Real Estate Options: Aging in Place

My husband, Dan (pictured above), is a kind, compassionate hospice and palliative care nurse.  He has dedicated his career to caring for people with advanced illnesses in their own places of residence.  He has learned that most older people prefer to remain in their own homes, which helps them maintain their quality of life as they understand it.

Chronic illness or increasing physical limitations need not automatically force you to leave your home as you age.  Through thoughtful and careful planning, you may be able to “Age in Place”— which will help you to maintain the quality of life you desire in the home of your choice.  The focus of “Aging in Place” should be on SAFETY and COMFORT.

Modifications to your home may include installation of additional railings, increased lighting, non-skid flooring and grab bars in showers or tubs, walk-in showers etc., all designed to help reduce the risk of falling.  Removing clutter and loose rugs that do not have non-skid backing, widening doorways, modifying door handles for easy gripping, installing kitchen cabinets with roll-out shelves, installing strobe-lit smoke detectors are just a few of the many recommended safety modifications.  A home remodeler with a CAPS (Certified Aging in Place Specialist) designation will be trained in Universal Design principles and is therefore likely to have the expertise needed to retrofit your home to meet your future needs.

“Aging in Place” also involves knowing what community services are available to elderly and disabled people such as transportation, meal delivery services, home care, etc. 

Your financial circumstances will be a critical factor in determining your ability to “Age in Place.”  Make certain to have plans in place that address all financial and legal issues that may arise.  Consulting with an attorney specializing in elder law as well as an estate or financial planner are advisable steps to take.

There are many on-line resources that can assist you in planning for your future including the    National Aging in Place Council: www.AgeInPlace.org.

It is natural to think “I’ve got plenty of time before I need to worry about these issues.” But life changes have a way of sneaking up on you when you least expect them.  Planning ahead may allow you to have the option of remaining safely in your home for as long as you desire.

If you prefer to move to a new home that better suits your needs, please contact me to discuss your options.  

Is a Reverse Mortgage Right for You?

Homeowners age 62+ may wish to consider the option of taking out a Reverse Mortgage ("RM") on their home.  A Reverse Mortgage is a government-insured FHA loan that allows homeowners to utilize the equity in their home for such purposes as covering living expenses, purchasing another property (e.g. downsizing or moving to a single story home), retrofitting their current home to meet increasing physical limitations, or covering the cost of in-home medical care, etc.

An RM may be used as a Line of Credit or to pay off an existing mortgage.  There are several important differences between an RM Line of Credit and a traditional HELOC Line of Credit.

  1. Obtaining a traditional HELOC costs considerably less than an RM.
  2. A HELOC may be frozen by the bank at any time; so even if you qualified for a certain amount from the lender, you are not guaranteed that these funds will actually be available to you when you want them.  (This was, unfortunately, a common occurrence during the recent economic downturn.)  However, this will not occur with a federally-insured RM.  An RM guarantees that you will have access to the funds when you need them.
  3. A HELOC has a definite end date for return of all monies owed, and monthly interest payments are required.  There is no interest payment required on an RM and no end date for repayment.

An RM may not be the best option for homeowners who:

  1. Do not plan to be in their homes for a considerable amount of time or use the loan to downsize to a property they plan to live in for a long term.
  2. Have enough investments or other funds they can tap into at any time and enough funds to meet their monthly expenses.
  3. Do not have a significant amount of equity in their homes.

There are a limited number of qualified Reverse Mortgage specialists in the San Diego area; so if this is something you may be interested in pursuing, please contact me for a referral to an appropriate lender.   You may also speak to a HUD counsellor for more information by going to www.consumerfinance.gov  (a U.S. Government website) and searching under "Reverse Mortgage."

DISCUSSING FINANCIAL ISSUES WITH YOUR FAMILY:

Many parents do not wish to discuss their financial situation with their adult children.  Some feel that their finances are a private matter and not the concern of their children.  Others, however, who may actually not be in a strong financial position, tell their children that everything is fine when, in fact, it is not.  It is extremely disheartening for the children of aging parents to discover that their once-financially-stable parents do not actually have the resources to cover sudden medical costs such as in-home care.  Therefore, I encourage families to be open with each other before there are any sudden, unforeseen changes in circumstances.

 

 

 

 

What's YOUR excuse?

