Read on or click SENIORS REAL ESTATE, to go to the Seniors Real Estates Specialists site for more information.

SRES members are not qualified to give legal or tax advice and SRES does not guarantee the accuracy of its members’ information. All clients are strongly urged to contact a real estate attorney or certified public accountant to obtain legal or tax advice.


“Seniors Real Estate Specialists (SRES) are licensed salespeople or brokers, members in good standing of the National Association of REALTORS®, who have taken the additional hours of training needed to help senior clients make wise decisions when buying, selling or investing in real estate. Many seniors have not invested or sold in years and their issues, requirements and needs are special in order to protect and enhance their equity.

SRES designees belong to the Senior Advantage Real Estate Council (SAREC) which offers the SRES designation nationally to those REALTORS® who have demonstrated the requisite knowledge, experience, insight and expertise to be a Seniors Specialist. The Council also offers its members frequent updates on senior housing issues.”


“One good real estate investment is worth a lifetime of labor.”

Experience has proven that proper planning for the eventual sale of your personal residence or investment property, with competent professionals, is absolutely critical. Why? Because you and your family’s short and long term financial security is at risk. In all too many instances, I have witnessed people being trapped into making bad, irreversible real estate and investment decisions. Without the professional input of an experienced Seniors Real Estate Specialist®, a thoroughly prepared plan, and a top financial team, many seniors and their families have lived to regret those snap decisions. Detailed discussions with a Seniors Real Estate Specialist, CPA, and Attorney are critical to your success in any real estate transaction. I must urge you to seek the advice of all of these professionals before making any major decisions about your property.


To go to the US GOVERNMENT to find other benefits you may be entitled to click here for GOVERNMENT BENEFITS. I just checked out myself and my Mom and found this site to be very valuable for determining if you are eligible for government and state benefits. Use this site!!

This is an abbreviated copy of our full report for your online information. For this complete report and more information just e-mail us.

1.I’ve already planned my retirement, so all I need to do now is sell my property. Right?

Retirement planning is very different from the planning required in selling your property. Many people have made economic plans based on retiring at 60 or 65. We plan to live in our home until we either sell our property or pass on. But sometimes circumstances change, and our property must be sold in a relatively short period. Having a pre-planned financial strategy for the sale of your property can make all the difference in the tax ramifications you will face and the peace of mind you deserve. If you connect with the right sellers agent, you could be homeless in a matter of months. This decision requires a thoughtful plan to maximize your success and net return.

2.I’m going to have to pay taxes someday, so why don’t I just get it over with now?

A certain percentage of clients feel like “Eventually we’ll have to pay the piper, so why not do it now?” However, because today’s senior can very easily live to 95 or older, seniors will probably need every dollar of their equity. The money that you would pay on Federal and perhaps your State government* (which is generally at 20% to 30% of the profit/gain that is made on the sale) is money that you need to keep and use to earn interest for as long as you can. Why? Because most of us probably will never be able to earn this amount of money again.

.*With the 1997 Federal tax changes, it is very important that you talk with your CPA, Tax Attorney, and REALTOR to determine your current State capital gains tax requirements.

3.If you specialize in tax-deferred sales, what do you suggest?

This is a question I’m asked over and over again. The first step in properly answering this question is to analyze, in detail, the acquisition of the property that you’re considering selling.
¨   When did you acquire it?
¨   How did you acquire it?
¨   What are the costs incurred to improve it?
¨   Do you have written records of those expenditures?
¨   Is there current financing on it?
¨   Do you have it in a trust with a will?
¨   What’s the total value of your estate?

The 1997 Tax Reform Act makes a combination of several tax benefit programs available. All property owners are now allowed to take the $250,000 (single) or $500,000 (married couples) exemption from the sale of their personal residence tax-free. You must have lived there two of the last five years to qualify. This means that at the time of sale any appreciation or profits up to these amounts are yours to keep, invest, or spend for your future and NO taxes are due. If the gain on your property is under the $250,000/$500,000 limits and you have other secure places to invest your equity, then the most prudent plan may be to take the tax-free cash proceeds and reinvest them.

4.We’ve owned a mountain resort property for years and want to sell it, but the capital gains taxes are huge. What can you suggest?

There is a solution for your dilemma. The revised tax law will allow you to move into your mountain home and claim it as your primary residence for the next two years. Then you can sell it, and take either $250,000 or $500,000 (depending on whether you’re single or married) from the sale tax-free. You must actually live there, get your mail there, and prove in an audit (if required) that this is your primary residence. If you own an income property, for example, you can move into the largest unit in the building for two years and use it as your primary residence. A substantial part of the potential taxable profit could be turned into your home deduction and treated as a tax-free sale. While this may be a short-term inconvenience, it could legally save you thousands.

