Feature article
Helping Mum buy a home close to you
There comes a time when you want to have Mum closer to you so you can be there if anything goes wrong.
During Covid lockdown, you may have felt that your Mum was too far away for your liking, especially if you’re in different cities.
It would have been so much easier if she were living nearby so you could have dropped off groceries, a hearty meal or two during the week, and just checked she was okay.
In a lot of Kiwi households, conversations are now going on, is there any chance we could persuade Mum to come and live closer to us?
It would be great if you could just wave a magic wand and transport her to a darling cottage just down the road but there’s a bit of work to do before that.
Number one, does she want to live in the same town or suburb as you? Or are you going to be moving her away from her close circle of community and friends?
Is this move more for your own selfish reasons? She may have a perfectly happy life where she is but just might just need more support at times.
Meanwhile, selling her home and buying a new one is not an easy process. Would she need to sell her home first or could she buy near you prior to this? If she wants to sell first, she may not like the idea of living in a rental between the home she leaves and the one she goes to.
Ideally for elderly people, they will secure the property before they sell. “A lot of older people like to know they’ve got something to go to that they like,” says Ray White Mt Eden agent, John Covich.
Preparing Mum for the move
The chances are you won’t be able to buy Mum a house unless you’re a squillionaire but you can ease the way and support the move, whether you’re giving her a place to stay between homes, organising storage and more.
You may need to use your persuasive skills in the early conversations with Mum. A lot of women are determined to keep their independence and view going into a retirement village as the absolute worst case scenario. Telling your Mum that she’s likely to stay in her own home for longer if you’re nearby is a good point that may register.
Sometimes an intermediary can play a role. Wellington company TaskMasters offers personal assistance services to help people downsize and declutter before they go into retirement living. Director, Judy Thorpe, often plays a key role between the family and Mum, especially when Mum isn’t listening to the children, and often the grown up children aren’t listening to her either.
Judy sees the parent as her client. “Families want their mums to be safe, but often they are reluctant to take help from their children and their spouses, they still want to assert their independence and control,” she says.
The TaskMasters director will go through the home with an elderly client and ask what they want to keep, what to sell and what pieces to give to family members. She often finds they will listen to her more than their own family.
A lot of times families will treat their mothers like children, she says. “The main thing is you need to listen to them and respect the fact that they have a brain and can use it.”
Judy’s advice to families hoping to support Mum, is to try and do everything as early as possible and not take on everything in one go.
The advantage of making decisions earlier, says Judy, is that Mum gets to decide about where to move rather than having the decision made for her. “That’s the hard thing, making that decision while you can, rather than having it made for you.”
The first barrier an elderly parent will often put up is logistics. Judy will ask her clients to take small steps. “I’ll say, okay, today, have a look at your bookshelf, what can you get rid of. Another day, take a look at the wardrobe.”
“Focus on what you want to keep rather than discard,” is a tip Judy finds her clients respond to.
Storage is another thing that will play on Mum’s mind. Where are all her possessions going to go before she buys another house? A temporary storage unit can allow the home to be decluttered, and more decisions can be made when the move is underway, says Judy.
Drawing up a plan
So you’ve got Mum on board about moving closer, how are you going to help her sell her house and buy another one?
“It’s quite important to have a good plan about how you’re going to do it,” says Christchurch Harcourts agent, Michelle Ward. Most elderly people are not in a position where they can just go and buy something and sell their house after. If you’ve got a plan, you can be in touch with an agent who can be working on selling their house.
Some people are in a good position, they can buy something and rent it out at first, while they get their house ready for sale.
“Once you have a plan, you can go for it full throttle,” says Michelle.
What sort of home should you look for?
2 Dryden Street, Sumner, Christchurch City
You don’t have to be on the same street, as long as you can get to them within 10 to 15 minutes or so, she says.
Ray White Kingsland’s Tim Hawes thinks more people in their 70s and 80s, and younger, will transition to apartments, especially in Auckland. He can think of 10 different retirees who are owners of apartments near his Kingsland office and they love it, he says.
NXN Apartments, Kingsland
“They have a lift up to their apartment, some have holiday homes in the Coromandel, they have the buses and trains in Kingsland right there,” he says. They’re in a vibrant location, Westfield St Luke’s shopping centre is nearby and the grandchildren are happy to pop in.
Tremain Real Estate’s Brent Bastin, based in Tauranga, says one of the first things he asks family hoping to bring Mum closer is, do you want her within soup distance? In other words, could you carry a bowl of soup from your place to hers? For some, this is a bit close.
He suggests if you want to be able to pop in on Mum regularly, make sure her new home is en route to your home or work so it’s easy to stop in and see her.
10b Emerald Place, Papamoa Beach, Tauranga
Buying a home with independent living space or expanding your home to have a granny flat is another way to go.
Ray White’s John Covich had his mother-in-law living with him for 25 years, some of this time in a new home he built for her alongside his new family home.
Whether she’s coming to live with you or living in her own home, John stresses the sale of Mum’s home is not to be taken lightly. “Older people selling need every last cent they can get to maximise that asset.” So care in presenting Mum’s home for sale is key.
Mum’s next home is in a competitive market
You’ll be helping Mum buy in a very competitive market, says Tommy’s Real Estate agent, Scotty Griffiths, currently marketing a two bedroom Kelburn home getting lots of attention from retirees.
This market may well be more competitive than the market of the family home they’re selling, he says.
“You can easily be in a property worth $2.5 million and you go to downsize and you’re actually fighting in a busier market, it’s frustrating for people,” he says.
You'll have to prime your mother to be ready to make attractive offers, he adds.
“They’ve got to be prepared to act in a particular time frame, otherwise these properties sail by,” he says.
Helping with the finances
In an ideal world, you’ll have a spare $1 million to buy your Mum a home. But that’s a big ask and not many have that kind of cash lying around. If you bought her a home near you using equity in your home, and she then paid you back once she had sold her home, you would likely then come up against the bright line test, warns Mortgage Lab Tauranga adviser, Robyn Turner.
It may be that you decide to buy with Mum to give her some more disposable income. If you do that, then make sure that you have an exit strategy and that you sit down with a mortgage adviser to look at all the options for this and ensure you each have independent legal advice, says Robyn.
“The key thing is you need to sit down as a family to decide what you would really like to achieve. Does Mum want to buy the house on her own, or are you wanting to buy a house together which you will share together as a family? If you’re buying together as a family, it’s essential you get independent legal advice so all your interests are protected. If your decision involves Mum taking out a new mortgage, it’s important to discuss an exit strategy,” explains the mortgage adviser.
Options exist if you want to keep the family home as an investment property, or if you need to release funds to help a family member buy a property that you will also live in. It may be you need bridging finance to cover the time between buying one property and selling another. A mortgage adviser is the best person to guide you through these options, says Robyn.
A specialty product is also available exclusively to retirees, a reverse mortgage, which will allow them to release some of the equity in their property. For someone in their late 70s, for instance, who has paid off their mortgage, they would be able to get around 34% out of their home, says Robyn. Take advice on whether this is appropriate, she says.
But at the end of the day, the most straightforward way to do the move, is for Mum to buy and sell at the same time.
This can be done by either putting a conditional offer on a property subject to the sale of the home, or by selling first and staying with family while you and Mum house hunt.
“In a heated market, a conditional offer would likely need to be a good offer and ideally she would want to have her house ready to sell beforehand,” says the Mortgage Lab adviser.
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