Real Estate

Thinking of moving?

Local Realtor urges seniors not to wait to sell their homes

Roger and Margaret Smith had always thought of themselves as in the "we're going to die in the house" scenario.

Then Margaret hurt her knee -- and suddenly gardening in the Woodside home where they'd lived for 42 years wasn't quite so attractive.

Oddly, the very day she fell, the Smiths had arranged to have a conversation with Kaye Sharbrough of Senior Seasons, a home referrals and resources company.

They figured they could stay in their home for another five years, Margaret said.

"Then I fell, and I realized it was a fantasy," she said. "Even though we had prepared the house with all the things older people need -- we were in our 80s -- life changes."

Soon they were checking out The Meadows of Napa Valley, a retirement community not far from their son and his family. And they realized they'd need to sell their Woodside home quickly.

Sharbrough introduced them to Chris Iverson, a sales associate with Dreyfus/Sotheby's International Realty in Menlo Park, who offers a free report on downsizing at StressFreeMove.info.

Iverson likes to call himself "a matchmaker" or "the quarterback" or "the catcher."

He's been in the real estate business for about 10 years after working for IBM, consulting in the biotech and pharmaceutical industries, and he finds many older people are stymied about downsizing from the family home.

In the past, he said, people would downsize in steps, first moving to a place where they could get help with cooking and cleaning while they "did the fun stuff. Now people are pushing back, skipping independent and going straight to assisted," such as Sunrise of Palo Alto, an assisted-living community.

"I deal with people who wait too long," he said, describing a situation where the homeowner had caregivers 24/7. While the caregiver stayed in the master bedroom, the homeowner had a smaller bedroom, sat and watched TV all day and subsisted on Spaghetti-Os.

His preference is to work with people long before the kids need to intervene.

That's what he found with the Smiths.

"We looked around at 40 years of stuff. That's where it all kind of gets stuck," Iverson said.

"That was the only thing they were worried about -- not what the house would sell for, expenses like Realtor commissions, just how do we actually accomplish this? ... How do we get from sitting here with a houseful of stuff to a two-bedroom condo in Napa?"

Iverson connected the Smiths with Managing Moves and More, a Mountain View company specializing in expediting the moving process.

"These people come in and all we have to do is stick dots on 'what I want and don't want'; they worry about the logistics," Iverson explained.

"Putting dots on is easy. Acting on those decisions is difficult because it's boring and slow," he said.

For some clients, that process is very freeing, he said, noting that the moving pros coach along the way, asking such questions as, "When was the last time you wore the sweater with the reindeer on it?"

"Shoes are a classic example. Very few 75-year-olds need high-heel shoes. You can really divest yourself of a lot of shoes," he said.

The moving company deals with the issues of what can be kept (and moved), what can be sold at a consignment store, what can be donated and what recycled.

"Both companies (also On the Move in Woodside) try to have zero go to the landfill," Iverson said.

"I'm from a long line of Yankee tinkerers," said Roger Smith, a former minister at Woodside Village Church and retired psychotherapist. "I have a reason to save things because I could find a use for them. I squirreled away a lot of stuff. It was overpowering. Chris has a mantra: 'Take what you want, the rest will simply disappear,'" he said.

Margaret was no slouch herself when it came to accumulating stuff.

"I had so many unfinished projects ... (like) inkle-loom weaving," she said. "I had a lot of things I was going to do someday -- that was 30 years ago."

The couple had self-published memoirs from their parents as well.

"I want to work on my memoirs now. I could do that once we left the house."

The Smiths needed to put the house on the market quickly.

"It was August. We never would get Roger out unless we moved within three weeks," Margaret said.

At first, Margaret was resistant to staging.

"Chris helped me understand what it was for. He shared market information," she said, and he helped the Smiths finance the upfront costs (about $20,000).

"We certainly were in the totally retired category, not rich Woodside folks," she said.

"We didn't have to do anything except do some packing," she added, with help and a lot of direction from Managing Moves' staff.

In the meantime, Iverson was working on selling the house.

The house was painted, inside and out; people came in and freshened the yard; and the interior was staged.

The house was built in 1928. The buyer "had to be someone with a sense of 'here's what can be done with this place.' It was a problem property as far as I was concerned," Roger said.

"After being there for 40-some years, I didn't know anything about selling property," he said, adding that escrow closed 71 days after Margaret fell. (The house actually sold in 54 days, he said.)

Then the Smiths were hit with capital-gains taxes.

But, Margaret said, although the taxes were huge, "the sale of the house could pay off all debts and still have resources ahead to take care of us in a continuing-care community. That was one of our goals. Honestly, until we met Chris I had no idea how to do it."

Looking back, a year and a half later, Roger said: "It's important for people who are thinking of a downsize move: Do it before the crisis hits. And you never know when that will be. As you get older, stuff happens."

"When you get to be 80, it pushes the frailty index a little higher," Margaret added. "Think about moving while you're still mobile. It's really tough on the body, on the mind. It's taken us about a year to adjust to a whole different lifestyle."

