting room with a kitchenette and a small library on the lobby floor. These meeting rooms are used for social events within the building themselves, and can also be rented out for private parties. Each building also has a parking garage attached to the lobby and the basement. Some condos come with a parking spot and some do not, so that’s something to pay attention to when buying there. Also, each condo has some storage space in the basement. Some condos come with storage rooms, which are about the size of a typical half bathroom in a home. Many condos just come with a storage cage, which is about the size of an old-fashioned steamer trunk. Again, that’s something to pay attention to when buying, if storage is important to you.
The monthly condo/community fee varies according to the square footage of the unit, etc. The monthly fee for all of the units includes almost all of the amenities at Leisure World (see my general post about Leisure World to read about those), as well as Basic Cable TV, Common Area Maintenance, Exterior Building Maintenance, Lawn Maintenance, Management, Master Insurance Policy, Reserve Funds, Sewer, Snow Removal, Trash Removal, and Water. The monthly fees for the units currently on the market range from $673 for 1115 square feet to $809 for 1530 square feet.
The prices for the units sold at The Greens in the last six months range from $122,500 for a 1-bedroom, 1-bath unit with 945 square feet, to 335K for a fully updated 3- bedroom, 2-bath unit with 1650 square feet and a garage space. Many of the units at the Greens have original kitchens from when they were built in 1984, which I believe makes their sale prices lower than in many parts of Leisure World.
Clients often ask me to see all floorplans available at the Greens. For your convenience, I am posting them here. You can see that every unit comes with a lovely three-season enclosed balcony. Almost all the units in all of Leisure World have a three-season enclosed balcony, which is a very popular feature.
If you or someone you know is considering moving to Leisure World, please feel free to contact me. I’d be happy to help!
Recently I was talking to a friend who's a Mortgage Consultant about the challenges retirees face when trying to obtain a conventional mortgage. He explained how assets can be used as income to qualify for a conventional mortgage. Here's how it works.
When a borrower is preparing to finance a new home purchase or refinance one of the key pieces of information a Mortgage Consultant uses for loan qualification purposes is the ratio of their debts to their income (DTI). Relying on the debt to income ratio can pose unique challenges to retirees as they are relying on alternative sources of income than a traditional paycheck. The three most common sources of retirement income for a retiree are Social Security, defined-benefits pension plans, and personal savings. Social Security and traditional defined-benefits pension plans provide a stable income source and are easy to treat as income, but for many people, this is only two thirds of the picture. Many borrowers have saved significant assets over their working lives with the expectation that they will consume those assets over time to supplement Social Security and pension income. How does a Mortgage Consultant account for the depletion of personal savings to calculate income level in retirement? The answer is Asset Dissipation.
Asset Dissipation is an income stream resulting from the assumed liquidation of certain asset types to meet the living expenses of the borrower. This can be used in addition to other income streams like Social Security and/or pension income to qualify for conventional mortgages.
Let’s work though the example of Sally, a recent retiree, to see how Asset Dissipation works.
Sally is retirement age and has $150,000 saved up in a 401K that she can draw on penalty free. To determine how much monthly income can be estimated to come from this asset we take 70% of the account balance to correct for fluctuations in the stock market and divide the remainder by 360. So…
150,000 x 0.70 divided by 360 = 291.67
The $291 generated through asset dissipation would be added to Sally’s Social Security income and pension income to more accurately capture her true monthly income.
If you're retired and interested in buying a home with a mortgage, please contact me and I can put you in touch with a mortgage consultant who can explain this and other options you might have.
As I wrote in my earlier article about 55+ Communities, there are actually many communities in the area to choose from. I already wrote about Leisure World. Another community that is very close to the DC area is Central Park at Victoria Falls in Laurel, conveniently located right at I-95 and I-200.
Victoria Falls was constructed beginning in 2006. It contains a variety of home styles – 112 detached single-family homes, 247 attached villas, and 250 condominiums. There are presently nine homes for sale at Victoria Falls. These range from a 2-bedroom condo with 1673 square feet, listed at 250K, to a 4-bedroom detached single family home with a double garage with 2177 square feet, listed at 495K. The single-family homes and villas all have a large master bedroom suite on the first floor, and at least a one-car garage. The condos all have elevators and parking in a covered garage at the bottom of the building.
Central Parke at Victoria Falls has a wonderful clubhouse that contains a large indoor pool, a library with computers, a fitness center, several meeting rooms, and a ballroom. The community also has a large outdoor pool, tennis courts, and walking trails. There are activities scheduled each day for residents, as well as field trips to different area attractions several times a month.
