As a real estate agent, I have seen home buyers who are downsizing and buying their retirement home make mistakes that can be easily avoided. The key is to understand that the home buying process is different for retirees, and there are specific factors to consider, such as budget, location, and lifestyle. By sharing my insights, I hope to help retirees avoid common mistakes when buying a home during retirement.
Mistakes People Make When Buying a Home for Retirement
1. Buying a Home that is Not Accessible Friendly
One big mistake that retirees make when buying a home is that they don’t always consider the possibility of mobility issues in the future. Feeling agile and able-bodied when downsizing, they overlook their future needs and the challenges they may face when navigating stairs or even the possibility of requiring a wheelchair.
This oversight can result in the mistake of purchasing a home that is not suitable for their future needs. They might end up buying a home that has too many stairs and lacks a first-floor bedroom. Or buying a home that does not have doorways wide enough to accommodate a wheelchair.
2. HOA with Poor Financials
One common home buying mistake that retirees make is they fail to research the financial state of the homeowners association (HOA) for the property they are interested in.
The result is they end up buying a home in a community with poor financials, low cash reserves, and aging common areas.
Unfortunately, this is a costly mistake. Getting hit by HOA assessments can be a significant burden on their finances.
It’s important for retirees to research and analyze the HOA’s financials before making a decision to buy a home in a particular community. This will help ensure that their new home will not become a financial burden in the years to come.
3. High HOA
One common home buying mistake that retirees often make is buying a home within a community that has high Homeowner’s Association (HOA) fees. This tends to happen because retirees are attracted to the amenities that come with high HOA fees, such as access to a golf course, clubhouse, tennis courts, marinas, and other perks.
But what they don’t realize is that this adds a significant amount to their monthly expenses, which can be a burden on their retirement income.
Another issue with buying a home in a community with high HOA fees is that it can make selling the property difficult later on. High HOA fees can be a turnoff for potential buyers, which can lead to a longer time on the market and difficulty finding a buyer.
Plus, properties within communities with high HOA fees tend to not appreciate in value as much as other properties, due to the added expense and the fact that not everyone is willing to pay for those amenities.
It’s important for retirees to carefully consider the HOA fees before buying a home, and make sure that they can afford the added expense within their retirement budget.
4. Buying a Home Too Far from Good Healthcare
One of the common home buying mistakes retirees make is buying a home that is too far from good healthcare facilities.
Retirees often don’t take into account their future healthcare needs. This usually happens when they are on a budget and end up purchasing a property in a location that is further away from big cities, where healthcare facilities are typically better.
It is important for retirees to carefully evaluate the healthcare options in the area before committing to a new home, as access to quality healthcare can become increasingly important with age.
5. Buying a Home that is too Far from Family
One of the most common mistakes that retirees make when buying a home is choosing a location that is too far from their family. This typically happens with people who have downsized too early and fail to realize the importance of being close to their loved ones.
At the time of moving, they may not have grandchildren yet or have underestimated the need to be close to family. As a result, they find themselves in a situation where they have to move again to be closer to their family, which can be a costly and time-consuming process.
It’s important for retirees to consider their family’s proximity when choosing a new home to avoid this mistake.
6. Buying a Home with Too Much Maintenance
One of the common mistakes downsizers make is buying a home that demands a lot of maintenance. It’s common for retirees to overlook practical considerations when choosing a retirement home and prioritize their dream home aspirations instead.
This is a mistake in the long run. For example, they may end up buying a home with a large yard that could be challenging to maintain or require expensive upkeep that may not be feasible with their retirement budget.
It’s important for retirees to be practical when choosing a home that they can comfortably live in through their golden years.
7. Putting Too Much in Down Payment
Retirees often make the common mistake of not budgeting their finances correctly and end up investing a significant portion of their savings in buying a home in cash or putting a large down payment.
While this may seem like a sound decision, it can often leave them with limited liquidity and no cash reserves to tackle unforeseen emergencies or other financial needs.
This happens because they fail to take into consideration the additional expenses that come with owning a home, such as property taxes, maintenance costs, and repairs.
As a result, they end up being cash-strapped, unable to fund their financial needs and emergencies. Retirees need to take a holistic view of their finances, account for all expenses, and budget wisely to ensure they have enough liquidity to tackle any unexpected financial situations that may arise.
8. Buying in a Wrong Location
When it comes to buying a home in retirement, one common mistake that retirees make is choosing the wrong location. Often, retirees envision themselves spending their golden years in a warm and sunny location, preferably near a beach and perhaps even a golf course. However, the reality is that this lifestyle may not be suitable for everyone, and the weather may not be as enjoyable as anticipated.
To avoid making a costly mistake, it’s important for retirees to take the time to carefully consider their options before making a decision.
One way to do this is by renting first, to get a sense of what it’s like to live there. This will allow retirees to experience the place, climate, and amenities firsthand, and make an informed decision about whether or not it’s the right place for them to retire.
Plus, renting before buying can also help retirees avoid the stress and financial burden that comes with owning a home in an unfamiliar location. By renting first, retirees can get a sense of the cost of living in the area and whether they like it or not.
Home Buying Checklists Printable
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