Should You Sell The Family Home To Pay For Senior Care Expenses?
Paying for a long term senior care facility can be extremely expensive. The cost of expenses for assisted living varies greatly, ranging anywhere between $1,500 to $10,000 a month. Luckily there are a few different options to choose from, one being selling the home to cover the costs.
How to Transition From Living at Home to a Long Term Care Facility
Making any kind of change can be scary at first, but there are ways to make the process easier. There are a few ways to make the transition process, whether you yourself are going to a an assisted living home, or are moving a family member to one.
Do Your Research
Before you make any decisions, it is important to do some extensive research. Look at various senior living communities and explore the options and amenities they have available. Make sure to know the differences between independent living, long-term nursing homes, and assisted living. Check to see if they provide any on-site services such as physical therapy, diagnostic testing, etc. and ask about diet options, especially if you or a loved one are diabetic.
Be Sensitive to Feelings
If you are transitioning a family member to a senior living facility, it is important to be empathetic with their feelings. Reinsure them that there will be frequent visits and make sure to keep your word, supplementing with phone calls, video chats, and texts. Involve the family member in the decision process, and take into consideration their likes and dislikes.
Have an Estate Plan in Place
Before you or a relative move into a long-term care facility, it is imperative that you make sure all legalities and financial affairs are in place first. Meeting with a professional estate planning attorney in St. Petersburg Florida can provide valuable advice and help you come up with a plan to protect any assets. Having a plan in place to cover the cost of living is essential to reduce stress and avoid any long-term issues down the road.
What Do Senior Care Expenses Include?
There is a large price range when it comes to senior care expenses, and a lot of it depends on what you or a loved one need. Other long-term senior living expenses can include: 24 hour home health aide, nursing home, assisted living, memory care facilities, continuing care retirement communities, and more.
Live-In Home Aide
In-home care provides assistance for activities of daily living while also taking care of any specific medical needs and may provide certain services such as memory care. This type of 24-hour service has an average national cost of $17,742 in the US, but costs vary depending on your location.
Nursing Home
A nursing home, also known as skilled-nursing care, provides 24-hour nursing and medical care for seniors. Most seniors will move permanently into a nursing home, but some people may be in a nursing home temporarily if they have an illness, injury, or surgery that may require special care. The national median for a semi-private room per month is $7,908 while a private room is $9,034 per month.
Memory Care
Those dealing with forms of progressive-degenerative dementia such as Alzheimer’s disease may require memory care. Memory care facilities are designed to provide a safe environment to protect those from leaving the facility and putting themselves in danger. The national median costs for memory care facilities in the US is $5,430 a month.
Continuing Care Retirement Communities
Continuing care retirement communities, or CCRCS are a popular alternative to senior living. Residents can live independently while also having access to advanced care services such as memory care, assisted living, and skilled nursing. Those in a CCR will have access to a variety of amenities including health and wellness services, home maintenance, fine dining, and more.
CCRCs usually ask for an entrance fee ranging anywhere between $100,000 to $1 million, with average fee costing $300,000. The entrance fee acts as a prepayment for your care and living fees as well as to cover operating costs. Besides paying for the entrance fee, you will also need to make monthly payments, usually starting at about $2,100.
When Should You Think About Selling the Family Home to Cover Senior Living Expenses?
Selling a house can be an involved process, especially if you or a loved one plan to sell in order to cover senior living costs. A common question is should you sell before or after a move to senior living? The answer varies, depending on your personal situation and factors such as stress, urgency, timing, and healthcare needs.
Selling Before Moving to Senior Living
If you plan to cover the costs of senior living with the earnings you receive from selling your home, then you will want to sell before moving. You will reduce stress by already having the money to help cover living expenses and any upfront fees.
It is important to note that a home without occupants for 60 days is considered vacant by most insurance companies. The average time it takes for a house to sell in the US ranges between 55 to 70 days. Regardless if you sell the house before or after senior living, just make sure to plan carefully and leave enough (but not too much) time in between transitioning.
Selling After Moving
Selling a home after moving into a senior living facility can be beneficial if you have the money to cover costs in the meantime. One reason for selling a home after moving is to help reduce stress. The cleaning will need to be kept up with and there will be showings to schedule around when having occupants in the home.