The community takes care of all outdoor maintenance of the homes, including snow removal, lawn care, and gutter cleaning. And, from what the staff has told me, unlike many 55+ communities, people can live there who are under 55, as long as all members of the household are at least 19, and one member is over 55. That offers some flexibility for families that might have adult children living with them.
Please contact me at Catherine.email@example.com or 202-352-4899 if you’d like to learn more about Central Parke at Victoria Falls, or other communities you could downsize into in the DC area.
I work with many people who want to buy a condominium or townhome, often because they don’t want the trouble of caring for and maintaining a yard, and all that entails (mowing, snow removal, etc.). Usually if you buy into a place with a management company (typically a condo or townhome), you will pay a fairly large condo or HOA fee. It is rare that I see these fees under $300 a month. These fees are not tax deductible, unlike your mortgage interest. When thinking about buying a condo or townhome, you need to factor the monthly fee into your monthly payment, when trying to decide what you can afford. So, high condo fees can sometimes depress what you might be able to buy. They can also depress what you might be able to sell the condo for, when the time comes. It is something to think about.
When you look at condo fees, it’s important to understand what they include. A $300 dollar fee that only includes snow and trash removal, can be a worse deal than an $800 dollar fee that includes all utilities and your real estate taxes, in addition to the general services you would expect. So, I wouldn’t necessarily advocate for a policy of only looking at homes with fees below a certain amount. Look at each place you’re interested in separately, so that you can see what the fee includes.
Some examples of what the fee could include are a pool (indoor or outdoor), a fitness center, a party room, a rooftop deck, a 24-hour concierge, utilities, your real estate taxes, covered parking, etc. Almost all fees include snow removal, trash removal, exterior building maintenance, and a master insurance policy for the building. Many include water. But think about what you want and what you will use. If you buy a single-family home but are going to pay for a gym, a pool, and a lawn service, maybe what you'd pay would equal or exceed the condo fees of a place you’d like that has all of those things on-site or taken care of.
The other issue to think about is that condo fees rarely decrease. They usually only go up. They might go up very slowly over many years, or they might quickly increase. When you put a contract on a condo or townhome, the sellers are legally required to order you a resale package (also known as condo docs) from the management company of the community. These documents will tell you about the financial health of the community, how it is managed, the by-laws, etc.. They will detail what is covered by your monthly fee and what is your responsibility. You have a certain number of days (it varies by state), to examine these documents and decide if you still want to follow through with buying the property. It’s important to look carefully at these documents and ask the management company any questions that you have, before this time period ends.
This article in the Washington Post does a good job of detailing how condo fees can get out of control with buildings that are old and need a lot of maintenance. https://www.washingtonpost.com/local/md-politics/condominiums-in-crisis-financial-troubles-put-many-communities-at-risk/2016/09/17/07ba32ac-6972-11e6-ba32-5a4bf5aad4fa_story.html?utm_term=.3539c8333cdf
In the end, a condo might be the right fit for you. But make sure you do your homework before you buy.
1. Find a Real Estate Agent to Represent You
It can be intimidating to know where to begin when thinking about buying a home. The first step is to find a good real estate agent! If you think you might like to work with me, please give me a call or send me an e-mail. I can come and meet with you and we can get to know one another, and see if we would be a good fit. You can also meet real estate agents, and get a feel for working with them, at open houses. Or, you can ask around for referrals. If you don’t live in the DC metro area, feel free to contact me and tell me what you’re looking for in an agent, and I’ll do my best to connect you with a good one in your area.
2. Get Pre-Approved for a Loan
Your real estate agent can recommend to you good loan officers that you can contact about getting pre-approved for a loan. In order to get pre-approved for a loan, you’ll need to provide the loan officer with various financial information so they can see how much money you are qualified to borrow. They’ll want to see pay stubs, W-2s, bank account statements, etc. They will be looking at your credit score, your debt-to-income ratio, what funds you might have for a down payment, etc. to decide you if can qualify for a loan. There are many programs available to help people buy a home, so don’t assume you won’t be able to qualify for a loan. Once you qualify, you’ll know how much you can afford to spend on a home, and you’re ready to get out there and start looking!
