Forego the Winnebago! More older adults opting for active-adult
communities
There used to be a stigma attached to older adults—once
they hit 55 they automatically bought mammoth trailers and spent their
retirement years traveling the U.S. with no more mortgage worries or
lawns to mow.
But with the healthy real estate market
over the past few years, more older adults are opting to purchase
homes in what’re now called “active-adult communities,” luxurious
communities designed for buyers 55 years and up with an array of
activities and amenities such as golf courses, clubhouses, greenbelt
trails, hobby centers, and computer labs—all
wrapped into a country club setting.
In the past, real estate agents often shied away from homeowners over
age 55, who then tended to be less likely to move, concentrating
instead on younger people in full trade-up mode. But with 78 million
baby boomers in the U.S. getting older every day, this type of market
can turn into big profits for agents, especially those who specialize
in serving older buyers.
A recent poll of 1,174 residents age 40
to 70 by active-adult community home builder Del Webb found that 45
percent of baby boomers expect to move to another home in retirement.
And, 26 percent of those boomers say they’re considering purchasing a
home in an active-adult community, which in most cases requires one
resident to be older than 55 and doesn't allow anyone younger than 19
to live there.
To keep up with what is expected to be a
lucrative market over the next few years, more agents are becoming
certified Senior Real Estate Specialists (SRES), REALTOR®-qualified agents who undergo
courses to sensitize them to the needs of relocating seniors. A
national program since 1998, the Senior Advantage Real Estate Council
(SAREC) has a membership of more than 7,000 and has become the sixth
largest real estate designation.
Agents who want SRES designation must be
a REALTOR®
for a minimum of five years or have another recognized designation.
The cost is about $400 for a one-year membership and agents must
undergo a 12-hour training course and be members of the SAREC council,
which provides tips and advice of how to market to older adult buyers.
And while many adult communities are
popping up in popular vacation spots like Florida, Arizona and Texas,
many boomers want to be easily accessible to their grandchildren.
Further, the Del Webb survey also found that 24 percent of boomers
expect their parents or in-laws to move in with them eventually, and
25 percent expect their grown children to move back home.
So although boomers want a resort-like lifestyle, they also want
proximity to metropolitan regions near family. Developers are
responding by building communities on the outskirts of big cities. So,
there’re likely a few of these types of communities in your area and
that could translate to money in your pocket for years to come.
E&O insurance: don’t
sell a home without it
Real estate is becoming more complex with each transaction bringing
about the potential for more and more lawsuits. Real estate agents are
increasingly finding themselves caught in the crossfire between buyers
and sellers, making errors and omissions (E&O) insurance a necessity.
Common claims filed
against real estate professionals range from misrepresentation of a
property’s physical condition to failure to negotiate a sale. And, if
a claim is filed against you and you don’t have E&O coverage, the
result can be disastrous for you and your business.
State insurance commissions, consumer groups and professional
organizations offer advice on how to avoid being taken to the cleaners
on your E&O insurance. We’ve rounded up some of the most often cited
tips:
● Check and
see if the insurance agent and company you are dealing with are both
licensed to do business in your state. Your state's department of
insurance or related department will have contact information on the
state's website and also in the blue pages.
●
Never pay the insurance
agent, only the insurance company itself. When you write a check for a
down payment or a premium, always make it out to your insurer. Beware
agents who want you to make the check out to them personally. And
never pay in cash!
●
On a similar note, get a receipt
for everything. Always get written receipts following the payment of
your premium that includes the name of the insurance company and the
agent and/or agency.
●
Never sign a form that includes
blank spaces, even if the agent assures you they are just a formality.
●
Ask for a copy of all documents.
Especially, but not exclusively, anything you sign! Save every piece
of paper explaining your coverage and your policy. Keep them on file
with your policy. If the agent uses a laptop computer, insist on a
hard copy version of what you were shown.
●
If you do not receive a policy
within two weeks of applying for insurance, contact the insurance
company, and if necessary, your state's department of insurance.
●
If a new policy replaces an old
policy, make sure the old coverage is not terminated until the new
policy has been issued.
E&O insurance bullet-proofs you and your business from the dangerous
and growing litigation trend in the real estate industry. Investing in
a good E&O program can bring you peace of mind in the event a claim is
filed against you.
