How To Sell A Home On Behalf Of Your Aging Parent

How To Sell A Home On Behalf Of Your Aging Parent

Selling a home on behalf of an incapacitated or aging-parent requires more than your average home. There are more legal hurdles, and as a result, a higher potential for things to go wrong.

Perhaps you’re looking to sell an aging-parents home and transition them into assisted living. Maybe you need to move them in with you.

Either way, the burden and responsibility of selling an aging parent's home falls on you.

Make no mistake. Selling a home on behalf of a parent is a major undertaking, especially if you find yourself in this situation unexpectedly. As is the case for many.

Here are some tips on how to sell a home on behalf of your aging or incapacitated parent.

Note: We are not dispensing legal advice. We are not now, nor have we ever claimed to be, attorneys, and no one should act or decline to act based on the information contained in this post without first consulting with a qualified legal professional.

Establish Proper Authority

The first step to selling a home on behalf of your parent is to establish proper and legal authority.

It’s important to establish legal authority. Even if you're a family member or the caregiver, you don’t have a right to sell the home. Period.

Your authority needs to be established with legal documents, like a power of attorney (POA), or through a court order, like a conservatorship. I recommend seeking legal counsel to establish whether you have the authority to sell the home or if you need to take steps towards establishing authority.

For example, a common mistake is assuming that guardianships in Colorado give you authority to sell a property on behalf of the ward (your parent).

In some states, without a court order, a guardian or conservator has no authority to sell a property owned by a ward. Meaning, if you’re the guardian of your parents, you still need a court order to sell the home.

Under most cases, an adult-child will require permission from the court before being able to sell a parent’s home.

Even if you have proper authority, be prepared to establish authority over and over again. It’s likely lenders and title companies will require and request documentation to support your authority to handle the sale.

I once worked with a client who had POA over his father who was living in an assisted living community. Before he could sell the property, the title company requested to speak with the father to ensure proper authority.

Their goal is to prevent scams and mishandlings. So, be ready to support your authority.

Get The Home’s Value

Once authority is established, it’s time to get an accurate assessment of the home’s value in its current condition given the current real estate market.

As a fiduciary, it’s your responsibility to take great care and act in the best interest of the principal or ward. A specific way this is applied is requiring you to sell the home at a fair market value.

So, selling a home to a family member or friend at a price that is lower than fair market value will put you in a legal gray area and you may find yourself legally or financially liable. You could be held financially accountable, for example, between the fair market value and what you sold the property for.

Even if you plan to sell the home to a family member, make sure to have the home value assessed and work with a real estate agent. If you don’t need the home listed, you could always negotiate the commission rate with the agent.

With a buyer, many real estate agents are willing to handle the process for a 3% listing commission as opposed to a 6% commission.

To get the most accurate value from a real estate agent, we recommend getting in contact with a certified pricing strategy advisor real estate agent.

These real estate agents have additional training, knowledge, and experience in home valuations than the average agent. They are able to provide more accurate home valuations than non-certified real estate agents

You don’t want to find yourself in trouble because a real estate agent made a mistake and undervalued a home.

Gather The Necessary Information

It’s important to take stock and gather the necessary information and documents to sell the home. You may need to seek legal counsel to see if there are any specific legal documents you need in order to sell.

Some documents you will need include:

●       Record of the deed

●       Information from the lender or mortgage

●       Liens against the property

●       Home insurance

●       And more

The mortgage on your parent’s property is an important area to pay special attention to. It’s common for elderly parents to have non-traditional mortgages on their property.

For example, they may have a reverse mortgage on their property. It’s important to have those documents because selling a home with a reverse mortgage can create some additional barriers and requirements.

Hire the Right Real Estate Agent

Your needs are unique. So, it’s important to work with an agent that has real estate experience and experience in working with clients in your situations.

The right agent will result in a smoother and calmer process. Inexperienced agents will get tripped up by the potential barriers and that can open you up to liability or cause delays.

You want to find a real estate agent with experience in conservatorships, probate, guardianships, or power of attorneys.

Often your attorney is a great place to start for a recommendation. Alternatively, you can use Google or other listing directory websites, like HomeLight, to find real estate agents in your local area.

Even if you’re happy with an agent you used in the past to sell your home, I recommend seeking out an agent with experience. It’s really a different process to sell a home on behalf of a parent. It pays to work with an experienced realtor.

The selling process may still be complex, but having proper guidance from an experienced real estate agent will help avoid unnecessary headaches down the road.

Final Advice to Sell Parent’s Home

Our final advice to anyone considering selling a home on behalf of their parents is to seek legal counsel. You will likely face some tough legal issues so seek help. Don’t go at it alone.

Yes, it can be more expensive to seek legal counsel, but having the right legal advice from the start will save you trouble.

Are you looking for an assisted living arrangement for your parent? Check out our assisted living communities near Denver, Colorado.