I am not a health care professional.  However, I am married to one.  My husband, a Hospice and Palliative Care Nurse, has been encouraging me since our marriage nearly three years ago to complete an Advance Health Care Directive.  I hemmed, hawed and came up with every excuse possible not to do it including: 

  •  I’m superstitious.  If I complete the Directive, I’m courting disaster.
  • It’s too depressing to think about this topic
  • My husband and daughter have been told what I want, that’s enough
  • I’m only in my early 50s so I’m too young to need it.  Right? 

Wrong.  On all counts.

Completing an Advance Health Care Directive is vital for adults of ALL ages.  This Directive helps to ensure that you will receive the care you desire when you are unable to speak for yourself.  When completing the Directive, you specify:

  1. Who will act as your agent(s) to make medical decisions for you when you are unable to do so; and,
  2. What types of health care you want or do not want to receive when diagnosed with an irreversible terminal condition.

If you do NOT complete this Directive, you increase your risk of receiving aggressive medical care that you may not want, such as artificial life support, which, in turn, could cause great emotional distress and possibly significant financial hardship to your family.

How?  Most insurance companies have a cap on the amount of expenses a person may receive in their lifetime.  Once that cap is reached, the cost of care falls on the family.  Medi-Cal will cover most health care costs AFTER the family has exhausted nearly all of its financial resources.  In other words, you have to prove yourself to be poor before Medi-Cal will assume payments for this type of care. 

There are approximately 4000 people in the State of California being kept alive by long-term artificial life support, including mechanical ventilators and feeding tubes.  If this is a scenario that YOU want to avoid for yourself and your loved ones, please complete an Advance Health Care Directive as soon as possible.  Completing this Directive requires either the signature of two witnesses (one may not be related to you) OR that of a Notary Public.  No attorney is required to complete this Health Care Directive, and you may update it at any time.

April 16th is National Health Care Decisions Day.  You may honor this day by completing an Advance Health Care Directive to help protect your future quality of life.

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California residents may download an Advance Health Care Directive at:  http://ag.ca.gov/consumers/pdf/ProbateCodeAdvancedHealthCareDirectiveForm-fillable.pdf

Additional resource:  The Coalition for Compassionate Care of California:  www.coalitionccc.org

New Smoke Alarm Requirements: Don't Play With Fire!

 

March 2015 was the hottest March on record in San Diego County.  Unless you have been hiding under a (wet) rock, you know that we are experiencing a severe drought in California.  Where there is drought, there is vastly increased risk of fire. So please take a few moments and review the updated smoke alarm guidelines below.  This could save your life and the lives of your loved ones.

For safety purposes, it is recommended that smoke alarms be installed in each bedroom, in the hallway leading to each bedroom cluster, and on each level of your home.  You are also recommended to install a device between your kitchen and living room.

Do not install them near draft areas such as windows and vents.  They should be tested monthly and vacuumed at least once a year as cobwebs and dust can impair their sensitivity and usefulness. Contact your local Fire Department if you have concerns about proper placement.

As of July 1, 2015, per CA Senate Bill 745, any newly installed smoke alarms (or combination smoke alarms/carbon monoxide detectors) that are solely powered by batteries must contain a sealed battery (i.e. non-removable and tamper-proof) that is rated to last 10 years.  These new smoke alarms must:  1) Have a "hush" feature (to temporarily silence the device if something such as smoke from a kitchen sets it off so that the smoke may dissipate).  2) Have a place to write the installation date. 3) Display the date of manufacture. 4) Incorporate an "end-of-life" feature that provides notice that the device needs to be replaced.  (Certain exemptions existed that will be null and void by 7/1/15.)   This new law does not apply to hard-wired smoke alarms.

If your current smoke alarms do not contain a 10-year battery, you should either replace the battery with a 10-year non-replaceable battery OR install one of the new smoke alarms that are in compliance with the above design.

For Landlords:  By January 1, 2016, Landlords will be required to install a smoke alarm INSIDE EACH BEDROOM.  Landlords are responsible for testing and maintaining the smoke alarms in any rental property they own.  They may not pass this responsibility along to the tenant occupying the residence.

For additional information, please see the California State Fire Marshall's Information Bulletin or the website of the California Department of Forestry and Fire Protection.

