In recent months, I have visited several clients who have expressed concerns about the challenges and decisions to be faced as their elderly parents find independent living increasingly difficult to cope with. The following insert from the last Generation newsletter by Robert Dolbear, Director at Bridgefast Property Services, provides some useful advice and guidance.
There comes a time in our lives when we have to start thinking seriously about whether our parents can cope independently in their home. This can be a stressful time and involve some difficult conversations to try to agree what is for the best.
This can be all the more challenging when living remotely from our parents, an ever more common occurrence, either within the UK or overseas.
The options available when independent living becomes too difficult are many, but once a decision has been made the challenges change. If it is a planned move while health is relatively good, it tends to be easier than if health is deteriorating making the move more urgent. The issue of dealing with a parent’s property sadly also arises on the death of a parent.
However the position arises, the options are simple: either sell the property or rent it. There are a number of aspects to think about under either option and this article highlights the considerations.
The initial marketing period is crucial; incorrect decisions at this stage are difficult to recover. Things to address and think about are as follows:
• You will need to obtain at least two appraisals from estate agents. If you don’t know the local market very well, selecting those agents can be difficult.
– Have a look at the types of property they are currently selling and obtain information on the size of their portfolio and the percentage they have under offer
– Check how properties are advertised; both the quality of presentation and where – which websites, papers etc
– Check that the agent’s branch is open 7 days a week
– Ensure the commission charge is reasonable
• Selection of the agent to market the property will depend on the factors above as well as:
– The quality of service
– The quality of information provided to substantiate their recommendations on asking price, achievable sale price and probable timescales
• Don’t be seduced by the highest valuation; you are looking for the optimum valuation, as a property that is overpriced for the initial marketing period can ultimately be difficult to sell for its fair value.
• An Energy Performance Certificate (EPC) will be required for the property.
• What arrangements will need to be made with respect to key access?
• Obtain an independent assessment of whether any remedial work is required to achieve a satisfactory sale. In general we would say this is not necessary as buyers like to make their own mark on a property; but if there are obvious issues which are affecting the initial appeal of a property then they should be considered.
• You will need to monitor the activity of the agent to ensure satisfactory progress. This can be time-consuming, but an agent should be accountable for activity on a weekly basis and be able to provide qualitative feedback. It is so important to build up momentum, starting from when a property is first marketed, through to a fair and satisfactory sale.
• Negotiating on offers is a skill in its own right.
– Are you comfortable doing this yourself or confident the agent can act in your best interests?
– Potential buyers may try to exploit circumstances if they know a move is urgent or if the property is already empty.
• Potential buyers need to be assessed to ensure their ability to complete on the purchase. A lower offer from a cash buyer may be better than a higher offer from a buyer in a chain.
• Appointing and dealing with solicitors who will do the conveyancing: they too will need to be monitored to ensure sale completion is achieved as quickly as possible.
• Remember: if a property is left vacant, most policies will lapse or reduce cover after, typically, 30 or 60 days; so separate vacant property insurance is required. Care needs to be taken with the selection of the policy because of these costs and minimum period conditions that may apply.
• An empty property will need care and maintenance, particularly over the winter when a ‘drain down’ is likely to be required. You may consider it appropriate to change the locks.
• Dealing with removals. This is often a combination of taking certain items to the new home, arranging for some items to go to family and friends, obtaining auction appraisals for more valuable items and arranging house clearance and collection by charities for what is left. Selecting the right service providers to help with this is important.
You will need to identify the utility suppliers and contact them to close accounts when the property is sold.
The option to rent out a property has the obvious attraction of generating some income (notwithstanding tax implications) but do your parents, or you on their behalf, want to become landlords?
Tenants can be demanding, requiring requests and repairs to be dealt with promptly. Do you let the property furnished or unfurnished? Furnishings need to meet a certain standard as well as the requirements of health and safety legislation. If you opt for unfurnished, who is going to deal with the sale/disposal/storage of belongings? If you budget for a certain amount of rent, what happens if there is a gap between tenants or market rents fall?
If the property is tenanted, the homeowner is effectively exposed to the vagaries of the property market with, as recent history shows, no guarantee of an upward trend.
So whilst renting can be appropriate for some, you need to be aware of the issues before embarking on this course of action.
If the sale of a property is associated with a move in to care, it is frequently the case that funding is required to pay for care, often in advance of the sale of the property. Professional, specialised, financial advice should be sought in these circumstances to ensure the right solution is put in place.
Dealing with property is invariably stressful, particularly so when this involves a parent’s property with additional concerns and emotions such as a move into care or, most difficult of all, the death of a parent. One’s own location, work and family situation can add to these stresses. It is important to go into it with your eyes open, which I hope this article has helped to address, and to know what you can achieve on your own and when professional support is required.
If you require any assistance or have any queries on this or any other issue, please do not hesitate to contact me.