3. Find a Home you Want
Once you’re pre-qualified for a home, you can start house hunting! Think about how many bedrooms and bathrooms you want and need, and where you might want to live. Think about what you want to spend (it might very well be less than what a bank or mortgage broker says they will loan you). Then, get out there and start looking. Keep an open mind, and be prepared for the possibility that you’ll change your mind about what you want in a house and where you want to be. Sometimes you have to see several homes to better narrow down what you want. I recommend not seeing more than 4 or 5 homes at a time, so that you can keep them straight in your head and not get overtired. I also recommend thinking critically about each home as you finish looking at it. What did you like about it? What didn’t you like? How would you rate it on a scale of 1 – 5? I’ve had buyers buy the first house they looked at, and I’ve had buyers who have looked for years without buying anything. But in general, once you’ve seenaround 15 homes, you should have a good idea of what’s out there in your price range, and know when you’ve seen something you really like. Then it’s time to…
4. Write an Offer
We are currently (as of my writing this in March 2017) in a seller’s market. That means if you find a home you really like, chances are there are several other buyers who feel the same way about the home. So, by having the pre-approval letter already, you can write an offer on a home you like right away. Your realtor can look at comparable homes and help you figure out whether the home is over or underpriced. They can help you structure your offer in such a way as to be competitive with other offers as possible. And they can help you decide what contingencies you should place into the contract (like home inspection, financing, and appraisal contingencies). They also help sell your offer to the selling agent and the sellers.
5. Work through the Contingencies
Usually when you buy a home, your agent will put into the contract that you will do a home inspection within a few days of the sellers accepting your offer. This is a blog topic on its own, but basically you want an inspector to check and make sure there are no major issues with the home you’re buying. If issues do come up, you can either ask the seller to fix them, or cancel the contract. If you’re getting a loan, you’ll also need time built into the contract to make sure your loan is secured, and time to get the home appraised and make sure the home is worth the money you have offered for it (the appraisal is done by a professional appraiser). If it’s a detached home (not a condominium), you should also get a termite inspection. In general you need at least 30 days from the time a contract is accepted until you can close on and move into a house, because you need to have time for these contingencies.
6. The Walk-through
Within a few days of settlement, you’ll walk through your new home with your agent and make sure everything looks the same as it did before (generally at the time you did the home inspection, though it’s flexible as to what “before” you are specifying). You want to make sure the seller didn’t take anything that was supposed to stay with the house, that everything is still in working order, and that it is cleared out and “broom clean.” This is just an extra step to make sure no adjustments need to be made before settlement.
This is the day you officially get the keys to your new home! Most settlement companies now expect the money for the home and your closing costs (closing costs include taxes, title, deed, and loan charges, generally about 2 to 3% of the price of the home) to be wired to them the day before the settlement. They will tell you exactly how much you owe (cost of the home plus closing costs) about 3 business days before you go to settlement. So, at the settlement itself, you are just signing all of the relevant paperwork—there’s a lot!—and getting the keys for your new home. Often, in these days of e-mail and texting, it’s the first time you will meet the sellers of the home, though sometimes they’ve arranged to settle at a different time or do their signing through the mail, if they’ve already moved away. In any case, this is an exciting day! Plan to spend about an hour at settlement. Then, you officially own the home and you can move in whenever you like!
Leisure World is the only 55+ community in Montgomery County, MD. It’s located about 10 minutes north of the last stop on metro’s Red Line (Glenmont), and is about 30 – 45 minutes north of downtown Washington, DC by car. It is a very popular place for seniors in the area to live.
In order to live in Leisure World, at least one homeowner must be at least 55, and any other person living with the homeowner must be at least 50. There are more than 8000 residents in Leisure World, living in a variety of homes, from 1 bedrooms in high-rise buildings to 3 or more bedrooms in large detached homes. Prices range from the low 100Ks to the 500Ks or more. Every homeowner must pay a monthly homeowners association fee (which varies according to where you live), which includes basic cable tv, utilities, real estate taxes, snow removal, trash removal, yard care, and much more.
What else does the fee include? There are two clubhouses on the property, which house 3 restaurants, a fitness center, several indoor pools, an outdoor pool, an auditorium, game rooms, meeting rooms, and a ballroom. Outdoor activities include tennis courts, shuffleboard courts, lawn bowling, bocce, and croquet. There is also a beautiful 18-hole golf course and a driving range.
There is a medical center right on campus, with various doctors and nurses (and they take lots of different insurance plans). There is also a bank and a post office, and a shuttle system that brings you all around Leisure World. Right outside the Leisure World gates is a shopping plaza with a grocery store, a beer/wine/liquor store, and several restaurants, among other things.
Within Leisure World there are tons of clubs and activities to take part in. There are card-playing groups, drama and comedy clubs, political organizations, service organizations, gardening clubs, art groups, book clubs, etc. It is easy to make friends and stay busy at Leisure World.
