The “Free but Not Free” Game in Senior Housing: Time for Change
Written by Michael Neville, President-Founder: R.E. Revenue Solutions Inc. & The Referral Resource
“I see,” said the blind man is a phrase we often use to describe that moment of clarity when we have an epiphany, a sudden vision, or when the truth becomes apparent. For a hustler, it’s seizing the opportunity when the iron is hot. Today, I want to draw your attention, with utmost sincerity and authenticity, to a very outdated model that is quietly crippling the healthcare and senior housing industry. You might know it as Assisted Living or Senior Living, but it’s more appropriately termed “senior housing,” and it’s one of the most overlooked real estate markets with a monumental shift on the horizon. The game is changing rapidly, and it’s time to take a closer look.
Do Not Hate the Player, Hate the Game
First, let’s address the elephant in the room: the massive lead generators receiving referral fees to place seniors in senior housing. Why does this happen? The reasons are diverse, from lifestyle changes to health issues, or evolving needs. Adult children often search on behalf of their parents for similar reasons. So how do they find their way into these communities? There are two primary funnels: local placement specialists or lead generators on the internet. Most people, until that day arrives, don’t know where to begin searching for Assisted Living. This is where the billion-dollar game is being played, right under our noses. It’s like “The Big Short,” and there’s an exponential number of lead generators pouring seniors into communities.
Here’s the kicker: these lead generators often advertise as “FREE placement agencies.” They claim it’s free for families, but it’s not free at all. The referral fees are passed through to the families, including those who didn’t come through the funnel.
The Issue with This Silly Game
From an economic standpoint, this practice threatens to suffocate and financially cripple many senior housing communities. The shortage of staff, nurses, and caregivers is reaching alarming levels. The Silver Tsunami, the aging U.S. population, is upon us. The number of people aged 65 and over grew by 38.6% in the last decade. These funnels prevent communities from generating organic leads, leading to increased care costs that could economically crumble the majority of the population and limit the transfer of generational wealth.
Different sizes of senior housing options exist, from residential care homes with up to six beds to large senior communities with 300+ rooms and luxurious amenities. But in the end, it’s all real estate. The inside and how it’s operated and who’s running it have many layers, but at its core, it’s real estate.
Licensing and Oversight: What’s Missing?
One might wonder about the licensing qualifications of these specialists. The truth is, they don’t need a license, perhaps just a business license. Clinical backgrounds aren’t necessary, although they can be helpful. There are no specific regulations governing this profession or process.
The issue at hand is alarming, mind-blowing, and outrageously serious. It doesn’t seem to have attracted the attention of our government, senior advocacy organizations, or local authorities. It may take some time for this issue to be addressed politically and reformed. Just like in 2006, when an LA Times article discussed the need for Conservator Reform, we are at a point where guidelines for Placement Agencies are desperately needed. In the field of senior lead generation, the critical component missing is disclosure.
The Missing Piece: Disclosure
As a licensed real estate professional, I hold my integrity in high regard, and I expect the same from my colleagues. Real estate agents undergo a lot of training, including courses that cover codes of ethics, terms on biases, steering, undue influence, and, notably, disclosure. The senior lead generation industry lacks disclosure, a crucial element that cannot be overlooked.
Realtors who wish to work with seniors and their adult children have an opportunity to provide genuinely free placement services and assist in selling the homes that will fund assisted living. The game is about to change, and there’s a growing market for realtors who genuinely care about seniors and their families. It’s time to bring transparency, integrity, and disclosure into the senior housing equation.
In the end, it’s time for change. Do not hate the player, but let’s change the game.”