Cautions for Buying a Retirement Home
By Linda Manley
As you approach retirement, or shortly thereafter, you might consider moving from the home you have lived in for many years. Retirees cite several reasons for thinking about such a change. Downsizing is a common reason. With your family grown and on their own, you probably no longer need as many bedrooms, family rooms, and playrooms as you once did. Cleaning, furnishing, and generally maintaining a large home can become a taxing chore you no longer enjoy, so you want something smaller and perhaps maintenance-free.
Another common reason to sell is to move to a different geographic area. You might want to be nearer to family members who live elsewhere, whether your children or your siblings. You might be looking for a different climate, usually a warmer one. Perhaps you just want a different neighborhood. Neighborhoods change: friends move away, more children move in (whom you now consider noisy), and local stores move or go out of business.
Regardless of why you decide to move, you need to be more careful than ever when you buy a retirement home (also see “Homes Association Perils for Buyers“). The trappings of the stagnant housing market have created desperate developers, brokers, and sellers who are tempted to make their properties look desirable at any cost, including misleading potential buyers. Simple fudging is common in areas such as average utility costs, homes association dues, and property taxes. The size of the lot and the square footage of the home are other common areas of misleading figures, both of which could affect appraisals and financing.
Inconvenient fibbing involves assurances that the neighborhood is quiet and that no one nearby has crowing roosters, barking dogs, or other noisy pets. Sellers also forget to mention the freeway noise, the main bus route at the end of the block, or the garage band next door.
More serious misrepresentation involves issues such as lack of disclosure of previous flooding, sewer backups, or pest infestation such as termites, rodents, or even bats. Mold inside walls is a growing problem, and buyers should know whether radon gas is an issue in the house. Leaking roofs and plumbing or electrical systems that are out of date can present major headaches, as well. Essentially, you must look out for your own interests. Although a buyer’s agent is helpful, you should be prepared to do a good deal of the legwork on your own. A few tips will help start you on your way, although this list is by no means comprehensive.
- Drive through the neighborhood at several different hours of the day and night. During late afternoon or early evening visits, you will see more family activity, including people coming home from work, children playing outdoors, and so on. Talk with neighbors who aren’t selling to get a better feel for the neighborhood.
- Talk to police, if you are concerned about crime in the area.
- Check with the community or homes association if there is one. Find out if major expenses or improvements that would increase your dues are on the schedule. If the area is new and the seller has promised coming amenities, ask how soon those are likely to materialize. Ask if specific percs, such as assigned parking spaces, pool passes, and fitness club memberships are included in the sale.
- Hire an independent home inspector, rather than one recommended by the seller. Be sure to check the credentials and references of the inspector before you hire him or her.
- Contact the office of the tax assessor to find out the amount of taxes. Try to determine if any new improvements you saw in the home, such as a new deck or room addition, have been recorded on the property. If not, your taxes could be higher.
- Contact professionals for a complete and thorough history of property damage. This is called a comprehensive loss underwriting exchange report and it contains reports from insurers about claims for the past five years. It does not contain any personal or confidential information about the current homeowner. Also called a home seller’s disclosure report, this will reveal loss or damage from wind, hail, or fire. Although the homeowner can obtain the report for free, the report will cost the potential buyer about $20. The report can be obtained from http://www.choicetrust.com or from the Insurance Services Office, Inc. at 800-627-3487, where it’s called the A+PLUS report.
We all know that a move at this time of life, just after you have retired, is a major decision. As you look, and continue to look, for just the right new retirement home, it’s easy to become overwhelmed, exhausted, or just complacent as you visit home after home after home. But when you find a home you love, going the extra mile and completing your own due diligence can save you thousands of dollars down the road and can prevent you from buying a nightmare instead of a dream home. Make your retirement move a happy one by doing all your homework.