Advice: How do I help sell my elderly parents’ home?

Belinda Moffat is the executive director of the Real Estate Authority. She answers home buying and selling questions from her.

Q: My elderly parents have decided to downsize and sell their large family home. While its size has become unmanageable for my parents, it is still very bittersweet for my family. Due to their age, they have asked me and my brothers to help them sell their house. We know they would benefit from our help, as we have bought and sold our own homes, but the logistics of this seem a bit more complicated. How can we best help our parents sell their home?

A: While this is a process many families go through, it can be challenging and stressful at times. Family homes hold many, many memories, and it can be painful to let them go, even when parents have decided the time is right.

If your parents feel like they need some support managing the sale, it’s great that they have you and your siblings available to help.

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One way to make things a little easier is to make sure everyone has the same expectations around the sale and the process. It is important to note that there are a few things to consider that may differ from the experience of selling your own home.

An important first step is to find out as much as you can about your parents’ home and their legal issues. Do you both own the home, or is only one of your parents named on the title deed? Is the house owned by a family trust?

It’s a good idea to hire an attorney early in the process, so you know how to manage legal rights and interests in the property. It is important that you are clear about who the legal owner is (a trust, both or one parent) and who is authorized to make decisions. It will be important to make sure your parents are involved and empowered throughout the process.

Belinda Moffat is the executive director of the Real Estate Authority.

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Belinda Moffat is the executive director of the Real Estate Authority.

While it is technically possible to help your parents sell their home privately, there are legal requirements and risks that you need to be aware of. The real estate transaction itself can also be complicated. Obtaining specific advice from an attorney can be helpful in preventing problems from arising in the future.

The alternative is to work with a real estate agency. When selecting an agent to work with, it may be a good idea to “shop around” to find the right person for you and your family. Be sure to look them up in the REA’s public registry to verify they are properly licensed and understand their disciplinary history, if any.

Agency agreement

Once you find an agent your parents feel comfortable working with, they should prepare an agency contract, detailing important information such as marketing costs, commission rates, and the agreed method of sale.

It is important to note that if your parents will be the signers (that is, if they own the home privately rather than through a trust), the agent will need to act in your best interest and follow your instructions. Even if you and your siblings are clearly helping out, ultimately when your parents are the providers in the agency agreement, the agent is acting on your behalf.

Remember that any document that your parents must sign, such as the agency agreement or the contract of sale, must first be reviewed by their lawyer. Once you officially start working with an agent, it’s important that you document all correspondence between you so everyone is on the same page. This will be particularly useful if you have information to pass on to other family members.

Divulgation

You will also need to find out if the property has any issues that need to be shared with buyers. Information about waterproofing, unauthorized alterations, or foundation problems should be disclosed. If the property contains defects and you don’t disclose them, you could face legal action later. Your real estate professional has an obligation to disclose defects in the sales process, so it will be important to discuss this as part of the process.

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Price

Deciding on the price your parents are willing to accept, including the lowest price, is another important step. This is particularly true given the changing market conditions we are currently experiencing.

Researching sales and listings for similar properties is a good start. If your parents use a real estate agent, the agent must provide them with a Current Market Assessment in writing, prior to signing any agency contract.

You may also consider paying for an appraisal by a registered property appraiser. This can be especially helpful if a family member is considering offering to buy the house for themselves.

Preparing for the sale

Finally, preparing a property for viewings and open houses, especially on behalf of someone else, can be quite a task. From minor jobs to major cleaning, try to come up with a plan with your siblings to make sure this gets done without causing your aging parents unnecessary stress.

Selling a single family home can have complex levels of financial and emotional risk for everyone involved. Family members will likely want to stay informed about plans, and more importantly, even if your parents have asked for your help and guidance, they should feel comfortable with their level of involvement, control, and decision-making.

As long as you have an agreed plan and keep the lines of communication open, it will get the job done.

To learn more about the property buying or selling process and what to expect when working with a real estate professional, visit settled.govt.nz. Have a question for Belinda? Please email [email protected]

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