Baby Boomers and Their Parents: Avoid These Home Selling Pitfalls.

Your grandchildren are growing in numbers and size, but with your children out of the nest, perhaps the thought has crossed your mind that your own home is too big and downsizing is on the horizon. But many in the boomer generation (born between 1946 and 1964) face the double duty of having to make the tough decision about your own parents; how to care for them, and for many, how to sell their homes to ensure that appropriate care can be funded properly moving forward.

For many, the parents of the boomer generation have lived in their homes for 40, 50, sometimes 60 years, and it’s extremely difficult emotionally to let go of so many memories that become intertwined with these homes.  But we are living much longer, and with that age comes the risk of living alone, or in the wrong type of home suitable for the realities of living into our late 80’s or 90’s. Selling is becoming the best option for these late years. 
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If you are facing this life-planning decision for your parents, you must realize that there is a critical difference between downsizing from your own home and selling your parents’ home:  you have the benefit of knowing the history of what you have done to your property, how it is managed in your estate, and how you acquired it.

Selling Your Parents’ Home - Avoid These Pitfalls
For your parents who have lived in homes for decades, that history may hold some surprises as they may have made decisions when you were a child that you were completely unaware, and remain so to this day. Those decisions can now present great risk to selling that property when you least expect it and when you most need the funds.  Now is the time to do the research to avoid some of the real pitfalls I’ve encountered that have either completely blocked the sale of a home, or that nearly did without causing some high-anxiety, last minute scrambling.

1. Estate History - Confirm 100% Ownership.  Unbeknownst to one of my clients needing to sell their parents' home of 50 years, the parents, decades earlier, had added additional extended family members into the deed.  At some point a few of those relationships had soured. When it came time to sell the home, one of those estranged relations refused to release the sale, It delayed the deal for months. The lesson? Carefully reviewing the deed is extremely important.
2. Property Lines - They May Not Be What You Think.  Can you imagine going to sell your home and discovering that part of your yard isn’t entirely in your own town? I had another sale that reached the final stages until the client realized through the appraisal that a mere 12 square feet of the property actually existed in an abutting town. The lesson? While this is rare, it’s always a good idea to confirm that the old shed or garden in the back of your parents' home actually exists on their property.   
3. Home Improvements - Were They Permitted Properly?  A client of mine backed out of a deal after the inspector noted some minor work done long ago did not pull local permits for the work. This was common practice in the past. The lesson? Take an inventory of that finished basement, kitchen expansion, or converted garage in your parents home to confirm a surprise isn’t waiting if permits weren’t pulled during renovation.  
4. Valuation Step Ups for Capital Gains Tax.  Finally, there are ways to minimize or eliminate capital gains taxes on the sale of property (details for a future post), but you will need to confirm that basis step-ups were not previously elected if one of your parents has passed and a trust was set up between your parents.  A tax attorney will be needed to help calculate the basis of the home when you sell it. The lesson? Seek professional help to maximize financial returns, remember that there are tax laws designed to help you.

Many of us will face the transition point when we become the caregivers for our parents. All of the real-world examples above are good reminders that a little planning can go a long way to  manage the process and to provide the best care and enjoyment of life that your parents deserve.

About Kelly Crowley
Kelly Crowley is a Licensed Real Estate agent for Keller Williams Realty.
Kelly has lifelong ties to the area and a keen understanding of the marketplace through her personal history and extensive knowledge of the varied communities she serves. Kelly invests her passion for the area by serving her clients with the utmost integrity, honesty and expert guidance in their real estate endeavors. When you’re seeking an agent who will put your goals first, call on Kelly Crowley.     kellycrowley@kw.com    c. 734.274.0707

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