Older Real Estate Agents Make Less Money. Here’s How To Fix That
For many people, a home is one of the most important assets they own because it can provide significant wealth in later years. But older homeowners who want to cash in when they sell often end up leaving money on the table.
A recent summary published by the Center for Retirement Research at Boston College shows that homeowners age 70 or older are selling their homes for 5% less than younger homeowners, indicating a significant loss of return. An older homeowner who sells a $400,000 property, for example, will lose $20,000 due to the lower sales price. Understanding why it happens is the first step to making sure you get the most out of selling your home.
One of the main reasons cited by the report for the loss of value is lack of maintenance. Many buyers choose homes that are ready to move in or that require a little extra work – and money – to make them suitable for their needs.
But older owner-occupied properties often need more renovations and upgrades to accommodate younger buyers. A home that requires a significant investment to bring it up to value is less attractive, so potential buyers may ask for price concessions to offset additional remodeling costs.
For many homeowners, maintaining regular maintenance becomes more difficult as they age. Mindy Price, a realtor at eXp Realty, explains that physical limitations and budget constraints often lead to delayed improvements and home maintenance that can raise red flags with potential buyers.
“Even if a home is very popular, if it’s dated, it can have a big impact on buyer perception and pricing,” Price added.
Another factor cited by the report is how older owners choose to market their homes, with many choosing to list their property privately instead of through a multiple listing service. Private listings, also called pocket listings, tend to attract investors who are generally less concerned about the home’s condition, can make a down payment and potentially buy at a lower price. That equates to less money for the seller.
There are, however, practical steps that homeowners can take to address these two issues and minimize the loss of value. Many of these are simple and affordable, while others may require significant investment. But they may also result in increased home sales.
Hire an experienced salesperson
According to Todd Luong, an associate at RE/MAX DFW Associates in Texas, many older homeowners need help navigating today’s real estate market. That’s especially true if they bought their homes decades ago, when many Internet services didn’t exist.
Hiring a real estate agent who understands the challenges older homeowners face can help them market and sell a home on the open market – and may increase their return on the sale.
See senior real estate specialist (SRES). In addition to marketing and selling your home, this type of agent can help you coordinate cleaning and maintenance work, find elder law attorneys and connect with financial experts to help you navigate sales tax implications.
Separate and become impersonal
Potential buyers want to envision themselves living in the home. That won’t happen if it’s full of knick-knacks, old furniture or other things that take up space.
Removing unused or broken furniture opens up spaces and invites buyers to see how the rooms could look with their items. If you’re downsizing, getting rid of these items before selling will make your exit easier. As an alternative, consider putting things you want to keep in storage until the home is sold.
Try to keep home decor as neutral as possible to appeal to a larger number of buyers. You don’t have to remove all personal photos and memorabilia, but make sure they don’t take up space.
Your last step is to have the home thoroughly cleaned, including carpets, drapes and upholstery if necessary.
Make important repairs and improvements
Sain Rhodes, real estate expert at Clever Offers, recommends identifying any necessary home repairs that could lower your home’s value and fixing them before they become a major problem.
Spending $15,000 to replace an old roof, for example, could add $50,000 to the value of your home. Fixing leaky pipes and replacing broken light bulbs keep your home from losing. There are also other, more budget-friendly improvements you can make.
“Think about high-value cosmetic changes that look like they took a lot of effort,” says Rhodes. “Things like new paint and a new kitchen actually add value without expensive repairs.”
Taking care of deferred maintenance tasks can also help assure buyers that they won’t have to spend more money right away to make the home livable.
Improve your home street appeal
The exterior of your home is the first thing buyers will see. Keeping your yard and lawn neat and well-maintained can make a good impression and send a signal to potential buyers that you care about the property.
Hiring a landscaping company to clean up the yard, restore dry grass and refresh flower beds and fences makes your home more attractive. A fresh coat of exterior paint, a new door and exterior lighting also improve your home’s curb appeal, Luong says.
“It makes the street appeal a little better,” he adds. “It’s easy to manage, and it definitely helps you sell the home for a much, much better price.”
