When You’re This Age, Your Home Value Starts Taking a Massive Hit

If you’re planning to downsize and fund your golden years with the equity in your home, you might want to check the calendar. It turns out that when it comes to real estate, timing isn’t just about the market — it’s about your age.

A recent study suggests that once a seller hits 70, the price they get for their home starts to drop. And it’s not a small dip. By the time a seller reaches 80, they’re often walking away with significantly less money than their younger neighbors for the exact same type of house.

The senior discount nobody wants

According to recent research by the Center for Retirement Research at Boston College, home sellers aged 70 and older sell their homes for about 6.6% less than younger sellers. If you’re 80 or older, that gap widens even further.

We aren’t talking about a few dollars here. On a $400,000 home, a 6.6% hit means leaving $26,400 on the table.

Why is this happening? It isn’t necessarily because buyers are out to get seniors. It’s usually a combination of two things: the condition of the home and a desperate need to move.

Deferred maintenance is a deal killer

I’ve seen it many times. A couple moves into a house in their 40s, keeps everything pristine for two decades, but then starts to slow down. Maybe the roof is 25 years old or the HVAC system is whistling a tune it shouldn’t be.

When you’re 75, the idea of overseeing a $15,000 kitchen remodel or dealing with a messy roof replacement feels like a nightmare. So, you don’t do it.

You list the house “as-is.” Buyers, being the skeptics they are, see those old systems and start slashing their offers. They aren’t just subtracting the cost of the repairs; they’re subtracting a hassle tax on top of it.

(Related: “How to Increase the Resale Value of Your Home”)

The motivation trap

Another reason older sellers get less? They often have to move. Whether it’s for health reasons or to be closer to family, a seller who needs to be in an assisted living facility by next month doesn’t have the luxury of waiting for the perfect offer.

Buyers and their agents can smell that urgency. If a house has been on the market for 60 days and the seller is already living in another state, the lowball offers start flying.

How to protect your equity

If you’re approaching those “expensive” years, you don’t have to just accept a lower price. Here’s how to keep your equity in your pocket:

• Sell sooner than you think: If you know you’re going to downsize, don’t wait until a health crisis forces your hand. Selling at 65 instead of 75 could save you tens of thousands of dollars.
• Keep up with the small stuff: It’s much easier to fix a leaky faucet today than it is to explain a water stain to a home inspector three years from now. Check out these low-cost ways to kick up your curb appeal and stay on top of things.
• Consider a pre-listing inspection: Spend a few hundred bucks to find out what’s wrong before you list. It’s better to fix a problem on your own terms than to have a buyer demand a massive credit at the closing table.
• Watch out for common errors: Don’t let simple mistakes tank your price. Take a look at these 5 common mistakes to avoid when selling your home.

Selling a home is one of the biggest financial transactions you’ll ever make. Don’t let your age give the buyer an accidental discount.