 

 

CA Homeowners Insurance: Are you REALLY covered?

Your Homeowners insurance policy may not be as comprehensive as you think it is.  It may be a good idea to review your policy with your insurance agent and check if you are covered for the following:

  1. Burst pipes resulting from homeowner negligence (e.g. not draining them or leaving the heat on while you are away for a period of time).
  2. Cost of a full remodel after a catastrophe such as a fire.
  3. Lost wages as a result of taking time off after a catastrophe to handle insurance claims, remodels, etc.
  4. Simultaneous catastrophes:  If two events occur simultaneously (e.g. flood and earthquake, or fire and wind damage), but you are only covered for one of those disasters, you may not receive payment for either.  Ask your agent about "anti-concurrent causation."
  5. Earthquakes and Flooding:  Often not covered by private insurance but may be available through CEA (California Earthquake Authority) and FEMA (Federal Emergency Management Agency). 
  6. "Ordinance or Law" coverage (aka "Code Upgrade" coverage):  If new building codes require upgrades to a NON-DAMAGED portion of a damaged home, you may not be fully covered.
  7. For condo/townhome owners:  Loss Assessment Insurance:  A Homeowners Association insurance policy is likely to have a deductible.  In the event of a disaster (e.g. earthquake, fire, injury in a common area, etc.), homeowners may be charged a "Special Assessment" to cover its deductible.  Loss Assessment Insurance would pay your portion of that assessment.  (Note:  As a result of having Loss Assessment Insurance, I received enough money after the Northridge Earthquake to cover my Special Assessment as well as moving expenses as I was forced to vacate my damaged unit during repairs.  Had I not had this coverage, I would have been responsible for all of those expenses.)

Check with your Insurance Agent to make sure you are fully covered for all possible situations.  Not being covered sufficiently could negatively impact the value of your home if you are unable to pay for quality and complete repairs in the event of a disaster.

 

 

Downsizing: What To Do With All Your Possessions

Once you have made the decision to downsize (or “right size”), you will need to determine what to do with all your possessions.  Two options:  Hire a company to help you sort through everything, OR do it yourself.

 

HIRE A COMPANY TO HELP YOU

Companies such as Caring Transitions can help you sort through your furniture, papers and treasured possessions and determine your best course of action.  They can coordinate an estate sale (which may net you a fair amount of money), pack up the items you want to keep and move you into your new home. 

 

DO IT YOURSELF:  TIPS

1.  Start the organizing process at least one month prior to listing your home for sale.  The less clutter, the more appealing your home will be to potential buyers.

2.  Begin with the kitchen, living and family rooms then work your way outwards to other rooms (including garage and attic).  Make 4 piles:  Keep.  Donate.  Give Away.  Trash/Recycle.  Note:  If you are giving items away to family members, check with them first to make sure they want them.

3.  Measure your furniture as well as the space you will have in each room of your new home so you know what will fit. 

4.  Make DVDs of photographs or get someone to help you with this project (perhaps a grandchild, or hire a service that specializes in this field).  If you have a precious collection of something but can’t take it all with you, perhaps consider having a framed photograph of the collection made.

5.  Decide where to donate your items.  Charities such as the Salvation Army and AmVets will pick up your donations.  You may also wish to consider donating kitchen items to a soup kitchen or camp for disadvantaged children.  Specialty items may be suited for a museum or school. The San Diego Book Project collects and donates books to vets, schools, homeless groups, etc. (Email: admin@sdbookproject.org)

6.  Hold a moving or yard sale.  Advertise on Craigslist and in the newspapers, most of which have-on line advertising available in addition to print ads. 

Take your time and work on a schedule that works for you.  It is better to proactively plan your move at your own pace rather than waiting for illness or another crisis situation that compels you to make a hasty,   unplanned move.

Partially excerpted from AARP Bulletin article by Sid Kircheimer.

Should Homeowners Get an Appraisal Before Selling?

While a Realtor can usually provide a home seller with an estimate of what PRICE a home might sell for (based on comparable recent sales), a licensed Appraiser can provide an opinion of VALUE.  An Appraiser's opinion of Value is based on a set of extensive criteria that goes beyond price per square foot or simple formulas.

