Selling a Parent’s Home to Pay for Their Long-Term Care



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Checking a parent into a nursing home is an emotional experience. Making plans to sell their newly unoccupied home can make an already overwhelming time even more stressful. You and your family likely have many fond memories in that house, and it's only natural to feel sentimental about giving it up. Then there's the necessary cleaning, dealing with paperwork, and finding a homebuyer, which makes this process difficult to navigate.

Here are some tips on how to make a selling a home in this scenario go more smoothly.

Key points from this article:

  • Handling the Sale – If a parent is unable to manage the sale of their home due to health reasons, a Power of Attorney (POA) can be assigned to handle the sale. This requires specific legal documentation, especially if the parent is not in good mental health.
  • Mortgage Considerations – The process of selling the home differs based on whether it has a standard mortgage or a reverse mortgage. For reverse mortgages, prompt action is needed due to the lender's demand for payment once the house is no longer occupied.
  • Liquidating Home Contents – Before selling the home, it's often beneficial to clear out its contents. This can be done through personal sales or by hiring an estate sale company. The decision to sell with or without furniture should be made in consultation with a real estate agent.
  • Sales Options – Homeowners have the choice between an on-market sale, potentially requiring renovations and professional cleaning for a higher sale price, and an off-market sale to a cash buyer like AMI House Buyers for a quicker, hassle-free process, albeit at a potentially lower price.

Disclaimer – The information on this page is intended for general informational purposes only and not to provide legal advice.

Who can handle the sale?

If your parent is capable, it is easiest to have them sell the house, as it requires no additional paperwork for one to sell their property. If they no longer reside in their home, a mobile notary can meet with them at their care facility to process the sale documents required by the title company.

However, senior citizens who are capable of selling their former home often don't want to deal with the burden. Whether your parent is not well enough to manage the paperwork or not able to handle it for other reasons, you or another trusted individual can take care of the sale for them as a power of attorney (POA).

There is a brief process involved with assigning a POA to sell a parent's house. If your mother or father is in good mental health, they can give the POA permission to sell it for them (sample form for illustration purposes only). However, if your parent is in poor mental health, then you will need to work with a medical professional and an attorney to be granted POA. The medical professional is responsible for declaring the ‘principal' (homeowner) as incompetent, and the attorney would draft the POA documents.

It is crucial that when filling out the Real Estate POA form in Texas that the principal checks the box labeled ‘Sale of Real Estate.' This designation ensures that the ‘agent' (who the homeowner is assigning as POA) has the authority to sell the house.

Additionally, some mortgage lenders may require the documentation to list a minimum price for which the house can be sold. In Texas, the POA form must be signed by all parties before a notary public. It also must be recorded in the Real Property Records of the county where the property is located.

Reverse mortgages vs. standard mortgages

If you are selling a house with a standard mortgage, you will sell the home just like you would in any standard sale and use the proceeds to pay off the mortgage and any past due bills such as taxes or liens on the property. Whatever is left goes to your parents and can be used to pay for their care. Note that until the house sells, you'll need to continue making mortgage payments and pay any applicable homeowners association (HOA) dues, as well as keep essential utilities on.

If your parent took out a reverse mortgage, the lender would send a demand for payment letter upon discovering that the house is no longer occupied. The notice typically states that payment is due in full within the next 30 days. But, if you respond that you intend to sell the house, most lenders will give you six months to pay, with the option to request two 90-day extensions if necessary.

The goal is to sell the home as quickly as possible because reverse mortgage interest and fees will increase the balance owed until the house is sold. Also, property taxes, insurance, HOA dues, and essential utilities must continue being paid. Those expenses can add up very fast for a vacant home.

Liquidating the contents of the home

If you plan to sell the home on the market, you should speak with a real estate agent for guidance on whether you'll be able to turn a better profit with or without its existing furniture and décor. For homes in the Houston area, we recommend consulting with Roots and Wings Realty Group. If you decide to sell to a cash buyer like AMI House Buyers, you may want to liquidate the home's furnishings before the sale.

In most cases, a house will sell for a higher price if its contents are cleared out. Once you and other family members have claimed any items that you wish to keep, you can either sell the remaining belongings yourself or hire an estate sale company to do it for you. Be aware that this can be a long process, potentially taking several weeks. Be sure to check out our article here for tips on how to liquidate a home's belongings quickly.

Off-market sales

Selling your parent's home off-market to a cash buyer, like AMI, allows more freedom than selling it on-market. You can keep or sell what items you want and leave what you don't want. You won't have to clean or prep the house for sale, as we buy it in “as is” condition, and will take care of any items that are left behind. We'll also cover all closing costs, and you can pick the closing date that works best for you. Once the house is under contract, you can cancel any utilities that aren't needed.

The one disadvantage of selling off-market to a cash buyer is that you usually won't receive the home's full market value as the sales price. But this loss in profit may be worth it, considering all the money you'll save in expenses for the upkeep of the house while it's waiting to be sold.

If you are interested in selling the home quickly in its current condition, you can contact us here to receive a no-obligation cash offer.

On-market sales

With an on-market sale, the first thing to consider is whether or not to renovate. A real estate agent can advise you based on whether the home improvements would increase its value, or just cost you money that you won't get back through the sale.

You might discover that it makes the most sense to sell the home as-is without doing any repairs. Generally speaking, it's best to think about the home as a whole – partial renovations aren't worth it. For instance, a new carpet won't give you a good return on investment if the house is covered in old floral wallpaper, has outdated appliances, and inadequate plumbing. If you can afford it, you'll want to consider updating every room in the house to help it sell at its highest value.

Before you list the house, it will need to be deep-cleaned. While it is possible to handle this on your own, we recommend hiring professional cleaners. Not only does this save you days of work, but professionals have a keen sense of which parts of the house need special attention. They will tackle those nooks and crannies that you wouldn't have given a second thought.

When the house is ready to be sold, find an experienced agent with a track record of selling homes fast, as is, for top market value. Not all agents are created equal, and choosing the right one is essential. Keep in mind that realtor fees are almost always less than the discount in profit when selling to a cash buyer.

Sale proceeds

When the house is sold, the proceeds will go directly to an account with your parent's name on it, unless they specify in the necessary documentation that they want their POA to receive the funds. If your parent wants the proceeds to go to you, they can set up a trust giving the house to you before you sell it.

The best way to ensure that all the money left over from the sale goes to the right place, with no hassle, is for your mother or father to provide specific written instructions to all professionals involved in the transaction.

As the POA, you have different options on how you choose to sell your parent's home. It all comes down to how much time and money you can put into selling it at a higher price or selling it quickly and hassle-free to a cash buyer for a lower price. You can get a no-obligation cash offer from AMI here.

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Rae Hoffman

Rae Hoffman is the owner of AMI House Buyers and a seasoned real estate investor with a heavy focus on the Houston & Katy, Texas areas. She has done numerous flips, has owned multiple rental properties, and is also a licensed real estate agent in the state of Texas. She is heavily experienced in the areas of foreclosures, water damaged properties, burnouts, and inherited properties, and works with distressed homeowners in all types of situations to help them understand their options and find potential solutions.


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