It’s important to note that Leisure World is not an assisted-living community. Residents can bring in their own home health aides if they wish, but if they need care above and beyond what they are able to bring in, they might need to move to an assisted living community (there are several nearby ones, if residents don’t want to go too far from the friends they’ve made at Leisure World).
If you’d like to learn more about Leisure World, or see what’s available there, please feel free to contact me!
This past fall, I was showing homes to a couple who were looking for a bigger home for their family. We went to go and see two homes on the same street that were the exact same lay-out and design (this happens a lot in the DC area). The price of the homes, however, was 150K different, and we were curious as to why. The first home was vacant and the kitchens and bathrooms had been redone. That was the higher-priced home. They liked it a lot. We went into the second home with high hopes that they could buy it for a lot less and redo what they wanted to redo in their own style and taste.
The agent of the second home had told me that the seller would be home, along with a housekeeper. There were no cars in front of the home, but we knocked several times and waited. Then we decided the seller must have left for the showing, and I used the key from the lockbox to enter the home. I called out “Realtor! Hello?” when entering, as I always do in an occupied home. No answer.
This home was obviously lived in, and nothing had been done to prepare the home for sale. There were mounds of papers and knick-knacks piled on every available surface. The house was dark. My buyers felt ill-at-ease, but wanted to give the place a chance. After a few minutes of looking at the kitchen and family room, one of my buyers headed down the hall to look at the bedrooms. She came back in a terrible hurry. “There’s a man in the bed back there!” she whispered. The buyers immediately wanted to leave, so we did. Out in the front yard we ran into the “housekeeper” who was actually a home health aide. She had left for a few minutes and was just returning.
The listing agent for this home was obviously not used to working with elderly clients. Rather than simply telling me someone would be home, she should have explained the situation to me, i.e. there’s a bed-ridden man living there and he will be in such and such bedroom. Then I could’ve prepared my clients and it wouldn’t have been such a shock. Also, she had said the house would be messy, as they were preparing for an estate sale. I think it would’ve been better to do the sale and then put the home on the market. It is very hard for most buyers to look past a ton of clutter in a home. It is not an advantage to put a home on the market a few weeks earlier in the fall if the home is not really ready to be shown.
Perhaps it just wasn’t financially feasible for the man to move (I assume to an assisted living or long-term care community) before the house went on the market. But most of the time someone can swing a couple of months of a house payment (if there’s still a mortgage on the home), and a couple of months of assisted living. Then, they don’t have to worry about leaving any time the home is shown (which is extremely hard for many elderly or ill people). And they don’t have to worry about being home when buyers are coming to look at the home, which is an awkward situation for everyone. Also, the house is likely to be empty, or at least emptier, which will show much better than a cluttered home. As at the listing agent, if an elderly person is still living at home, I am very reluctant to move any furniture around for staging purposes, because I don’t want them to trip and fall because of the new furniture arrangement.
In the end, I think the elderly person makes up for briefly paying for the old home and the new home at the same time, because the home they’re selling will sell faster and for more money if it isn’t cluttered and no one is home during the showings. So if you or a loved one is in the situation where you need or want to move, consider moving before your home goes on the market.
If you have any questions or would like to talk further about this or other senior moving issues, please contact me at Catherine.S@lnf.com or 202-352-4899.
Brightview is opening a new senior living community in the heart of downtown Rockville. It will open in August 2017. A few weeks ago I met with Wendy Papuchis, the sales director, to learn about the lifestyle and service offerings the community has to offer.
Brightview West End will be walkable to many spots in downtown Rockville,including the library and the metro. It will have four different retail spaces of its own that can be used by residents as well as customers from outside the community. These include a café, a restaurant, and a salon. The community’s goal is to integrate itself into the city of Rockville. They hope to adopt a nearby elementary school and partner with them for various events.
There will be 195 apartments in total in the seven-story builiding. The community will include independent living, assisted living, and dementia care floors. There will be an underground parking garage for residents. Independent living will be on floors 4 – 7, and the seventh floor will be a concierge floor, with 24-hour concierge service and a turn-down service each evening. Assisted Living will be on floors two and three and include Enhanced Care, which is the highest level of care that assisted living communities can contain.
Brightview West End will be a leasing community. There is no large entrance fee. Residents will pay month-to-month, and simply need to give 30-days notice if they’d like to move out. The monthly rent is all-inclusive and includes all activities, transportation, housekeeping and linen service, and a flexible meal plan (for independent living the rent includes 30 meals a month (lunches or dinners) as well as a meal credit at the café for breakfast or lunch. Assisted Living and Dementia Care residents receive a full meal plan in addition to personalized care. A nurse will also be available 24 hours a day.