5.I’ve heard that a 1031 exchange can save me money. How does it work?

People get confused between the tax-deferred exchange and the installment sale. The 1031 exchange is basically designed for trading income property. You would be exchanging your equity in one property for another income producing property. To be tax deferred, it has to be of equal or more value than the property you are selling or trading.

If you live in one of your units or decide to convert your residential property into an investment property, an exchange could have strong tax saving possibilities. You could also depreciate the property and create another tax benefit. A 1031 exchange, however, is totally different from the installment sale that I previously discussed. Again, proper analysis of your individual situation by an experienced Realtor® along with an accountant and tax attorney can help you to determine the value of a 1031 exchange. It doesn’t work for everyone, but for certain clients, it is the only way and provides an absolutely exciting opportunity. The delayed exchange allows you to find a Buyer for your property, place your equity with a qualified accommodator, and then buy/trade for another property across town (or across the country) and be totally tax deferred. You could still have the income producing benefits of all your equity.

6.Isn’t there a way that I could sell my property and stay here until I’m ready to move?

Most people who ask this question are generally talking about what’s called a Life Estate. It’s a technique where people can sell their property to someone else, creating a tax savings situation in some instances, and still reserve the right to live in the property for a specific period of time or until they die. However, with property that has appreciated, it is difficult to find a buyer who will go along with this for an unspecified length of time because generally it’s not economically feasible. You also lose control of your property.
However, Life Estates can be very effective if you own an income property—for example, a 6-8 unit building where you are living in one unit. That unit could be left in your control as a Life Estate. You could sell the property, get away from the management responsibilities, and still have a place to live for as long as needed. Again, a personal review with your Seniors Realtor®, Attorney, and your CPA are critical.

7.How does the 1997 federal tax exclusion work?

Currently, IRC. 121 allows any homeowner who is selling his/her principal residence an excluded $250,000/$500,000 federal tax exemption from the gain on the sale ($250,000—single person, $500,000—couple). This exclusion is a powerful program that has been developed by the government, giving most of us, particularly seniors, an opportunity to put all or most of the profits from the sale of our primary residence into our pocket tax-free. To qualify, you must have owned the property and used it as your principal residence for two of the last five years.

8.How can I get my equity to work for me and not against me?

This is probably the most critical of all the questions. Because of the appreciation of real estate over the last 20+ years, most of us who have owned property since then (or even longer) have substantial equity today. Maximizing this equity (getting its highest and best use) and converting it to a working asset for you is the exact reason for this report. Clients have often said, “Bob, I own my property free and clear, so it costs me almost nothing to live here.” This isn’t true, and here is an example of how your equity can actually work against you instead of for you:

A property in Florida was acquired for $50,000. It is free and clear and now worth $100,000. The property taxes are $3,000 per year ($250 per month). The insurance, utilities, etc. are somewhere in the area of $200 per month. On the surface, $450 per month is a pretty reasonable living expense, although you must add in the ongoing maintenance and upkeep. However, to be totally accurate you must add in the income producing value of your $100,000 equity at some reasonable interest rates.

The real cost to live in any free and clear (unencumbered) property must include a reasonable rate of return of the equity involved, plus the actual hard expenses (monthly out of pocket and maintenance), which are always substantially higher than you think.


While very few of us own million dollar properties, and these examples may not address the specific dollar value of your specific property, the rationale remains the same.

Without proper planning and professional real estate advice, mature clients are extraordinarily vulnerable at crisis decision-making time. If you evaluate your individual situation in advance of the time of sale, then whether you sell for cash or use some form of creative financing, you will have the best situations and tools available to minimize your liabilities.

All in all, with the proper planning, there are tremendous tax and positive cash flow benefits available to all who acquired property in the last twenty-five to fifty years. You’ve gone through the traumas, the difficulties, and the sleepless nights to make sure that your properties were cared for and paid for. When the time comes to sell your residence or income property, doesn’t it make good sense that you analyze, evaluate, and seek a competent professional before you make any decisions? Whether you’re going to sell in six months or six years, having a plan makes it so much easier.

1. I’ve decided to sell my home. Should I rent or should I buy another home?

Whether maturing sellers should rent or buy their next home is not only an emotional decision, but also largely a question of economics. The most important financial factor that comes into play is determining the highest and best use of the cash you receive from selling your home. Many times, tying up a lot of cash as equity in a home does not provide the best cash flow.

