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Hello to you good folks here. I'm asking this question for my friend.


My friend had to move her elderly, sick mom out of the Mom's house and into her home over a year ago. It is now clear the mother will never be well enough to live alone again. Sadly, my friend is a widow too, and is financially strapped and has debt. And, FYI, her debt is not because of her life choices; her financial problems began when her second husband died 8 years ago and he left her the house WITH a huge mortgage. He willed all his substantial savings and assets to his two adult sons.


My friend has a steady, full time job, thank goodness, but the salary is low. And although her mother's home and car are old and not worth a lot, they're worth something! The house may be worth about $90-$100k if sold soon in today's market.


I've reviewed dozens of discussions here and researched info online, but cannot find anything that directly addresses this question: The mom is ready and willing to sell her house. What are the best ways to sell the mother's house so that the proceeds could help my friend? Is it possible to roll-over the proceeds of the sale of mom's house into the daughter's home's mortgage? The daughter will be securing legal POA status this week.


The mom is only 82, can not longer drive or fix her own meals or manage her business dealings or health care. But it is likely the mom will live many more years with her daughter in the daughter's home. It would benefit them both if any funds could be used to help pay down the daughter's mortgage.


THANK YOU for any insights or advice or personal experiences you can share concerning this situation.

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Daughter still working, right? Full time? If so, I'd shy away from doing a caregivers agreement as the pay for part time may not be worth it. Caregiver agreements based on your community standards for pay, which maybe $ 18-20 hr full time unless you are in NYC or SF. Daughter better off continuing to work her existing job and get her full time job benefits and FICA build.

Instead I'd put the $ from the proceeds of house sale into a special needs trust and daughter is a trustee. There are kinda 2 types of SNT and one is going to be way way more flexible on how $ spent. Trusts are their own legal entity and can themselves pay for things. It's going to be a meet with NAELA elder law atty as to what options are better for your friends & her moms situation. If mom is pretty good on her AdLs perhaps with private pay caregivers from the trust and daughter paid for trust oversight, well it could be oodles better financially for daughter. Like trust pays 10k to be trustee & for oversight and she gets a 1099-C. A 100k trust could defund well before mom ever applies for Medicaid. The trust establishing atty would also shepherd moms Medicaid application later on should mom need to apply for Medicaid and trust existed within the 5 yr lookback.

But before even thinking about a trust, daughter needs to have a DPOA that allows for her to act to sell moms house. The Realtor if with a large group will require the DPOA to be attached to the listing agreement & will review of all in order. Believe me, Realtor does not want a glitch at closing. And daughter does not want her mom having to do a closing say 5 mos from now & mom gets all "I don't want to sell, your forcing me" at the title co office as it will kill the sale. Major unhappiness all around. Worst case is that buyer sues seller for "opportunity lost" and does by placing a lien on the property.

Daughter needs that her DPOA allows for any & all financials, so she can do whatever on her own without having to trot mom in for signature. The atty who does this should also do the trust. Atty fees can come from property sale. But mom has an income - like her SS - & should pay ideally from it and her savings for atty and every penny of the costs of her old house.

I'd suggest that you look at the current tax assessor value on property. If Realtor feels and can show comps that it likely will sell within 10% of assessors value within a 30/60 DOM (days on market) that's terrific. Comps are important & you can look at the MLS on the comps to see if they realistically are like the moms house. If the comps were all renovated and moms house has zero updates and no renovation with permits on file, those comps are totally unrealistic to base the selling price on. Solid veteran Realtors will be brutally honest on this but more newby Realtors not so IMO. If it's looking like it will sell for way, way under assessor value, I'd suggest you get it appraised. Appraisal needs to be done by licensed & registered appraiser. It's a legal document. So IF Medicaid should be needed within 5 years and raises concerns that house not sold at FMV, daughter has appraisal to show that it had a legal verifiable lower value.

If its looking like that house needs huge amount of work; that it will not show well; that the neighborhood it's in is very downmarket; that it cannot qualify for VA or FHA as there are structural problems with house...... I'd suggest that she try to find a Realtor who primarily deals with investors / flippers. So it never goes onto open market and listed for months incurring costs (utilities, insurance, maintenance, etc) which slowly eats up profit & interest by Realtors to even show it. It instead is sold almost immediately to investor by the realtor who still makes their 6%.

Good luck in all this, it's a lot of decision making in short order.
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Find an attorney. It's very difficult to sell Mom's house while she is alive - something to do with "always a chance she'll get better and need the house to live in" is what we dealt with years and years ago with an aunt. And hers was only a rented apartment.

Find an attorney to see what rights you have legally.
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Caretaker13, tell your friend do NOT roll the equity money into the mortgage. That could come back to bite her if her Mom needs to apply for Medicaid within the next 5 years. Medicaid would look at that as a "gift".

Now Mom could do is pay her daughter a salary for the caregiving. This would need to be in writing so that Medicaid will accept it.  I wonder what your friend would do if Mom needs more help.  Would she quit her job? 

If Mom's house needs some maintenance or remodeling, don't do any remodeling. There are a lot of Buyers out there looking for houses to fix up and flip. Get the house appraised by a licensed Appraiser so that you will have an idea what it is worth not fixed up. Just make sure the house is very clean and the yard is tidy. Then look for a Realtor who is familiar with selling "as is" properties.

I sold my Dad's house "as is" via a Realtor and it worked out quite well. Dad was happy with the price and so was the Buyer. It was a win-win. The Buyer has been busy doing remodeling :) Dad put the money into the bank to save for many "rainy days" that elders tend to attract.
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She needs to sell the house. My Moms has been a white elephant to me. More trouble than it is worth. I would have been able to keep my Mom in an AL much longer if I had had her monthly income instead of it going to upkeep and taxes. And sell the car. But to do this she needs a POA and Mom has to be competent to sign it. Otherwise, she needs a guardianship which she can deduct the cost from Moms money. She has to get a fair market value of the house if she feels Mom will need medicaid within five years.
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