I look forward to visiting Brightview West End again when construction has been completed!
When planning for retirement you may face many uncertainties. How much income will you need year to year? Will you and / or your spouse experience a chronic illness? Or will you die prematurely? Many people rely on life insurance to provide a death benefit. But, did you know that some life insurance policies can also provide “living benefits”? A “whole” life insurance policy can do several things:
(1) it can accumulate money over time that may be taken out tax free in retirement,
(2) it can provide an increasing death benefit for a surviving spouse, thus allowing a retiree to spend and enjoy more of their wealth during retirement and
(3) a portion of the death benefit may be “accelerated” and used for costs associated with a critical / chronic illness.
If none of these scenarios arises, the death benefit can be used to leave a legacy to family, friends, or favored charity / education institution. Multiple solutions from one policy can simplify family finances and add value.
Using an accelerated death benefit to pay for costs associated with a chronic illness is an attractive feature for many retirees. Chronic illness onset and severe cognitive impairment are age‐related conditions – about 40% of those over age 85 have some form of cognitive impairment. It is estimated that by 2020, 81 million people (the majority older than age 65) will have two or more chronic conditions. The financial burden of care can be significant for family members and Medicare / Medicaid rules related to long term care are complex.
A life insurance policy with a long term care supplement can help a family cope with the costs of a chronic illness. Rather than spend from accumulated wealth ‐‐ IRAs, 401ks, investments – policy owners can simply take an “advance” on the death benefit.
Although rare, chronic illness can strike at a younger age. This long term care benefit is available to policy owners beginning at any age and can be accessed quickly and easily by completing a simple claim form. Many features make a life insurance policy more attractive than a long term care insurance policy. A “whole” life insurance policy has a guaranteed fixed premium for the life of the policy, whereas long term care insurance policy premiums may not be guaranteed fixed and can become unaffordable over time. Also, some owners of long term care insurance may never actually use the policy – and premiums paid will have been “wasted.” A “whole” life policy will always pay out – either for long term care, as a death benefit, or as a source of income in retirement.
This has been a guest post by Kathleen Finn, CFP®, EA. If you'd like to learn more about this topic, please contact Kathleen at firstname.lastname@example.org / 202-262-6085
During the first week of January, I got the opportunity to tour the Five Star Premier Residences of Chevy Chase. It’s located on Connecticut Avenue, just inside the beltway. Cindy Miller, a sales counselor there, was my able tour guide. Cindy has worked at Five Star for more than 22 years!
Five Star is a high-rise apartment building with one floor of assisted-living apartments, and the rest independent-living apartments. The independent-living floors have four different floor plans to choose from- a one bedroom, a one bedroom with study, a one bedroom with den, or a two bedroom apartment. Despite its location close to the city, many of the apartments have gorgeous wooded views of the property, or of their neighbor, Columbia County Club. Five Star is a leasing community—rates currently run from around 4,000 a month up to about 7,700 a month, depending on the size of the apartment. There’s a one-time community fee (currently $4000), when you move in. As with most senior leasing communities, residents can choose to move out with only 30 days notice.
Five Star has many different amenities located in the building. There is underground parking, an indoor pool, a beauty salon, a convenience store, an arts studio, a fitness center, and more! There’s a health center where doctors and physical therapists make regular visits to see residents. Independent Living has 24-hour concierge service available, and bi-weekly linen service and housekeeping. In order to make sure their independent living residents are safe, there are motion detectors in each apartment, as well as pull cords. Residents can also wear a pendant that has a button to push if they need help. Breakfast and dinner are provided daily to all residents in Five Star’s lovely dining room. Residents can also purchase lunch there, or choose to make their own lunch (as each apartment has a full kitchen). There is also a full calendar of activities and trips so that residents have lots of options for things to do.
Assisted Living is one floor in the building, and is generally filled by residents who need to move there from independent living. Assisted living residents can no longer live on their own safely, but also do not require complex, round-the-clock medical care. They are provided with assistance with the activities of daily life, such as personal care, transportation, and medication reminders.
A unique option that Five Star offers is a chance to try out life there without making a commitment. They have a couple different furnished apartments available for someone that might want to come and live there for a month to see if it’s for them. The person can stay for a month (and pay the month’s rent), and then decide if they’d like to move there permanently. I’ve met so many people who have a loved one who they think would be happier in a senior residence, but their loved one is reluctant to give up everything they know for the unknown. This is a great way to give someone a taste of life in this community without them having to make an immediate commitment.