The question to ask yourself is: Do I have sufficient cash flow from other sources such that using the equity from my current home to buy my next home will be an acceptable financial decision? If the equity in your current home represents a substantial portion of your assets, how you use these funds is very important in determining your quality of life.

To understand how this works, consider what I call the “Cheap Living Myth.” One of the most commonly uttered phrases by senior homeowners is, “Our mortgage is paid off, so it’s really cheaper for us to keep living in our home than it would be for us to rent a home.” Most seniors honestly don’t know they might be able to rent an equally nice home in the same neighborhood and pocket thousands of dollars in extra cash every year.

Suppose a senior’s home has a market value of $200,000, and she is spending $700 a month for taxes, property insurance and utilities. If she had that $200,000 in cash and invested it at 5 percent interest, she would earn an extra $10,000 each year. Divided by 12, that’s an extra $835 each month. Add that to the $700 she’s paying out-of-pocket and the true economic cost of living in her home is $1535 a month. Consider another example: Suppose a senior’s home had a market value of $100,000, and she was spending $500 a month for taxes, property insurance and utilities. If she invested $100,000 at 5 percent interest, she would earn an extra $5,000 each year. Divided by 12, that would be an extra $416 each month. Add that to the $500 she’s paying out-of-pocket, and the true economic cost of living in her home is $916. If the monthly rent for a comparable home would be more than that amount, this senior would be economically better off remaining in her home.

2. Is there a simple rule of thumb I can use to decide whether I should buy or rent my next home?

Advanced courses in real estate economics use a “two-thirds/one-third” rule. The first two-thirds of most people’s lives are spent acquiring and leveraging assets while the last one third of most people’s lives is spent earning income (i.e., generating cash flow) from those previously acquired and leveraged assets. So, people who used to figure they would live to be 60, 65 or maybe 70 years old would acquire and leverage assets until they were 45 years old. Then, from that time forward, they would try to generate income from those assets. People who, today, figure they will live to be 90 years old, say, could be acquiring and leveraging assets until they are 55 or 60 years old. After that, they can start buying income property that generates cash flow. It may not be prudent for someone who is 75 years old or older to purchase additional property unless it’s located in some type of assisted care living situation.

3. I’m planning to move into my vacation home. Is this a good idea?

Maybe. It’s important to make a careful and considered decision about where you want to live at any time in your life. You should select an area where you feel comfortable and secure and that you have had ample time to visit. You should also weigh how close shopping, hospitals, EMS services, and rescue services are to your home. Some resorts and vacation areas may have these resources at the resort, others may rely on nearby communities coming from several miles.

4. Should I consider relocating to another state?

Younger seniors generally are more flexible and enthusiastic about relocating to a brand-new distant community, while older seniors tend to be more inclined to stay in a familiar community. Seniors also tend to relocate to be closer to trusted family members. That usually means moving to wherever their children or grandchildren have decided to live or returning to a hometown they themselves left behind years earlier. Many seniors moved to sunny retirement-friendly states (e.g., Florida, Arizona and California) a generation ago, when they were in their late ’50s or early ’60s. These seniors are now living much longer than they had expected and are facing more difficult housing decisions.
5. How can I be assured that my next home won’t be a “money pit”?

If you are buying an existing resale home (i.e. not a brand-new home), it’s important to obtain as much protection as possible. Talk to a Realtor who specializes in helping seniors and who understands senior issues. This is a good step toward learning about all the options available to you.

One such option is to make sure the property is thoroughly inspected by a competent building contractor or home inspector (your choice) prior to signing off on your contingencies. Another option is to make sure your written purchase agreement includes all the legally permissible warranties from the seller guaranteeing the condition of the property.

Remember: Everything in a real estate transaction should be in writing. Any promises that aren’t written are not promises at all with regard to the quality or condition of the home.

6. How can I be sure I won’t lose money on my new home?

There is no guarantee that any particular home will appreciate in value; however, residential real estate has historically proven to be an excellent long-term investment. Keep these strategies in mind to choose a home that will pay off over the years:
¨   Purchase a home in a well-established neighborhood with good schools, a low crime rate, and easy access to transportation and attractive shopping areas.
¨   Purchase an undervalued home, or one that is unpopular at the moment due to its architectural style or specific location within the well-established neighborhood.
¨   Avoid over-paying for a home just because it has a strong emotional appeal to you. Paying too much in the first place means your home will be worth less than you paid for it on the day you move in.

