Monday, January 5, 2009

Eyesore or Asset--Selling Your Parents' Home

Despite the popularity of “extreme makeover” shows, this term takes on a new meaning when baby-boomers are faced with selling their parents’ homes. It is a daunting task that most of us will inevitably face. I’ve not only been through it with my own family, but also with my husband, my friends, and several of my clients. What I’ve learned is that at a time when sons and daughters are grieving the death or debilitation of their parent, often completely overwhelmed and exhausted, they have to take on the responsibility of having to sell their parents’ homes. For most it means culling through thirty to forty years of emotionally-charged accumulation, where cherished family photos or important papers are found amidst dusty piles of magazines, and every object holds a memory. It also means coming to grips with the reality that their once competent parent has been slowly declining for years, lacking the energy, means, or mobility to care for their home, so the house is in need of a major overhaul before being put on the market.

The problems I see are fairly consistent from one house to the next, beginning with years of neglect of the basics such as cleaning and household repairs. Next, the once beautifully decorated homes have interiors that not only show years of wear, but are out-of-date, usually accompanied by furniture and accessories being arranged and displayed in an old-fashioned manner. This can send a subliminal message to a potential buyer that the home’s maintenance is also seriously out-of-date. Further complicating the situation is the over-accumulation of “stuff” that has not been sorted, organized, or discarded in years. Often, this is the family home where the adult child grew up, so their familiarity makes them unable to see the gradual deterioration of the home until they need to put it on the market. Unfortunately, heirs can first face these realities when grief and sentiment cloud their judgement, and pressure from finances or other considerations compel them to make decisions quickly.

In my experience, there are things that can be done in advance that would make this transition in life easier for everyone including the elderly parents. I would suggest stepping in earlier and helping your parents manage their home. Assess the condition of the home, now. Make sure the house is clean even if it means hiring a maid to come in. See that repairs are done. Take over the hiring of contractors and repairmen yourself. Often, seniors are too trusting and overpay for shoddy work. Accept that these are things your parents can no longer handle.

Start pre-organizing by locating important documents and files while eliminating junk. Removing excess furnishings and rearranging others can improve your parent’s mobility and prevent falls. These improvements will not only enhance the quality of life your parents, but when the time comes, the house will be closer to being ready to show. This is the time to decide the eventual disposition of the home.

Reverse mortgages have grown in popularity with seniors, but they can represent a problem for heirs if there is a substantial amount to be paid back on the house. Because interest continues to accrue, the time it takes to sell the house becomes a major factor. The longer it takes to get the house into marketable condition and sold, the more money is wasted in interest.

I highly recommend using the services of a good realtor, even consulting with them before the need arises, to have a plan successfully in place to keep the property in line with the market. They can tell you the value of the property based on the current market and the surrounding neighborhood conditions, and help you set a realistic sales price. Get a referral for someone who has been successful selling the properties in that neighborhood. Using all the good, professional resources that are available to you such as licensed contractors, packing and hauling services, and real estate stagers, etc. will minimize the burden on you, shorten the home’s time on the market, and maximize the financial success of your project.