Dear Edith: I'm responding to the person who thinks that neighbors shouldn't be welcome at an open house. The house across the street from me is now occupied by the family who lived across from me at a former location. And the house about six doors up the street is now occupied by the family who bought my house at my former location. You just never know who knows someone who is looking and is known to be a good neighbor. — S. J.
Answer: I suspect brokers are usually glad to welcome anyone to an open house. Even if the visitors never turn into customers, it's always helpful to have a bustle going on.
It'd be interesting to hear from real estate agents. How do they feel about folks who are not ready to buy but visit open houses?
Costs So Little
Dear Ms. Lank: I've been trying to get my folks to move to a great senior housing facility near me, but my mom says they can't afford it because their house is paid up and costs them practically nothing. Maybe you can explain it to them. — J. K.
Answer: A paid-up house is comforting to anyone who lived through the Great Depression. Many older people feel safe in a house that is free and clear. This emotional satisfaction is valuable.
The drawback comes if it prevents your folks from selling a house that no longer serves their needs. A paid-up house is often as expensive as any other form of housing. It's just a question of where you choose to keep your money invested.
If they've been there a long time, they may not realize how much the place is worth today. The IRS would probably let them keep all the proceeds from the sale of their longtime home. They might well realize enough income for the purchase or long-term rental of an apartment or other housing in a retirement — or resort — area. If they were to make the move to senior housing, they would no longer have their present expenses for property taxes, homeowners insurance and maintenance costs.
What's important is realizing that as the owners of a paid-up home, they do have an option. Each day they remain there, they're making the choice to keep their money in the house instead of, perhaps, an income-producing investment or retirement housing.
Those who are comfortable where they are can, of course, remain. The emotional stress of uprooting can be a serious consideration for the elderly. And in most areas, all sorts of assistance are available to help senior homeowners remain where they are — called "aging in place." But if they'd prefer to move, they probably could. They're not tied to that house.
This next letter came as a brief email.
Edith: Don't you mean $250,000 ($500,000 per couple)? — D. S.
And it got a one-word answer: Yes.
In the letter D. S. refers to, someone was asking about the chance for homeowners to take tax-free profit when selling their main residence. It was once a possible $125,000 profit for sellers over 55, up to twice that for a married couple filing jointly. In 1997, the maximum amount was doubled and the age limit was eliminated.
Around where I live, it seems unlikely any couple would have a half-million-dollar profit when selling. At any rate, if you and your spouse made that much when you sold a principal residence you'd owned and occupied for at least two of the five years before the sale, as far as the IRS is concerned, you're home free.
Although, come to think of it, you're no longer in your home.
Dear Edith: What is the history of real estate? — A. H.
Answer: Sorry, A. H., but I'm not going write that term paper for you.
Edith: What might my house be worth? I know it's hard to say without an appraisal. It's occupied rental property. I've been in this state six years, so you can be lenient; a low and medium-to-high guess would be fine. I won't hold anything against you. A ballpark figure will be fine. — R.
Answer: That was the whole message, so all I can say is good luck to you.
Contact Edith Lank at www.askedith.com, at [email protected] or at 240 Hemingway Drive, Rochester NY 14620.