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Today, in our series on interviews, we are featuring an interview with Mark Lederer. Mark is a real estate advisor, as opposed to a real estate agent and you will find out why in his answers below. Mark works with his wife Katie as a team, in the Bay Area of California and they have been top performing agents in the area for the last 6 years. Also, as you read through this interview, it is probably a good idea to keep in mind that this team has been practicing the approach listed below for a number of years and have helped many clients with this approach.  Mark also has a blog on financial matters and is aptly named Financial Ambition whose aim is to bring you uncommon knowledge related to financial matters. The interview is being published in two parts. Today we are featuring part 1 of this interview. Part 2 will be published next week. So stay tuned.

Our readers would probably be interested in learning that Mark also participates on the Boomer411.com website as a Trustee, in this role he joins other trustees to help select quality content (articles) to be indexed on the Boomer411.com web site. Mark, on behalf of Boomer411 and our readers, Thank You.

Now let’s continue with the interview.

Boomer411: Mark, Please tell our readers about yourself and your professional practice (Where do you work?)
Mark: I am a Realtor and a real estate advisor located in Berkeley, California. I service the Bay Area and handle real estate transactions for buyers and sellers of residential and investment real estate. I work at the largest independent firm in the East Bay. I work as a team with my wife Katie. We have been top producing Bay Area agents for the last 6 years.

Boomer411:     What are some of the major concerns (explicit and/or implicit) facing Baby Boomers today and how do you deal with them?
Mark: When I meet with Baby Boomers I find, as with all of our clients, they need help assessing their current situation and their future real estate needs. Specifically for Boomers retirement and financial security are of most importance. Like with all of our clients this means that Baby Boomers face challenges in many different areas when deciding to purchase and sell property.

Boomer411:     Are Baby Boomers concerns different from other people that are aging and older than boomers? Please explain? What kind of help do Baby Boomers need when considering selling or buying real estate?
Mark: All of us are looking to conserve our time, energy and money when transacting in real estate. Yet, because the Baby Boomers are closer to retirement age they have heightened concerns for their well being. Thus, it is important to look at all angles of the transaction and get a clear picture of what needs to transpire in order to insure a smooth transition. For instance, Baby Boomers have financial constraints that may be more pronounced, because they are reaching retirement age and the mechanics of the time value of money has less time to work for them.
This means good financial advice is paramount to a successful transition from one home to another or in dealing with the liquidation of investment property. Since we are not financial advisors good real estate agents must keep a good financial advisor in the loop of the transaction. This means that both the financial advisor and the agent must work closely together to make sure the Baby Boomers financial interests are preserved. This often brings in tax, legal, and mortgage questions that must be addressed properly to satisfy the known and unknown concerns that the client may have.

Boomer411:    How do you approach the fact that a home is often your client’s largest asset?
Mark: I do not accept that our client’s personal residence is or should be their largest asset. For instance, a good ambitious marriage is a much larger asset than a home. A marriage provides much more than just finance. We also see that divorce is a leading destroyer of accumulated wealth. I have seen clients at retirement age, when their savings accounts are smaller than their personal residence.  This usually ends up in an unsatisfactory situation. A home should not be one’s largest asset, because if it is then they will be sure to make unwanted compromises when they retire.
Again, as stated in question 3, having a team of advisors that understand the concerns of the specific individual are vital. It is especially paramount when working with a client where their personal residence is their largest asset. It is always best to find a comprehensive approach to understanding and developing a strategy for retirement. It is a task that requires much cooperation and coordination between many different experts. This means in retirement your home must provide much more than just a roof over your head. Often we have seen how this change is a process of utilizing experts in many different fields to investigate alternatives and help our clients reflect on what is the best situation for them.  

Boomer411:    What should baby boomers (or any elder person) do first when considering selling or buying property?
Mark: The first step is to locate a real estate agent that understands the situations that Baby Boomers face. A good agent will have a team of experts to advise their clients through the process of buying or selling property. Expert advice is key to any successful transaction and it is a must for Baby Boomers that are setting the stage for retirement. Below are 8 steps that I guide my clients through when buying or selling residential or investment property.

1. You should start with your real estate advisor who should assess the current value of your home. These numbers will help all of your other advisors while they assist you in assessing your entire situation.
2. Your real estate advisor should assess the current real estate market conditions in your area. This will help you to gauge the risk and timing of your transaction.
3. Your real estate advisor should listen to your concerns for your family, work, career, socializing and retirement.
4. Your real estate advisor should provide you with other advisors that understand and can help you to assess all of the financial, insurance, tax, and legal concerns you may have. They should cooperate and coordinate with these ancillary services to get a clear picture of your total situation.
5. Your real estate advisor should provide a collaborative environment where you can reflect on your situation and consider all of the alternatives available to you.
6. Once you understand the situation you should work with your agent to explore the future situation you would like to create.  If you are deciding to move out of the area, this may mean utilizing another agent in a different market. Your primary agent should help you to find a good real estate advisor in an alternative location if needed and to cooperate and coordinate with this other agent to ensure continuity.
7. When you proceed with the sale or purchase you should have good communication with your agent. They are advising you throughout the entire process. Because the process of buying and selling requires that both a buyer’s and a seller’s expectations are reached, no real estate advisor can fully define your process with certainty. Your advisor should be constantly assessing your situation as it progresses and should be working with your other advisors as the process changes. It is a constant process of making assessments and then adjusting the process in a way that best meets your needs.
8. After the transaction is completed, your real estate advisor should provide you with any additional support (for example interior designers, architects and contractors) as needed. They should be willing to take a vested interest in you even after the transaction has been completed.

Boomer411:    What trends do you see in regards to retirement and real estate? Is “aging in place” or “retiring in place” a phenomenon in theory or happening more?
Mark: There are lots of new trends that are appearing in real estate in regards to meeting the needs of the many Baby Boomers that are beginning to think about retirement.  Some of them revolve around reverse mortgages, which allow people over the age of 62, who have equity in their homes, to stay in their homes while providing an income stream and/or reducing their payments. Many of my clients own large homes where they raised children who are now grown. These clients often are looking to downsize and we often deal with advising our clients on the transferring of their tax basis.  The Bay Area is a diverse group of individuals with many differing financial situations. Thus, it is imperative to look at each individual’s unique situation and help them to make the correct decision for them.
 In essence not every nail needs a hammer.  Thus, the trends are irrelevant to the individual’s concerns. In general, there are a lot of people in this country reaching retirement age. Many of them will be assessing their current living situations as they decide to retire. Many of them will need expert assistance to help make sound decisions regarding, housing, mortgage and finance. A good advisor will not apply common knowledge to these individuals, but instead use uncommon knowledge to assist each unique individual’s needs and concerns.

Boomer411:    If one lives in a high-tax or retiree unfriendly (or less friendly) state, what can one do to reduce or control retirement expenses? What factors should one consider if deciding to move to a retiree friendly-state?
Mark: Anyone who is considering moving out of state needs a team of advisors on both ends of the transaction. One set of advisors on the sales side of the transaction and another on the purchase side of the transaction to assure continuity. For example a real estate agent in California cannot adequately advise on real estate market conditions or strategy in Colorado. Each of these locations is unique and in need of a strategy that fits the uniqueness of each of the situations. You must make sure that both of the real estate agents work together with all of your other financial and legal advisors.
More often in California we see that people over the age of 55 years old, can transfer their tax basis from one home to another. The laws surrounding this exchange are complicated and require that the real estate agent take a look at the individual’s total financial and lifestyle perspective when considering the viability of this option.
This concludes part 1 of our interview with Mark Lederer. Stay tuned for part 2 of this interview to be published next week.