Active Adult Communities Pay for Senior Living: Sell Your Home 12/16/2024 | By Annie Tobey Most older adults reach a point when they’re ready to move to a senior living community. They may be looking for a smaller, low-maintenance home, or they may need extra care provided by trained staff. Since these communities provide specialized services, living costs are higher, which raises the question of how to pay for senior living. “When I travel across the country meeting families and seniors, I am often asked ‘What exactly is senior living and how do we pay for it?” says Elias Papasavvas, founder and CEO of Second Act Financial Services. His business focuses on helping older adults meet their financial goals. Fortunately, there are many ways to cover these additional costs, depending upon the individual’s needs and financial resources and the community. This series of articles will examine the common options for paying for senior living and what they should know about each. What are senior living communities? Senior living communities serve the full range of older adults, from those who are active and independent to those who need advanced care. Active adult communities offer low-maintenance residences, from apartments to condos and single-family homes. They are typically age restricted (for example, 55+) and provide common areas and activities for residents. Skilled nursing facilities provide a higher level of care, with medical professionals who monitor a patient’s health and administer treatment around-the-clock. Other options fall on a spectrum between those two, including assisted living and memory care. While many of these communities operate on a pay-as-you-go principle, others require more of an up-front financial commitment. For example, CCRCs (continuing care retirement communities, aka life plan communities) include the entire range of services from independent living to nursing care, with a guarantee of care for the rest of a resident’s life. They require a more substantial entrance fee in addition to monthly fees. Upon researching the options, the natural next question is “How do we pay for this?” How you can pay for senior living Seniors use various options to help them pay for a move to and stay in their desired senior living community. “Think of it like paying for college,” says Papasavvas. “College students and their parents often have to cobble together a variety of ways to pay for education. It can include some out-of-pocket funds, scholarships, grants, and loans. Same with senior living. Families typically pull together a variety of options to pay for senior housing and care.” These options include: Selling a home Bridge loans Retirement account withdrawals Sales of securities Loans against securities Life insurance settlements Long-term care insurance Veterans benefits Reverse mortgages Personal funds When it’s time to make a move, first decide where you want to go, based on your preferences and assessment of care needs. Decisions on how to pay go hand-in-hand with this choice. For example, if your first choice is a life plan community, you will need access to greater funds – or you may realize that the costs are beyond your financial means, so you choose a plan B. On the other hand, you might prefer an active adult community that requires fewer up-front resources. Financing senior living through sale of a home “The most common way families and seniors pay for senior living is through selling their homes,” says Papasavvas. Your home is one of your most valuable and most treasured assets. By following some basic guidelines, you can get the most benefit from the sale – and have more resources for your senior living options. Guidelines in making a smart sale Consider the timing. In addition to considering when you want to sell, consider the optimal time to sell. Late spring and early summer are generally the best times to sell a home. If you have a temporary place to stay between selling your home and moving into your preferred senior living community, you can achieve three goals: First, you can put your house on the market at the optimal time. Second, Papasavvas says, “Sometimes it is easier to show a home, and a home may show better, if you are not living in it.” Third, you can be patient and wait for a good offer rather than settling because you’re in a hurry. Understand the total cost or “basis” in your home. What do you think you can sell it for? Will it result in a gain or a loss? “If it results in a gain, be sure to speak with your accountant about the potential tax on that gain,” counsels Papasavvas. “As a CPA, I often see individuals who have sold their home, used all the funds from the gain, and did not realize that on April 15 there would be a gain on sale tax that is due and must be paid. Just about any accountant should be able to quickly help you understand the impact of selling your home.” Use an experienced real estate agent. A knowledgeable, experienced agent can better represent your interests and help maximize your gains. Prepare your home for sale. Will your home appeal to potential buyers? Will they fall in love with it and envision themselves living their best life there? Will they want it so much they’ll make you a great offer? If you want to answer a resounding “yes!” to all of those questions, follow these suggestions. Clear out clutter. A tidy, uncluttered home shows better than one filled with “stuff.” Conveniently, most people moving to a senior community need to downsize anyway, getting rid of excess furniture, knick-knacks, and other goods as they prepare for a new, smaller space. After decades of accumulation, this can be a massive task. Downsizing professionals can ease the burden. They charge for their services, but their resources for selling antiques and other gently used items make the investment worthwhile. Make essential repairs. Some home issues will turn off potential buyers, such as electrical and lighting problems, plumbing issues, mold, and so on. These repairs are worth fixing. On the other hand, some repairs either won’t make a difference or won’t reap you more money than you put into it, such as major kitchen and bathroom renovations. Consider curb appeal. Small touches can help a buyer fall in love with your home, such as a well-manicured front lawn, welcoming foyer, and fresh paint. Stage your home. Just like an actor preparing for stage or screen, the right makeup and costuming can present your home’s features at their best. Once you’re ready to show off your home, professional home stagers can help you achieve this magic. “Staging is NOT the same as designing,” explains Stacy Hernandez of StandOUT Home Staging and Design. “As a designer, my goal was to personalize and beautify my clients’ home and have it reflect their lifestyle and taste. … Staging is just the opposite. It is neutralizing the home. … It is converting a home into a house that can be merchandised as a product.” Papasavvas adds, “Take your personal photos off the wall so your prospective buyers can visualize their photos on that wall!” Use a professional photographer for your home photos. “Today, almost all prospective buyers start their search online,” advises Papasavvas, making great photos the buyers’ first impression. “When it comes to a home, buyers will evaluate the features and space, but at the end of the day, what closes the sale most often, is a ‘feeling’ they have as they walk throughout your home,” Papasavvas says. Read More Annie Tobey Annie Tobey has been a professional writer and editor for more than 30 years. As editor of BOOMER magazine, she explored a diversity of topics of particular interest to adult children of seniors. When she’s not writing, she can be found running the trails or enjoying a beer with friends.