7. Should I pay cash for my next home or obtain a mortgage?

If you’re buying a home in an unfamiliar area, you should probably take advantage of the financial leverage of a mortgage. That way, you can check out the area more thoroughly before tying up a lot of cash in your home. Leverage is important because if you bought a home for $250,000, for example, and made a down payment of only $50,000 or $60,000, you wouldn’t have all your cash tied up in the home. You would have to make mortgage payments for a while, but if you didn’t enjoy the area and wanted to move, you would still have cash available for that purpose. Of course, if you decided to stay put, you could pay off the mortgage. (Make sure the mortgage doesn’t contain an onerous pre-payment penalty, so you’ll be able to pay it off in full at any time.)

8.  Should I put my money into other investments instead of buying another home?

One good answer to this question is that you might well be able to buy a home AND put money into another investment. Many seniors look at purchasing a small multifamily building with two, three or four attached homes. (A two-home building is called a “duplex” and a three-home building is called “triplex.”) Instead of using the equity in your existing home to buy another home or a condominium, you can buy a multiple-unit building, move into one of the units and rent the others to tenants. The benefit is that you’ll be an owner and be able to generate income from this investment. The point isn’t to buy a large apartment building with 10 or 15 units that could bring on a lot of management and maintenance responsibilities. Another advantage is that you could move from one of the larger units in the building to a smaller one if you need less living space in your later years.

If you finance part of the purchase with a mortgage, you can use the rental income from the other units to pay some or maybe all of the monthly mortgage payments. For example, suppose a couple in their early 50’s sold their home for $250,000, then bought a triplex for $350,000. If they applied the income from renting two of the units to the $100,000 in mortgage debt, they might be able to repay it within 15 years. That way, by the time they were in their 70’s, they would own the property free and clear and could keep the extra cash from the rents. If the two units each rented for $800-$1,000 a month, that would bring in $1,600 to $2,000 a month before operating expenses. In the event of a financial emergency, they could refinance the mortgage or obtain a mortgage against the property with relative ease.


The American Dream is to own your home. Over 80% of mature Americans over 75 still live in and own their properties. However, many of us, as we age, are not able to maintain our homes. Some will choose to downsize to a condominium or other maintenance-free dwelling. Others will decide to move to an active adult community with recreational and social amenities. Still others will need to look at assisted-care living facilities.




Caravan: A group of Realtors, usually from several offices, will join together to view properties that are available in an effort to become more familiar with them prior to introducing them to potential clients.

Co-Brokering: When one broker lists the property and another office sells the property, they share the commission through the listing office. The commission fee is not doubled; the two offices share it.

Client: The client of the broker is the individual who pays the fee for the brokerage service.

Customer: The individual that has been attracted by the service provided.

Escrow: All deposits held by the broker are held in escrow; a customer’s account, separate from all other business accounts of the firm.

Home Inspections: A potential buyer has an opportunity to obtain a satisfactory structural and termite inspection within a reasonable length of time after the offer to purchase has been accepted. The buyer has the ability to cancel the transaction with the results of this inspection.

Listing: A property that has been offered for sale by a broker.

MLS: The Multiple Listing Service is a means of making possible the orderly dissemination and correlation of listing information to its members so that “realtors may better serve the buying and selling public.”

Open House: An opportunity to let the public view the property that is for sale during a specific period of time without an appointment. The property is advertised as an “open house” and interested parties visit at random and talk with the agent present.

Real Estate Broker: An individual who is licensed by law to be employed by another, for a fee, to assist in real estate transactions.

Administrator: Person appointed by a court to take possession of property of a person who died without leaving a will.

Closing: That date on which the property is transferred from one individual to another.

Covenant: An agreement between the parties in a deed whereby one party promises to do or not to do certain acts with respect to the land (e.g. land used only for residential purposes).

Deed: The written instrument by which the title to land is transferred from one to another.

Easement: The right of use which one person may have over the lands of another (e.g. a right of way to install, operate, and maintain utility lines).

Encroachment: The intrusion of any improvement partly or entirely on the land of another.

Encumbrance: Any interest in land held by persons other than the owner that will lessen the value of the title (e.g. mortgages, liens, etc.).

Fixture: Personal property that by state law becomes real property upon being attached to real estate (e.g. drapery rods).

Legal Descriptions: A property description, which by law is sufficient to locate and identify the parcel of real property.

Lien: A claim of charge on property of another for payment of some debt.

Life Estate: An individual’s right to the use and occupancy of real property for life.

Offer to Purchase Property: A written instrument that is legally binding. It outlines the buyer’s intent to purchase and under what specific conditions.

Power of Attorney: An instrument in writing by which one person, the principal, authorizes another to act for him or her in the specific action described in the instrument.

