Kathy & Ben
Find Your “Why”
Although the majority of Active Adult Buyers have bought a home in the past, buying a home in an Active Adult Community is a little different. It is essential that those you are working with understand the goals of the move, your “why”, and what you are trying to accomplish. Your “why” may be about right sizing and maintenance or perhaps wanting to be closer to the grandkids. Interview REALTORS that have extensive experience and particularly those that have worked in and understand the Active Adult client and communities. Then meet with your REALTOR to discuss wants, needs, timeframe, and other important considerations.
The Active Adult Community Lifestyle
When buying in an Active Adult community, understanding what the community has to offer is important. Does the community have the amenities you are looking for? Is an active social calendar vital? Are you looking for a workout place in the community? Are there county senior services nearby (think meals, activities, classes, etc.) or parks and trails that you would take advantage of?
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HOA Fees and What They Cover
Active Adult communities have Homeowner’s Associations (HOA) and association fees. Fees will vary from community to community in addition to the items that are covered. Single family homes typically cover lawn and common area maintenance, plus any amenities, but not the exterior of the home. Ranch or townhome condominiums cover exterior maintenance of your home (excepting HVAC typically) in addition to lawn and common area maintenance, plus any amenities. It is essential for you to understand fees and what is covered, and to ask for community financials. You should try to speak with a Board member as well to learn about the financial health of the community you are considering.
Possible Property Tax Incentives
It is also important to know which counties provide the better property tax incentives to Active Adult Buyers. Some counties Senior Tax Exemptions start at age 62, other counties could be age 70, while some counties offer no or extremely low Senior Tax Exemptions. If you are a veteran and/or disabled, you may be eligible for additional exemptions. Some counties may also have exemptions based on income or past occupations (typically law enforcement).
Financing Options for Buying a Home
Discuss your financing options when buying a home in an Active Adult community with your REALTOR, your financial advisor, and at least one loan officer. It is important that everyone understands your financial goals. Financing options would include paying cash; larger down payment and small house payment; smaller down payment and larger house payment.
You may also want to explore the option of purchasing before you sell your present home, then paying off the loan upon closing of your current home. You can even pay down the loan balance and have your monthly payments re-amortized for a lower payment.
Lastly, for some purchasers it makes sense to do a reverse mortgage so that you have a loan but with no monthly payment. In this case, the loan balance will accrue interest until you move out. At this point, you can sell the home and keep any proceeds after paying off the loan. Or, if for some reason the balance is higher than your potential proceeds, you can simply hand the keys back to the lender and walk away.
New Construction Lenders
Some builders offer incentives in either price concessions or closing costs to buyers. Builders offer these incentives because sometimes they own the mortgage company. However, in all cases, the preferred lender has a proven track record of customer service and on-time closings.
Usually, these lenders have very competitive terms (interest rate, loan options, etc.) but you should speak to at least one other experienced mortgage broker for comparison.
Bottom Line
You can see from this post, there are many reasons to find an experienced buyer’s agent to help you navigate the home buying process in an Active Adult community. Our team has years of experience helping Active Adult clients, please call us at 678-252-9477 for a no obligation conversation about how we can help you. Note that when you work with us, we are paid by the seller/builder at no cost to you.