Affordability is on the minds of many in the over-55 crowd as they prepare to purchase a home, whether they’re downsizing or buying a dream property. And in a real estate market characterized by high prices and interest rates, the concept is magnified.
But what exactly is affordable? That’s a morass Atlanta’s real estate experts often step in to help senior buyers navigate as there are lots of factors to consider when determining what’s a budget-friendly buy.
“They may not have bought or sold a house for 10, 15, 20 years, and things have changed significantly. So, a lot of times, we’re really educating and informing along the way to help them make those decisions,” Conyers-based real estate agent Hilary Walker told the AJC of her age-50-plus clientele.
Income, assets and benefits
Income and assets are significant factors in home buying for this age bracket. Both can come into play for buyers looking for more affordable accommodations. Income above or below the Federal Poverty Level can determine whether buyers can access funding programs or live in certain developments, Walker pointed out. And as a Senior Real Estate Specialist with the National Association of Realtors, she’s trained to take lots of other financial factors into consideration on both sides of a move.
Credit: Contributed by Hilary Walker
Credit: Contributed by Hilary Walker
“We don’t touch your finances — a lender does that,” she said. “But for the most part, it’s good to know what things may be affected in the journey you’re about to take … My thing about affordability is that it’s subjective — it’s dependent on the person.”
Some of the things Walker routinely asks about include:
- Fixed income: If a senior is maxing out their fixed income with a new house, will it be enough to sustain mortgage payments in a few years?
- Taxes: How will property taxes affect a senior’s ability to make mortgage payments?
- Health care benefits and assistance: Will benefits from insurance like Medicare and assistance programs like Medicaid remain the same if a buyer’s assets change in the buying or selling of a home?
- Benefit coverage: Will coverage for benefits like Medicare change if a buyer crosses political boundaries such as county lines?
Making early decisions
Walker often finds herself communicating with adult children who are helping their parents make weighty decisions. Putting thought into these decisions early on can have a great impact on affordability during a living transition, she said. Seniors and their families should be considering long-term cost feasibility for aging in place, versus living near family versus assisted living. Senior buyers should look into home prices in areas where they might like to live and at simple home maintenance on their current residences, she said. Selling a home “as is” for a decent price is usually the preferred route for most seniors so as to avoid costly repairs. An agent who specializes in senior clients can help with analysis in these areas, according to Walker .
“Try to make decisions five years, five months too early, rather than five minutes too late,” she said . “Five minutes too late is a crisis.”
‘Real talk’
Archie Emerson is a real estate agent and the branch office manager for the NID-Housing Counseling Agency in College Park, a U.S. Department of Housing and Urban Development-approved entity.
She shepherds buyers through homebuying education workshops and counseling before and after they close on a home. She routinely urges buyers, including seniors, to take a hard look at their incomes and cost of living.
Credit: Contributed by Archie Emerson
Credit: Contributed by Archie Emerson
“It’s called real talk,” she said. “‘Let’s look at what you have. What’s on your budget? What type of income do you have coming in? Where is your money going?’”
She helps seniors with considerations like when to sell, especially if a larger home has become too costly or complicated to maintain. And she gives them options on where to go: a high-rise where there may be residents close to their age or a home in a senior living community. She said building smaller homes on family property is becoming a popular option, too.
Funding the move
Often, the key to realizing any of these housing goals is the right type of funding. Emerson cited help in the form of Federal Housing Administration loans and locally available down payment assistance through entities such as Invest Atlanta.
“Part of (the role of) any housing counseling agent is to know everything,” she said.
And sometimes knowing everything means knowing where to send homebuyers for help. NID counseling, Emerson said, is a good way to get connected with other organizations like Metro Fair Housing Services, Inc. or Urban League of Greater Atlanta, which may offer additional resources.
Real estate decisions since the onset of COVID-19, Emerson pointed out, have been fraught with complicated factors that have continued — especially for seniors.
“The price of our homes went up in Georgia, and rent went up, but income pretty much stayed the same,” she said. “And now, the interest rates are up, so it can be a scary moment for some people that are trying to make a rational decision.”
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