Purchase and Sale Agreement: A written instrument that is legally binding. It is usually in more detail than the Offer to Purchase, but includes the original details of the buyer’s intent.

Recording: The noting in the designated public office, usually the registry of deeds, of the details of a properly executed legal document, such as a deed or mortgage.

Survey: A map of land made by a surveyor showing boundary lines, buildings, and other improvements of land.


Annual Percentage Rate (A.P.R.): The total amount of the finance charge including interest, points, and all loan fees (e.g. escrow, processing, etc.) calculated as a percentage of the borrowed amount and expressed as a yearly rate.

Application Fee: This is a fee that may be charged by the lender to cover the costs of processing your loan application. It is usually charged at the beginning of the application process.

Appraisal: An estimate of fair market value of a property prepared by a qualified real estate appraiser.

Loan-to-Value (LTV) Ratio: The amount of the loan as a percentage of the property’s appraised value. For example, an 80% loan is determined by subtracting a 20% down payment from the property’s appraised value.

Margin: The margin is the difference between the ARM index and the rate the lender charges. Example: an index rate of 8% plus a margin of 2.5% could result in a home loan rate of 10.5%. In some areas, the margin is referred to as the factor. The fixed margin over the index covers the lender’s operation expenses and profit margin.

Mortgage: A mortgage is evidence of the security for a loan. It is the document, signed by the borrower, which gives the lender the right to the property if the loan borrower failed to live up to the loan arrangement.
Negative Amortization: This happens when the minimum monthly payment on an adjustable rate mortgage is not large enough to cover the full amount of interest that is due. The difference between interest owed and interest paid may then be added to the loan’s principal balance, at the option of the borrower.

Origination Fee(s) (see also Points): Also called a Loan Fee, this is a fee assessed by the lender for processing the loan. Most lenders’ charges are based upon the amount of the loan. One point equals one percent of the loan amount. The borrower at closing normally pays these fees. In some cases, however, they may be paid by the seller or shared by both parties. Also, the lender may “escrow” these charges to be deducted from the mortgage amount.

Payment Cap: This cap places an annual limit on the amount that a monthly payment can increase. This feature is offered by some ARM lenders instead of an annual interest rate cap.

Point(s): One-point equals one percent of the loan amount (see Origination Fee).

Assumption Fee: The fee you pay the lender in order to assume someone else’s mortgage loan.

Assumability (Assumption of a Mortgage or Assumption of a Deed of Trust): Agreement by a buyer to assume liability under an existing agreement between seller and lender. Not all loans or loan terms are “assumable.” The lender typically must approve the new borrower.

Equity: The market value of a property minus the total amount of any existing liens.

FHLMC (Freddie Mac): Federal Home Loan Mortgage Corporation, an affiliate of the Federal Home Loan Bank, which creates a secondary market in conventional residential loans in FHA and VA loans by purchasing mortgages from members of the Federal Reserve System and the Federal Home Loan Bank System.

FNMA (Fannie Mae): Federal National Mortgage Association, a federally sponsored private corporation, which provides a secondary market for housing, mortgages.

Hazard Insurance: Insurance protection for the borrower and the lender against property loss due to fire, wind, or natural hazards. Many lenders require payment of the first year’s premium as a closing cost.

Impound Account (also called Escrow Account in some states): This is an account held by the lender for payment of taxes, insurance, and other periodic debts against a property. The borrower pays a specific amount over and above the monthly loan payment, and the lender pays the bills with the accumulated funds. Some lenders require an impound account for certain types of financing.

Index: A published interest rate composite used by lenders. Its movements determine interest adjustments on adjustable rate loans.

Private Mortgage Insurance (PMI): This mortgage default insurance designed to pay the lender a portion of the outstanding balance of a loan in the event that the homeowner defaults. PMI may be required on certain types of loans; if so, the initial premium is usually one of the closing costs, while subsequent premiums are included in the borrower’s monthly payments. This insurance usually applies to loans with only 10% down.

Refinance: The securing of a new loan either to pay off an existing lien or mortgage on the property or to access your equity.

Title Insurance: Insurance protection against the consequences of a pre-existing lien or encumbrance on a property that might be discovered after a change in ownership.

Underwriting: These are standards set by the lender that the borrower must meet in order to qualify for the loan.

All information deemed reliable but not guaranteed. Copyright 2022.

© ©2022 BHHS Affiliates, LLC. An independently owned and operated franchisee of BHH Affiliates, LLC. Berkshire Hathaway HomeServices and the Berkshire Hathaway HomeServices symbol are registered service marks of Columbia Insurance Company, a Berkshire Hathaway affiliate. Equal Housing Opportunity.