(This is Part 1 of a two-part series. Read Part 2, “Hot Realtor niche now 15,000 strong.”)
Some of the newer real estate sales models focus on the speed and resources of the Internet, hoping to lure the under-35 generation, sometimes known as the iPod generation, with a high-tech approach to residential transactions. Significant “face time” is not a critical component.
However, a huge segment of the population still prefers high-touch to high-tech, specifically persons over the age of 65 — already the largest group of property owners in the U.S. According to the Census Bureau, senior citizens in this country, persons 65 and older, have approximately $2 trillion in home equity. The American Association of Retired Persons, or AARP, estimates that 83 percent of seniors own their own homes and nearly 8 million of them will move residences in the next two years.
Many homeowners will absolutely stay put, or “age in place,” simply because what they have now — house, neighborhood, friends, church, club — is exactly what they’d like to keep. Many others, who seek the same environment, will sell the beloved family home they’ve occupied for decades yet remain in close proximity to it and perhaps add a weekend retreat or second home in the sunshine. This niche does not have a housing issue; it has maintenance and service issues.
Given the numbers and the need for specialized services (not to mention the astounding number of baby boomers who will soon enter the senior category), it is no surprise that the National Association of Realtors decided to put a bit more energy behind its Seniors Real Estate Specialist (SRES) designation. Professional designations and niche marketing can be powerful tools in the competitive world of real estate, and serving the prime “last move” segment makes a lot of sense.
Catering to older clients often requires a different and more time-consuming role — just ask any reverse-mortgage specialist. That role, more of a counselor than salesperson, often means delayed financial compensation. Initially it can mean coordinating the efforts of tax advisors, lawyers, estate planners, specialized lenders and family members. The good news for agents is that older clients usually are extremely loyal and typically return — and refer their friends — to the agent who served them.
Earlier this year, the SRES designation left its 10-year California roots to officially become an active part of the official NAR family in Chicago. In 1998, the California-based Senior Advantage Real Estate Council (SAREC) became a poorly promoted national program designed to focus on the needs of buyers and sellers 50 and older. The council offered the SRES designation to real estate agents who completed its education program.
The reasons for the move to Chicago and the national spotlight vary, but the bottom line is numbers, need and potential compensation. Seniors and baby boomers are now largely co-mingled to include any owner over the age of 55, and specifically targeting the different buyer types — move-down, empty-nest, last-time, retirement and second-home — is big business.
The SRES course includes topics such as distinguishing characteristics and trends related to the 55-plus population; housing, finance and retirement-income considerations of these consumers; outreach methods for building 55 and older clientele; and counseling strategies to help clients and customers plan ahead for life transitions. Broker/agent participants can learn:
- Key differences in housing options, from age-restricted communities to age-in-place design to assisted living;
- Applications of the Housing for Older Persons Act (HOPA);
- Ins and outs of reverse mortgages;
- How to use pensions, 401k accounts and IRAs in real estate transactions;
- Ways in which Medicare, Medicaid and Social Security affect real estate decisions of clients and customers who are 55 and older;
- How to recognize and protect their clients from mortgage finance and loan schemes and scams that target 55-and-older borrowers.
One of the changes NAR might want to consider is renaming the designation. Seniors simply don’t like being called seniors. John Rude, president and CEO of Eugene, Ore.-based John Rude and Associates, a consulting firm that explores gerontology (the study of aging), marketing and communications to specific age groups, told attendees at a National Association of Home Builders gathering to avoid “seniors,” “elderly” and “golden-agers” because they are labels that carry negative stigmas.
Fifty, reportedly, is “the new 30.” While the housing needs of a 75- to 80-year-old don’t always match the 55-60 group and the “active adult” moniker, they still will be bundled in the future for statistics, products and a Realtor designation.
If you could rename the Seniors Real Estate Specialist (SRES) designation what would it be? Send your appropriate suggestions to email@example.com and we will publish the top five finalists.
Next week: Why over 55? Why not over 60 or 65?To get even more valuable advice from Tom, visit his Second Home Center.