In this video and blog post we will share why it is so important that senior living communities know the truth about what home investors are trying to do.
The last several years have been hard on real estate investors. With property values going sky high and inventory being the lowest it’s been in a very long time, the “deals” literally dried up. So, now these so-called “professional home buyers” are calling on senior living operators and marketing teams for referrals to senior homeowners.
Here is what senior living communities need to know…
In the past, investors would simply canvas neighborhoods with flyers on door knobs, or they would put signs on corners announcing “We buy homes,” or “We pay cash for houses.” Now investors are beginning to target seniors.
The new professional home buyer exploits vulnerabilities
Investors are now setting their sights on an even more specific niche – longtime homeowners relocating to senior living communities, assisted living, and long term nursing care.
You might be asking yourself, why do senior homeowners present such a robust market for home investors?
Below are just 3 reasons:
- Homeowners having purchased properties many decades ago tend to underestimate the current value of their home. This makes even ridiculously low offers by investors seem more palatable.
- When people are stressed, grieving, tired, or recovering from illnesses, they are more susceptible to unscrupulous, unethical, or predatory business practices.
- Many seniors don’t check references. They tend to trust people with titles (despite proof of expertise or experience), especially when referred or recommended by senior community sales representatives they know and like.
CASE STUDY COMPARISON
Martha was exhausted after having cared for her husband of 65 years. Just two months after her husband passed away, Martha decided to sell her home and move to a nearby senior community where she had friends. The senior living community salesperson gave her a card of a local home investor named Mel who referred to himself as a “Senior Transition Specialist.” Mel made Martha an offer to buy her home and told her he would take care of any remaining contents if she didn’t want to hassle with them. He also told her that he would pay her closing costs and not require her to make any repairs. She was thrilled when Mel offered $210,000 cash for her home.
What Martha didn’t know, however, was that her home was valued at approximately $280,000. When Mel told her that a “fair offer” would be $210,000, she believed him. Maybe this is because her husband and she only paid $30,000 for the home nearly 40 years ago and maybe it was because her husband handled most of the household financial affairs. Either way, she assumed Mel was being honest and that he and the community were looking after her best interests.
After Martha moved, Mel put the house back on the market “as-is” and sold it in less than 90 days for a profit of about $50,000. He didn’t empty the house or even clean it. Essentially, Martha paid Mel a 25% “commission” equal to $70,000 for the conveniences he promised her.
Kenneth moved to the same community and also had a home he needed to sell. After being referred to Mel and checking his credentials, he found that the certification he proudly boasted was completely bogus, but he was curious nonetheless. Mel offered him $205,000 for his well-kept but dated home.
Kenneth decided to compare the offer made by Mel and reached out to a local real estate agent he knew of who specializes in helping seniors downsize. His REALTOR valued his home at approximately $285,000 and discussed the proven strategy for making his move easy and hassle-free. She arranged for and oversaw every aspect of the move and estate liquidation. Her preferred move management team helped Kenneth pack, unpack, and resettle into his new place. Her team arranged for an estate sale to empty the remaining items and a reputable house cleaner to tidy up after the sale was done. After providing Kenneth with verifiable updated information regarding the current real estate market and pricing, his home went on the market, sold, and closed in less than 90 days.
The cost to Kenneth for move management and moving fees were about $3,200. The real estate fees and closing costs were right at $23,000. After subtracting these fees from his home sale price of $280,000, Kenneth deposited a check in his account for $253,800 – almost $50K more than he would have received from Mel. For Kenneth, it paid off to get a second opinion!
MORAL OF THE STORY
There are services and support available to people who may be overwhelmed or who need some of their home equity to make the move. No one needs to sell to an investor and give up $50,000 (or more) for simplicity. There are better solutions that are far less costly!
What senior living community operators and marketing teams need to know:
When you see titles on business cards, be sure to verify credentials. Pay special attention to phrases like “professional home buyer,” “senior transition specialist,” or other such names. They are typically cleverly disguised investors.
Ask them what specialized training they received to qualify for these “credentials” and verify them through any governing bodies. Legitimate organizations offering specialized senior relocation training include (but may not be limited to) the following. Any of these organizations will gladly talk with you to verify the credentials of someone in question. (Remember, some people may have let their membership lapse, are not showing up on the directory correctly, or are new to the organization and not yet listed).
Certified Senior Housing Professional (CSHP) by Seniors Real Estate Institute
Certified Senior Downsizing Coach (CSDC) by Seniors Real Estate Institute
Certified Relocation and Transition Specialist (CRTS)
Certified Senior Advisor (CSA) by Society of Certified Senior Advisors
Members of National Association of Senior Move Managers (NASMM)
Senior Real Estate Specialist (SRES) designation by National Association of Realtors
Just to be clear…
To show you what the training involves for hundreds of “professional home buyers” (a.k.a. investors) who are targeting seniors through senior living community contacts, we’ve provided a few screenshots we took from a Facebook ad marketing their program. We have left off the name of the program intentionally to avoid legal issues. Rest assured this is not the only one offering such programs!
(Screenshots were captured in July of 2022).