Give Seniors a Reason to Sell

Senior citizens often harbor a lot of myths about homeownership.

One of the most common is that there’s nothing cheaper than living in a house with a paid-off mortgage.

How many times have you heard someone say something like, “We’re staying put. We’re paying only about $700 a month for taxes, insurance, and utilities. Where else could we get this kind of deal?”

The reality, however, is that in many cases they’re depriving themselves of thousands of dollars of extra income by failing to see their house for what it is--an underperforming financial asset.

The economics are undeniable. Say you have a senior couple with a house worth $200,000.

If they were to sell the house and invest the money for a 10 percent annual return--not unreasonable in today’s market--they’d earn an extra $20,000 a year, or $1,670 a month.

If you add to that total the $700 they’re currently paying , you find they now have $2,370 a month to pay for housing expenses, a considerable amount in most markets.

Say they find an equivalent house or apartment for $1,500 a month. The result is, they now have an extra $10,440 a year, or $870 a month, to live on--plenty for a country club membership or an extra month or two of vacation in the winter.

A good way to present this information is in a marketing flyer that you distribute in a given neighborhood. Take a typical house and annualize the normal costs of taxes, insurance, utilities, and maintenance. Then find out how much it would cost to rent an equivalent dwelling and make a cost-of-equity calculation.

The top of the flyer should say “Could you use another $10,000 a year? If you’re interested, consider the example of a home in your neighborhood.”

At the bottom, the tag might read “Call me if you’d like to see how this scenario could work for you” or “Call me if you’d like to put your equity to work and increase your cash flow.”

Seniors tend to be cautious about money, but they know a good deal when they see one. Your job is to show them they’re actually losing money by continuing to hold on to a house that may not suit their current needs or wants.

All this sounds like a good tack to take with seniors, but how well it works for you depends on your approach. Here are some tips to follow when working with seniors:

• Don’t make automatic assumptions about who they are or what they are like. Seniors want to be treated as individuals, not as members of an age group.
• Show respect. Many young people automatically use first names. Seniors are Mr., Mrs., or Ms. until they let you know differently.
• Make sure everything is clear and understandable in your written materials. Translate any unfamiliar language or abbreviations.
• Repetition is important. You’re probably giving them new information, so it doesn’t hurt to say it a few times.
• Help them plan for the future. People’s needs change over the course of a lifetime. What was practical at 30 or 40 may not be so at 70. Help older people take this into account when they’re making a decision about living space.