After the real estate market collapsed, retirees were hit especially hard – if they aren't able to find a buyer for their home, they can't move into a retirement community. But one nonprofit is helping senior citizens make the transition, by assisting them with the sales process. NBC's John Yang reports.
By John Yang and Carol Eggers
PHOENIX — It was something Lee and Al Rose had planned for years: selling the big house where they’d lived for nearly two decades and moving into a retirement community. When they decided they were ready, the bottom dropped out of the real estate market.
“We had it up for sale for two-and-a-half years,” Al, a retired executive, recalled. “And we just kept dropping the price, dropping the price, dropping the price. We were getting frustrated.”
And the unit they’d reserved at nearby La Loma Village was sitting empty all the time, not generating monthly fees for the community’s not-for-profit operator, Sun Health.
That’s when Sun Health stepped in. In exchange for promising to use the proceeds from the house sale to pay the upfront entrance fee, the Roses could move into their new apartment — and Sun Health would fix up the Roses’ home and try to sell the house themselves. If they couldn’t sell it in 90 days, Sun Health would buy it.
The house was gone in two months.
Lee Rose said it was a great relief “to get rid of it and not have any worries or responsibilities. You moved out, handed in the key and let them handle it from there.”
The real estate bust has hit retirees especially hard because so many of them were planning to use the proceeds from the sale of their house to buy spots in retirement communities, which costs an average of about $250,000, according to the National Investment Center for the Seniors Housing and Care Industry. Steve Maag, director of Continuing Care Communities for LeadingAge, an umbrella association for not-for-profit senior groups, estimates that as many as 60 percent of the nation’s 1,900 continuing care centers offer some sort of assistance such as home staging and repair programs or no-interest bridge loans.
Cindy Murphy the owner of Downsizing Simplified in Raytown, Mo., with advice on staging and decluttering for seniors hoping to sell their house and move into a retirement community.
Most common is staging -- professional help to make a house more appealing to potential buyers.
“We can help stage their house so it really is not only going to sell quickly, but it’s going to sell for the maximum price,” said Dan Rexroth, CEO of John Knox Village in Lee’s Summit, Mo., outside Kansas City.
John Knox is paying Cindy Murphy to help Jerry and Sherry Mustapha get ready to put their house on market for a move into the retirement community. She helped them clear their cluttered basement and do some redecorating.
“She has organized and put things against the wall and thrown away we don’t know how much stuff,” said Sherry Mustapha, a retired nursing professor. “It just looks so much better.”
“It will very definitely help move the house,” said her husband, Jerry Mustapha.
Sun Health’s “home exchange” program is one of the most comprehensive being offered. Since it began in 2010, 14 new residents of Sun Health’s three Phoenix-area communities have used it. To qualify, the mortgage has to have been paid off to avoid the complications of dealing with a lender.
Sun Health and the owners agree on a sales price. “We guarantee them a floor,” explained Sun Health COO Sharon Grambow. If the house sells for more than that, she said, the owners get the extra money.
“If we have to sell the house for less, it’s at our risk,” said Grambow.
In only six cases Sun Health had to take title to a house and in no case has the house sold for less than the agreed price.
Sun Health also pays to get the house ready to sell. Once the owners move into the retirement community, “we take over,” Grambow said. “We go in and we may completely redo the interior of the house, strip out old wallpaper, redo carpet, paint, landscape -- whatever’s necessary.”
In the Roses’ case, Sun Health replaced dated wallpaper with a fresher look.
For Sun Health, the cost and financial risk is worth it to fill empty units and generate monthly fees. Because of the real estate bust, “we’ve gone from waiting list to vacancies and we have to get people into our communities at the right time.”
NBC Nightly News desk assistant Craig Stanley contributed to this report.
Watch more of Nightly News' Road to Retirement series:
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