A Real Life Story
I am currently advising an elderly couple who recently chose a beautiful apartment in a continuing care retirement community. The items on their retirement community “wish list” included the following:
- The apartment had to be no less than 1000 square feet.
- The community had to provide memory support and adult day care so the husband could maintain his independence and take care of his wife, who has been diagnosed with the early stages of Alzheimer’s disease.
- The entrance fee had to be between $299,000 and $350,000, or less. The contract had to be between 55% and 100% refundable upon their moving out. The monthly fee could be no more than $3,300 for two people.
- There had to be a washer and dryer in the unit.
- They wanted a formal restaurant and an informal dining venue.
I was able to find four communities that fit those parameters.
The state of the real estate market has left many of the communities with empty apartments. I thought I would share some of the “deals” that the communities offered my clients to make moving in more attractive.
One community offered a deal to waive the second person’s entrance fee of $29,000. It also offered to waive the monthly fee of $3,100 for an entire year. This cost covered both people. Sounds good, right? The catch was that the senior had to make a decision in a 2 week period. And the Admissions consultant failed to point out that the deal was based upon a “standard” contract. Standard means the entrance fee decreases at a rate of 2% per month for a 48 month period and is non-refundable after that. The standard contract entrance fee was around $235,000, in contrast to the 90% refundable fee that was closer to $400,000. Last, the deal was only applicable to certain apartments, some of which were less desirable than others.
Another community was willing to give the couple $5,000 to use in any way they wished. This might include waiving the second person monthly fee for 6 months, a contribution towards moving expenses, or use of a stager to assist in selling their home.
And speaking of selling their home, I need to bring up the home purchase program that was offered at several of the communities. This is a program whose fees are paid by the retirement community offering the service. (I had to ask the question in order to find out that piece of information). The program works like this:
- The senior or couple is assigned a sales counselor who guides them through the process of the sale, and advises them on current market conditions.
- The couple receives two comparative market analyses that the counselor reviews with them to determine the listing price. During the explanation of the process, it was never mentioned who provides the analyses.
- The would-be home seller is given the choice of 2 of their real estate agents (besides the counselor). When I asked where the agents came from, the admissions person said, “Oh, they just don’t let anyone sign up for this. These agents have to go through rigorous training to be selected by this organization.” Nevertheless, the senior must utilize one of their agents.
- The counselor advises them of contract negotiations, closing, and follows through until the sale is complete.
OR, The company will buy the house at 91% of the final appraised value if it does not sell after 150 days. I was assured that some of the homes sold for more than the listed price. I said I wanted to talk with those sellers.
In the end, my clients chose a 1,400 square foot apartment that was 90% refundable. I negotiated a waiver of the second person monthly fee for a year instead of six months. All other “wish list” items were included, except they had to install a washer and dryer.
Here’s the bottom line. If a senior is going to fly this rocket to new “independent” living, you better be certain someone who knows the territory is along for the ride. My client is a former attorney and is very sharp. However, with all of the details and “fine print” that were being fired at us, I had to re-explain things several times to make sure he understood everything. I am willing to be your loved one’s co-captain on the ride. If you have questions, go ahead and “fire away”! (I can be reached at 708-442-7174).
Contact Andrea Donovan you’re looking for a retirement community, and would like help like help evaluating incentives, comparing bargain offers, or understanding the “fine” print in the contract.
Andrea Donovan Senior Living Advisors
361 Nuttall Road Riverside, IL 60546 708-442-7174 708-415-2934 (cell)