Selling Your Parent's Home
In times of change and transition, we understand the emotional connection that often comes with selling a beloved family home filled with years of precious memories. Pair that with all the decisions that need to be made around clearing physical contents and what sorts of repairs or upgrades to make (or not), and the whole situation can feel downright daunting!
Increasingly, the populous boomer generation is exiting their established homes, where many have lived upwards of 25 or more years. The children of these aging adults often shoulder the responsibility of selling the home if the parent(s) can no longer live there independently or have passed away.
Having not been the primary occupant of the home, questions commonly arise that descendants simply don’t have the answers to. To limit the stress and complications surrounding unexpected obstacles, here are a few items I recommend preemptively researching to avoid being caught off guard midway during the sales process.
Verification of Ownership
Step one is always running a title history confirming the chain of ownership for the parcel number. We do this to ensure no unexpected persons or entities are listed as co-owners on the deed and to verify what liens, if any, are tied to the property. Let’s not have any estranged family members or outstanding debts surprise or delay you in closing escrow and receiving your settlement.
Easements & Property Lines
That title report we ran may also give us helpful information about what additional parties have a right to use, access or cross portions of the property. Before we sell, it is important to understand any rights or restrictions other neighbors or utilities may have tied to the property. Additionally, fence lines may or may not reflect the actual boundaries of a parcel. Clarifying perimeters up front can save time and complications down the road.
Permit History from Home Improvements
One of the top questions buyers seem to love asking is “Was this work permitted?” Let’s figure out how we are going to answer that question before it is even asked. Depending on local ordinances, home improvement projects may or may not have required a permit. And despite these requirements, an owner may or may not have elected to pull a permit, or forgot to close out a previously pulled permit. Regardless of permit status, knowing what renovations, additions or conversions an owner made to the property and identifying the details of that project and permit history in advance of sale is always a good idea.
Capital Gains and Tax Implications
In the case of multiple named owners where the home is in a trust, the time of passing of one party triggers a reassessment of the property value. Professionals can then be utilized to determine the new “stepped up cost basis” which factors into determining capital gains tax calculations. Consult with your tax attorney or other accounting professional for guidance in determining a strategy to maximize your financial return within the scope of current laws.
Every successful sale includes an intentionally designed plan and strategy that is exclusive to the property. Using a combination of local market data, insights from skilled vendor partners and previous client experiences, we’ll help distinguish the advantages and trade-offs involved with making or foregoing repairs or updates, selling on-or-off market, and when the best time may be to start the process. Connect with a trusted professional, like me, to discover all the options and resources available to you.
Bottom line, there is no one “right way” to sell a home. Your family's circumstances are unique, so it's important we start with a thorough conversation to better understand your specific needs, expectations and goals. You need both information and support, because selling a parent’s home is just as much about achieving a gainful financial transaction as it is respecting the memories and emotions intertwined with the home.