Finally, I should mention that I got to have lunch in the dining room, and the food was delicious. I had a greek salad and a brownie sundae(!) but there were many options available. Five Star’s head chef formerly was a chef at Jaleo in the District.
For more information or to schedule a tour, please go to www.fivestarpremier-chevychase.com or call 301-915-9217. Or, if you’re thinking of downsizing and just want to discuss your options, feel free to contact me!
There are so many options of where and how to live once you become a senior. I’ve already written lots of posts detailing different independent and assisted living communities in the area. I’ve also written about senior villages, which offer you a way to stay in your home or move to one-level living in a mixed-age neighborhood, but still be able to take advantage of activities and resources for seniors. Now I’d like to examine more closely the 55-Plus (or Active Adult) Communities in the Washington, DC Metro Area.
55-Plus communities are for seniors who are in reasonably good health, and can live independently. At least one owner or resident must be 55 or older in order to qualify to live in a 55-plus community, and many have rules that prohibit children from living in the community. 55-plus communities offer seniors a way to be free of many home maintenance chores, to enjoy convenient classes, groups, and amenities that are aimed at them, and to make new friends with other like-minded people. Typically people would buy a home (or condo) in a 55-Plus community just like they would buy a home in a multi-age neighborhood, but the home association or condo fees are higher, in order to pay for the many amenities and services available in the community. There are also usually rentals available in 55-Plus communities, by individual owners.
I live in Montgomery County, MD, and many of the people around here are under the impression that there are no 55-plus communities in the area, other than Leisure World in north Silver Spring. There are actually lots of 55-plus communities in this area, but they are almost all 30 minutes or more from downtown Washington, DC. I will cover many of the communities in detail in future posts, but for now I just want to give you an overview of where they are.
In Maryland, there are 55-plus communities located in Silver Spring, Ellicott City, Laurel, Columbia, Odenton, Annapolis, Gambrills, Fallston, Marriottsville, Elkridge, Jessup, White Plains, New Market, Dowell, Bel Air, Waldorf, Catonsville, Severna Park, Frederick, Upper Marlboro, and Edgewater. As of now, there are at least thirty-five 55-plus communities located in the Washington-Baltimore Metro Area in Maryland. In the Metro Washington DC area in Virginia there are at least twenty 55-plus communities. They are in Fairfax, Woodbridge, West Springfield, Sterling, Lorton, Manassas, Ashburn, Bristow, Dumfries, Gainesville, Haymarket, Lansdowne, and Warrenton.
So, if you are willing to live in the suburbs of Washington, DC, there are a huge number or 55-plus communities to choose from. Please contact me with any questions or if I can help you begin a 55-plus (or other) home search in the DC area.
Shortly before the holidays I toured several homes of AlfredHouse, a boutique assisted living community based in Rockville, MD. AlfredHouse provides care for people experiencing aging cognitive challenges such as dementia, Alzheimer’s and Parkinson’s. Rhonda Thomas, the Marketing and Family Relations Director, was my enthusiastic and able tour guide.
AlfredHouse is somewhat unique in that it’s actually made up of a series of small homes—it is not one big building or complex. There are six homes in Rockville, two homes in Silver Spring, and one home in Derwood, with another under construction. These small homes have a more intimate, family-like feel than larger assisted living communities often do. That might make them a better fit for some people who are suffering from cognitive decline. The homes range in size from those that have 5 apartments, to their newest home, under construction, which will have 34 apartments. The apartments come in a range of different sizes and layouts. All of AlfredHouse’s homes have a staff-to-resident ratio of 1 to 4, so there is plenty of personal care and attention for each resident. There are daily activities for all residents, as well as home-cooked meals and snacks.
While at AlfredHouse, I was able to tour their newest (under construction) home, which is called Symphony House. Symphony House is unique in that it is designed for elderly people who have mental health challenges as well as cognitive challenges. Its design tries to incorporate as much natural light as possible. There will be a therapy room to deliver music, light, and massage therapy to residents. AlfredHouse will partner with CounterPoint Health Services, a leading behavioral health and memory care provider, to provide care to residents. Symphony House will be opening in early 2017.
Before leaving I was able to spend some time with Dr. Veena Alfred, the founder and Chief Executive Officer of AlfredHouse. Her passion for AlfredHouse and its mission was evident. AlfredHouse is definitely worth a look if you or a loved one might prefer a smaller-scale assisted living community, with an emphasis on a high staff-to-resident ratio.
