How CPAs Can Help Clients with Real Estate and Residential Changes

By Nikki Buckelew, Ph.D.

Accounting professionals are often called upon by their clients with questions concerning residential changes. Those nearing retirement or on a fixed income often need to know what the financial and tax implications might be should they sell a longtime family residence, a second home or real estate included in their portfolio.

Most financial advisors will have little issue with managing questions involving the dollars and sense of buying, selling or leasing a typical home. It’s when the conversation turns to the complexities of late-in-life relocations that CPAs may find themselves in uncharted territory. It’s one thing to navigate affordability and tax consequences, but it’s another to guide someone who is grieving the loss of a spouse, moving across the country due to caregiving needs, or downsizing due to mobility challenges or other health concerns.

Where not to start

Not only are the logistics of relocation complex, especially for those who are downsizing from a longtime residence, but the emotional and psychological implications can also present significant challenges for clients and their family members.

The first instinct for most is to simply type their questions into a search engine. Ideally it would spit out any number of resources for such support, but unfortunately, this isn’t usually the case. In fact, it can create even more confusion and cause unnecessary expense.

There are a few things advisors should know before helping their clients with online searches for senior living options, relocation services or real estate needs.

1. Online senior living locator services such as A Place for Mom are in the business of gathering, selling and disseminating data with little to no regard for the impact on the consumer. Once someone has subscribed to such a list, their data is immediately passed along to other sites and providers who will literally inundate the consumer with unwanted calls, emails, letters and texts.

2. Placement agencies and referral services that are more localized offer more hands-on help than the online sites; however, this may come at a cost that isn’t typically disclosed. Agencies such as this are compensated by communities with which they have contracts. This means that while the consumer may think it is a “free” service, the place they elect to move to is obligated to pay for the placement. This gives them less negotiating room, fewer incentives or perks, and can even cause them to be skipped on waiting lists of high demand communities.

3. Home investors are preying on vulnerable older adults who are uninformed as to current home values. With real estate inventory being the lowest in decades, professional home buyers are now calling themselves “senior transition specialists.” They offer free services, fast cash, no fees, and a quick sale to seniors who need to make a move, while paying only a fraction of the home’s value. Unlike REALTORS®, who are required to disclose their licensure and treat clients with honesty and fairness, investors have no such obligation and are not regulated in most states.

When to make the move

Once a decision is made about where to move, the next questions typically involve how to make the move less overwhelming and more manageable.

People tend to assume they need to put their home on the market and get it under contract (or even closed) before moving. It’s counterintuitive, but the fact is it’s generally better to move first, get settled into the new place, empty the previous home of any remaining items and then sell.

Approaching a late-life move from a longtime residence in this order reduces stress, decreases decision fatigue and lessens the likelihood of relocation related injury and exhaustion. The most stressful tasks associated with relocation aren’t related to the home sale, but the household items that won’t ultimately make the move.

The majority of residential real estate agents are not experienced when it comes to assisting longtime homeowners and are solely focused on getting the home under contract and closed.

Unfortunately, there are a number of tasks that are made more challenging when putting a home on the market while living there: depersonalizing the space, keeping it orderly and clean, and having to leave during showings and open houses. In today’s market with low inventory, a home may be shown many times over a weekend, displacing already stressed homeowners for an unknown period of time.

Those of us who specialize in the senior market are keenly aware of the potential safety and security risks involved. Today’s purchasers seem to have little regard for privacy and have been known to approach homeowners with for sale signs in the yard and request personal showings. Trusting and inexperienced homeowners, particularly those with physical disabilities, put themselves at risk when opening their homes under these circumstances.

Once the purchase contract is negotiated, the clock begins to tick in regard to a series of time-sensitive tasks: appraisals, inspections and potential repairs – all while the homeowners are trying to pack, move and liquidate unwanted items.

Experts who can help

One of the most challenging logistical feats for sellers is getting the home emptied. Estate liquidators are often booked months in advance and most have a minimum requirement when it comes to gross receipts before they will even accept a sale. Donating to charity can be equally challenging as organizations are short on staff, warehouse space and floor space.

The real estate industry has responded to these challenges. The Seniors Real Estate Institute offers a rigorous program to train agents as Certified Senior Housing Professionals® (CSHPs), who can lessen the stress associated with late-life transitions, selling longtime residences and downsizing. The National Association of Realtors offers a two-day course for Realtors to be certified as Seniors Real Estate Specialists® (SRES).

While not all agents offer the same services or have the same level of experience, what they do share is the willingness and expertise to simplify the complex and overwhelming experience of moving.

CSHPs are trained to:

· Recognize and provide support on more than just the home preparations and sale.

· Connect their clients to other vetted experts who can ease the move. Some of these are space planners, estate liquidators, house cleaners, financial advisors, estate attorneys, home care providers – or whatever the client needs.

· Serve as the hub of the transaction, coordinating and advocating alongside the client and/or their family. They don’t simply provide phone numbers and leave the client to their own devices.

· Familiarize themselves with the various types of senior housing beyond what is for sale or lease in the MLS. They may or may not provide placement advice, but they know how to guide clients in the most appropriate options in their area.

· Meet with clients personally to discuss contracts and negotiations rather than the typical agent who does most everything digitally from a distance now.

If a client is contemplating a late-life residential transition, you can provide a valuable service by directing them to a real estate agent who is well versed in seniors’ issues and concerns.

====

Nikki Buckelew, Ph.D., is the founder of Seniors Real Estate Institute, a coaching training, and educational organization dedicated to equipping real estate agents to better serve the mature market. She is the author of “Senior-Centered Real Estate: My Path to Purpose.” Contact her at SeniorsRealEstateInstitute.com or 512-842-6011.