I recommend hiring a licensed, professional Appraiser when homeowners have a custom home that is challenging to comp out or when their opinion of what their home should sell for differs significantly from my own opinion as a Realtor/Broker.  Many Realtors will simply ask homeowners how much they want for their home and then put it on the market at that price.  However, when the home sits on the market for months at that price without any offers, the clients will only be disappointed.

It is best to have as clear an understanding as possible about the true VALUE of your home prior to putting it on the market.  This will alleviate unrealistic expectations and help you make the best possible decision as to whether you are really ready to sell.

Don't Remodel Just to Sell.

"Should I put in a new kitchen before we put our house on the market?" 

"Should we install hardwood flooring before we sell?"

We hear these kinds of questions a lot.  Here is the simple answer:  DON'T DO IT.

Although your new kitchen and flooring may certainly look attractive, it will most likely not increase the overall value of your home.  Further, there is a good chance that a buyer may not like your brand new upgrades and be unwilling to pay the cost added to your sales price to, in effect, pay for them. Putting in "neutral" colors does not guarantee that a buyer will like them.  Many people feel that this color scheme is generic and they want something different that reflects their own tastes.  The only major item that should be replaced is a carpet that is in very rough condition.

Do make repairs to items that are in need of repair, and consider replacing smaller items that are worn out (e.g. door/drawer knobs).  But do not waste your money making capital improvements to your home that you will not be able to enjoy and that a buyer may not like and is unwilling to pay for.

Use the Internet Judiciously

Many home sellers and home buyers are relying on websites such as Zillow to tell them how much homes should cost.  THIS INFORMATION IS OFTEN MISLEADING AND INACCURATE.  Why?  Because whatever algorithms they are utilizing are not able to differentiate between homes that have significant differences that impact their pricing.  For example:  Homes that have been considerably upgraded vs. those that have not; homes that back up to a busy street vs. those that are in a quiet cul-de-sac location; homes that are in a designated 55+ neighborhood where prices are traditionally lower than surrounding neighborhoods vs. those that are not; homes that have a partial, obstructed ocean view vs. those that have an unobstructed, panoramic ocean view.  The list goes on and on.

Although a wealth of real estate information is readily available on line, interpreting it accurately can be a challenge.  This is just one good reason to take advantage of the services of a experienced Realtor.

Find the Right Home: Your Criteria

If you are like 99% of prospective home buyers, you have been surfing the Internet to check out homes.  You probably also have a prety good idea of what you ideally want in a new home.

However, we recommend that you sit down and compile a list of items that you absolutely MUST have in a new home (your non-negotiables) and another list of what you would like in a new home but could possibly sacrifice (your negotiables).  You should then prioritize the items on each list.  Unless you have unlimited resources, you are probably not going to get 100% of the features you want.  If you could get 75-80%, that is a more realistic goal.

Taxpayer Relief Act for Capital Gains

If you have lived in your home for at least 2 of the past 5 years as your primary residence, you may be able to claim a tax-free exemption of $250,000 ($500,000 for a couple filing a joint tax return) from the profit you earn from the sale of your home.  

An unmarried widow(er) has up to 2 YEARS after the death of his or her spouse to sell the home and claim the $500,000 exemption.

There are also possible tax exemptions on the profit for those who have lived in their homes LESS than 2 years but are forced to sell due to job relocation, health matters or other unforeseen circumstances.

If you sell your home but have lived in it for AT LEAST 1 YEAR (i.e. 366+ days), your profit may be taxed on a pro-rated basis.

YOU ARE NOT REQUIRED TO PURCHASE A REPLACEMENT PROPERTY TO TAKE ADVANTAGE OF THE TAXPAYER RELIEF ACT.

FOR MORE DETAILED INFORMATION AND TO ASCERTAIN WHETHER OR NOT YOU QUALIFY FOR THESE TAX EXEMPTIONS, PLEASE CONSULT WITH YOUR TAX PREPARER AND/OR ATTORNEY.

Save Money on Property Taxes with Props 60 & 90

Homeowners age 55+ may be eligible for a unique government program that allows them a one-time opportunity to sell their current home and downsize to a new home but pay the SAME TAX ASSESSMENT that they are currently paying.  San Diego is one of 9 counties participating in this program. 

Please contact Cheri Weiss for further information, 858-829-8178, or email Cheri@TopCoastProperties.com.