Ways to Own Your Home
When you buy a house, you can title (i.e. own) your home in different ways, but each has its own advantages – and disadvantages that you, as a homeowner, should know. You can own the home in your name, with your spouse, or with someone(s) else. Here I shall discuss the pluses and minuses of when more than one person owns a home. When you own the home with another person and you each own 100% of the home, we call that joint ownership. Owning your home with your spouse (tenants by the entireties) is a form of joint ownership. When you own 75% of the home and someone else owns the other 25%, for example, that is known as owning the property as tenants in common. Each of these forms of ownership has drawbacks. First, if you own the home jointly with someone, the home is subject to creditors of either party. So, if your friend gets into a car accident, is sued and loses, the winner of that lawsuit might be able to force a sale of that home. Also, all of the owners have to agree to any proposed use of the property. Second, if all of the owners pass away then the house will go through probate. Probate is a lengthy process (at least nine months in Maryland) where creditors or unhappy friends/family can sue your estate. Additionally, the person in charge of your estate has lots of confusing paperwork to complete and file with the court under tight deadlines all while grieving over your passing.
What can you do to avoid these problems?
Consider a Trust
A trust is very similar to a Limited Liability Company (LLC) or a corporation. The trust is simply a way of holding assets and determining what happens to those assets in the future. Usually, the trust is designed so that children, loved ones, or a charity will benefit from the assets in the trust at some point in the future. The trust is managed by a trustee, who is usually the initial creator of the trust.
You should have your trust own your home because the trust protects the home and your other assets from probate. If the trust is structured properly, you might be able to eliminate capital gains tax on the sale of your home. An additional reason to move your home and other assets into your trust is to ensure that your children or loved ones inherit these assets and do so at the right time. One of the worst things that parents sometimes do is to leave their assets for their kids to receive all at once, and then they inherit when they are too immature to handle those assets.
If you are considering buying a home, you should speak with an attorney who specializes in trusts first so that we can properly establish your trust before you buy the home. Why? Because you are paying for the title company to properly list the owner of the home on your deed. If your trust is established before you buy the home, you can have the title company list your trust as the owner. If you buy the home in your name and then want to put your home into your trust, perhaps five years later, you will have to pay for a deed a second time.
In summary, the best way to own a home is in your trust. Through a trust, you can ensure that your heirs inherit the home at an appropriate time for them. A trust enables you to avoid probate and, in some situations, protect the home against creditors. Please give me a call (240-235-5070) or send me a note (email@example.com) if you would like my law firm to help you find an ideal solution for owning your home.
Many people I’ve talked to want to downsize from the home where they raised their children, but they don’t yet need the extra support of a Continuing Care Retirement Community or an Assisted Living Community. Many active seniors want to move to one-level living and be within easy walking distance of lots to do. They are thinking ahead to when stairs and driving might become difficult, but they also just want to really enjoy their retirement and/or empty nests.
In the DC area, there are many places that also have active Senior Villages. You can follow the link to read my blog about these (specifically the Capitol Hill Village), but basically, these are organizations that offer plenty of clubs and activities for seniors, in addition to volunteers who can help or support seniors when necessary. So, what areas in the greater DC metro area might be a good fit if you’re looking for these things?
In Maryland, the metropolitan centers of Friendship Heights, Rockville, Bethesda, and Silver Spring all fit the bill. They each have walkable areas that include grocery stores, restaurants, and shopping. They all have metro stops. They also each have senior villages (Rockville's is currently being developed), or community organizations that act as senior villages. The cost of real estate in these areas does vary somewhat, with Friendship Heights and Bethesda being more expensive, and Silver Spring and Rockville being less so.
Washington DC itself has many walkable areas, of course, and it would be hard to narrow down your options to just a few. But the areas with active senior villages include Capital Hill, Cleveland and Woodley Park, Dupont Circle, East Rock Creek, Far Southeast, Foggy Bottom West End, Georgetown, Glover Park, Mount Pleasant, Waterfront, Palisades, and Northwest. If you’re thinking about living in DC itself, it might help to narrow down your options by thinking about what you most like to do. Waterfront is a great area if you want to go to a lot of Nats games, Capitol Hill and Foggy Bottom are great if you want to go to museums frequently, etc.