It may be easier to sell your home if you can stage it beforehand. Having an empty house allows a real estate agent to prepare it in an attractive way for selling,
If the situation is urgent, such as you or a relative cannot live alone or have sustained an injury, then selling after moving may be the only option.
What are Other Ways to Cover Senior Care Expenses?
If selling a home is not an option, there are a few other ways for you to cover senior case expenses.
For example, if your or a loved one worked for the government, railroad, or military, you may be eligible for a stipend to help pay off the costs. Veterans and their spouses can qualify for a pension program to help counter the costs of senior care. Those who are federal and postal workers and their relatives.
Get a Home Equity Loan Or Home Loan Refinance
A home equity loan, otherwise known as a home equality line of credit (HELOC), is a bank-made loan where they use the borrowers home as collateral. The homeowner can take out money as they please, but monthly payments need to be made to avoid your home going into foreclosure.
The fees for home equity loans are usually low and you can borrow regardless if there are occupants in the home or not.
If a HELOC is not an option. You can also do a Florida home loan refinance if you have equity in your home and have the payments made through your mortgage. Your monthly payment maybe higher however you can probably find rates that will be less than if you were to take out a HELOC loan.
Reverse Mortgage
If you plan on having yourself or a spouse reside in the home and you are 62 years old or more, you may want to check out a reverse mortgage. With a reverse mortgage you will receive a monthly sum with the full amount being paid back at some point (when you sell your home, pass away, or move to a different place).
Something worth noting is that you can’t have a reverse mortgage if you plan on moving into assisted living or a nursing home. Reverse mortgages only apply to those living at home.
Renting
Renting the home while you or a loved one are in senior care can be a consistent source of income. This additional income can be used to help pay for the costs of residential care. However, this option only works for those living in an outside facility, and if the mortgage is paid off or payments are very low.
Checklist for Selling the House
Selling a home is easier if you have an understanding of what needs to be done. Having a checklist for selling a home keeps you organized, on schedule, and helps reduces stress. Throwing away excess belongings, removing any distractive items, and making small repairs can make a big difference when it comes time to sell.
Declutter the Home
The less items in a house, the easier it will be to get it ready for showings. Start by cleaning all of the visible areas in the house including windowsills, tables, counters, shelves, etc. Once you have a handle on all visible spaces, work your way to cabinets, closets, drawers, kitchen cupboards, etc.
If you have an excess of items, you may scare off potential buyers by giving them the illusion that there is not enough space in the house for their belongings. Instead, donate or toss any items you don’t need and pack up the rest. This will give your buyers a clean slate to work with and can help them envision living in the house.
Remove Distractions and Personal Items
You want a potential buyer to envision themselves in the home you are selling, and it will be hard for them to do that if they are distracted by personal items. Go through the home and remove any personal photos, bold artwork, and colorful furniture. Removing any loud or personal items helps create a blank canvas for a prospective buyer.
Make Minor Touchups and Replacements
Similar to removing distracting items, you will also want to paint any colorful walls with a neutral color. A neutral color lets the buyer imagine which color they would want and allows them to picture themselves in the home. If you have a colorful wall, you are taking a chance that the color may be off-putting to the buyer.
Wipe down baseboards, doors, and walls before you put the home on the market. If you notice anything broken or loose, make sure to repair it right away. You want to make the future buyer feel as if they are getting a brand new house, not a broken fixer-upper.
Staging the Home
If you are living in an outdated home, having it staged by a professional could help increase interest and bring in a sale. A professional will take a look at your belongings to see which items will appeal to potential buyers based on the real estate market. They may work with what you already have and just re-arrange the items, or they may suggest that you rent or purchase a certain item.
Final Say
Selling a home to pay for senior living is a great option as it provides you with a lump sum to help pay off any current medical bills, upfront costs of moving to assisted living, and lessens the stress of owning and maintaining a home.
However, if selling a property is not an ideal option for you, it is possible to keep a home and still pay for senior living. You can even generate income by renting the house out to help offset the costs of senior living. Whichever you decide, make sure to research thoroughly and communicate with all parties involved before choosing.