Associate Editor Carol Blitzer can be emailed at cblitzer@paweekly.com.

Comments

18 people like this
Posted by Neal
a resident of Community Center
on Apr 27, 2015 at 6:59 am

This is a very self serving article. The sales person's real goal is to generate a princely commission and the Smiths get to write a huge check to Uncle Sam.


13 people like this
Posted by Actually
a resident of Another Palo Alto neighborhood
on Apr 27, 2015 at 10:46 am

Actually, the real estate agent's real goal is to advertise and generate business. How this article could be viewed as anything but a free ad is ridiculous.

And seniors: Many, many real estate agents will do the same type of service for you, nothing special here.


10 people like this
Posted by Not selling
a resident of Adobe-Meadow
on Apr 27, 2015 at 12:26 pm

We have been thinking of moving. However, if we sell our house, we will have to pay hefty taxes ("write a huge check to Uncle Sam" as Neal above says). It is very dissuasive of selling. At minimum, we would hold on to our house and just rent it if we were to move.


2 people like this
Posted by question
a resident of Another Palo Alto neighborhood
on Apr 27, 2015 at 12:30 pm

I have a question: I am confused, does one have to pay the 3.8% "Obamacare tax" on capital gains from the sale of a house (above the amount permitted as gain by law, what is it 500K for a couple?!) If so, then this is a deterrent to selling my home and would let the federal government "cash in" on my more modest gains (than some featured in local news stories -- I am not elderly/very longterm homeowner with huge gains, but need to have profit to move elsewhere and buy) Thanks if anyone can answer about the Obamacare tax.


4 people like this
Posted by Jerry Underdal
a resident of Barron Park
on Apr 27, 2015 at 12:53 pm

Jerry Underdal is a registered user.

@Not selling

"At minimum, we would hold on to our house and just rent it if we were to move."

I think a lot of long-time home owners are thinking along the same lines. Why sell if you have low or no mortgage payments to make and get to keep almost the entire rent (minus tax and insurance, and the tax is low due to Prop 13 protection.) Recently purchased homes don't yield the same profit. Even so, new homes that have been purchased as investments are often rented out at handsome prices by absentee owners who choose not to pass up significant income potential by creating a "ghost house" in the neighborhood while they wait for an opportune time to relocate here.


Like this comment
Posted by musical
a resident of Palo Verde
on Apr 27, 2015 at 1:26 pm

@Jerry, in the case of this Woodside property, hotpads.com shows it rented for $3300/month a year ago. Don't know what percentage a property manager would get if an owner doesn't want all the hassle of being a landlord. Zillow or Trulia show current value near $1.6M, more than a 30 percent increase since the $1.2M sale 19 months ago. New owner probably put some amount into rehab, but still a very nice return on investment. I guess the Smiths' son didn't want to inherit the place, or the family needed the liquidity. I wonder what a professional financial advisor would say.


1 person likes this
Posted by xPA
a resident of another community
on Apr 27, 2015 at 8:39 pm


The answer to 3.8% tax question is yes, you pay it on the sale of the house, subject to the 500K exclusion on the profit (plus the exclusion of 250K for couples). Don't forget California's extra tax on a large capital gain too.

I do enjoy hearing people complain about needing to pay taxes on their large capital gains that they worked so hard to achieve. Don't worry, the rest of the country has tremendous sympathy for those suffering from large capital gains.




1 person likes this
Posted by musical
a resident of Palo Verde
on Apr 27, 2015 at 9:41 pm

Makes sense to inflate the prices of everything and then tax it as capital gains.


2 people like this
Posted by question
a resident of Another Palo Alto neighborhood
on Apr 27, 2015 at 10:00 pm

Thanks for the info, I wasn't sure. It won't be that much of a windfall for us with all these taxes. I think we are going to stay unless we can move out of area. Our current property isn't ideal for us but wouldn't be worth leaving under the current tax situation. No, we are not elderly Prop 13 people.


6 people like this
Posted by TaxRape
a resident of Another Palo Alto neighborhood
on Apr 28, 2015 at 5:57 pm

We need a bigger home on a bigger lot, but the tax situation is such that you pay capital gains tax even if you roll over the profit immediately into another house. That means we will not have enough money left to buy down a mortgage low enough to have reasonable payments ( by reasonable, I mean under $6,000/month), even though we only owe $130,000 more on our house.

This tax law is making home ownership impossible for anyone who is 't a multi-millionaire at the very least. Unless we move to a rust belt state, the only way we can continue to be homeowners is to stay cramped like sardines in our current house.

Just think, Obama wants to get rid of the mortgage deduction completely. That oughta nail the coffin shut on the housing industry


1 person likes this
Posted by musical
a resident of Palo Verde
on Apr 29, 2015 at 5:28 am

What mortgage deduction? If you make a decent income for around here**, Schedule A sends you to the Itemized Deductions Worksheet and you lose tens of thousands off what should have been deductible.

** upwards of a million ;-)


Sorry, but further commenting on this topic has been closed.

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