Selling The Family Home In A Down Market
June 13, 2012 § Leave a comment
When living at home becomes a danger for your parent, deciding where your loved one should move is heart wrenching. Unfortunately, that is only half the battle because once the parent moves, then family is faced with another hefty decision of what to do with the vacated home. It can be tough because many times the home in question has been in the family for many years and there is likely sentimental attachments for the parent as well as the children. Now add on the extra burden of having to sell a home in a down market and the decision just gets more complicated.
For some families, renting the home may be a viable option. Renting may provide a steady source of income, which can help offset caregiving costs or the ever increasing price of assisted living. If the senior has family nearby that is willing to take on the responsibility of acting as landlord, this option can be beneficial.
However, for many Americans in this situation, the parents home is seen as “found money”. And it comes at a time when their expenses have dramatically increased because they have either had the elderly parent move in with them or they are faced with paying for assisted living. The downside of this attitude is that the family often takes a considerable loss on the home because they are trying access the cash.
Another option some families consider is a reverse mortgage, but this tactic isn’t all it’s cracked up to be. In a recent NPR article, Realtor John Mike, a Re/Max agent in West Palm Beach, Florida said, “people have regrets because the reverse mortgage just delays the inevitable. With home prices still falling and nursing aide costs rising, the cash from a reverse mortgage doesn’t go far, and before long, the owner needs to move.”
According to a recent survey by Genworth, a long-term care insurance provider, home prices have plunged by roughly a third over the past five years. During that same period, the annual fee of an assisted-living facility has increased 5.7 percent per year. It’s no wonder families feel the pressure to find money quickly.
It can be a tough pill to swallow when you realize what a house is worth in today’s market, especially when we consider that not even 10 years ago the real estate market was flush and as soon as you put a house on the market, you could expect a decent sale price. Even though your family’s home may not be worth what it was, taking some extra time to get a fair price for the home may be worth it in the long run.
If your family is trying to decide what to do with an elderly parent’s home, consulting with an attorney can be beneficial to help you weigh your options. Please don’t hesitate to call my office if you have questions or need guidance.
The Law Office of Dawn M. Weekly, PC. is located in Sandwich, Illinois and focuses on elder law and Life Care Planning for clients. Their office may be reached by calling 815-570-2334.
Every day of every week, Weekly Law is there for you.