In Virginia, the walkable areas in Arlington include Ballston-Virginia Square, North Rosslyn, and Courthouse-Clarendon. In Alexandria, the King Street Metro/Eisenhower Ave, Old Town, and Braddock Road metro areas all earn top marks according to Walkscore.com. There is an Arlingon Neighborhood Village and an Alexandria Senior Village, in addition to other senior villages in Northern Virginia.
So, there are definitely lots of options for people in the DC Metro Area who want to downsize and move to a more walkable community. I’ll examine some of these areas more closely in future blogs. Also, this is by no means an exhaustive list, so feel free to send me an e-mail if you think I've left an area out.
Please let me know if you’re thinking of downsizing and buying in a walkable community. I’d be happy to help!
Often I meet with people who know they want to move to a smaller place, but they’re totally intimidated by how much stuff they have. They know they need to begin going through their things and paring them down, but they just don’t know where to start. If you’re in that situation, here are some tips for getting started.
1. Start with the smallest or least-used room in your house.
There are two reasons behind this. First of all, it is less intimidating than starting with a large room, or a room you use a lot. Secondly, once you have finished the downsizing process in that room, you can use it as a storage space for boxes, etc. that you’ve packed, without disturbing your daily life or routines.
2. Make a realistic daily goal for yourself
The hardest thing about downsizing is getting started. Make a daily goal to get yourself motivated. Tell yourself that you will do one drawer a day. Or that you will work on downsizing for half an hour a day—something like that. Make sure it’s a realistic goal, so that you can really stick to it.
3. Divide your things into three piles
The three piles I recommend are keep, throw out, and give away. You might decide to have two give-away piles—one for charity and one for items you want family or friends to have. Don’t let yourself have a maybe pile! Try to touch everything just once, and make a decision that way. I should add that if you think you have a number of things that could be valuable, don’t hesitate to call in an estate sale person and ask their opinion on your possessions. I know of some great estate sale people or organizers who can help you determine if it might be worth it to sell some of your things. Feel free to contact me for more information.
4. Remember your Motivation
For many people, the main thing that stops them from moving to a smaller place is not wanting to let go of their possessions. Even knowing they might be happier in a home with no stairs or in a senior living community is not enough to help push them to pare down their things. Don’t let your possessions weigh you down. Allow yourself a small box of sentimental items, but beyond that, consider giving the things that are sentimentally important to you to family or friends. Remember, you will have to pay to move everything you decide to keep. By letting go of things, you will have a cheaper, easier move, and have more room for living in your new place.
5. Clear as you Go
As you sort through your things, store packed boxes you plan to move in the rooms you have finished packing. But make an effort to put the throw-out pile by the curb once a week. Give a bag to charity as soon as you fill it. Have a family-and-friends get together where you display all of the things you’d like them to have and let them choose what they’d like (have them pick numbers and pick things in turn if you don’t have specific people in mind for each item). Seeing your rooms looking cleaner, more organized, and emptier will serve as continuing motivation for you to keep downsizing.
If after reading these five tips you still can’t get started, consider hiring a professional. An organizer, senior move manager, or estate sale person can come in and help you decide what to keep, sell, or throw away. If you’re not sure that you want to hire someone, it doesn’t hurt to bring in someone and talk to them about what they could do to help. Then you will have a better idea of where to go from there. I am also always happy to come and meet with you in your home to help give you an idea of how to get started or whom you might want to bring in to help. Please don’t hesitate to contact me. Good luck and happy downsizing!
Earlier this month I was able to tour Olney Assisted Living with Rhonda Thomas, their Marketing and Family Relations Director. Rhonda was extremely knowledgeable and friendly, and would be a great resource for anyone who wants to learn more about Olney Assisted Living.
Olney Assisted Living is an all-memory-care community. Its Executive Director is a Certified Dementia Practitioner. It has 64 beds in total. The Community is divided into four houses, with 16 residents each. Each house has its own dining area and lounge. There is 24-hour nursing care, and programming throughout the day to keep residents active and engaged.
Olney Assisted Living is somewhat unusual in that 60% of its residents are male, and there are quite a few residents there with early onset dementia. They have great, secured outdoor space to make sure the residents are getting the exercise and fresh air that they want and need. There is a walking path, and even an outdoor putting green.
Olney Assisted Living is a fairly new community—it’s only been open for a couple of years. So the building and facilities are in great shape. It’s a leasing community, meaning you don’t have to buy anything to live there. You just pay an initial community fee (currently around $4500) and then pay monthly for your apartment and care. There is also a respite stay program, where you can have a loved one stay there for two weeks to a month.
Many thanks to Rhonda for taking the time to meet with me and show me around the community!