No need to rush into quick property sale to pay for residential care, says expert 19 March 2015
Elderly homeowners who can no longer live independently have more options than they might think - according to Rob Dolbear, managing director of time4care.
The idea that most people don’t wish to sell their home when they move into care may not necessarily be the case - and there are many alternatives to rushing in and taking a cut price offer.
“The whole debate about people selling their homes to fund an enforced move is built on a false premise,”said Rob. “And I would argue there is a different angle than sellers practically giving away their properties in order to pay for care.
“Recent reports suggest homeowners could be losing as much as 25 percent of the value of their properties by selling up quickly. In my view they don’t need to slash prices and receive less equity if they need funds to make an emergency move into care.
“In a significant majority of cases, selling a home is the practical and sensible thing to do. But it should be done sensitively and for the full market value.”
There are opportunities - for those who have made the decision to sell up - to move into residential care before the sale of their home is complete. Short term funding is available, and can be accessed whilst sellers await a buyer.
“The financial benefits of achieving the right sale price for your home should significantly outweigh the cost of short term funding,”added Rob.
“At time4care, we offer a professional, fully managed, property sale service for retired homeowners. We are also able to provide funding, either on a monthly basis or as a lump sum, enabling us to focus on achieving a property sale at full market value.
“The client only draws down the funds that are required. Nothing extra. In the normal course of events, the loan is repaid when the property is sold - but can be repaid earlier without penalty.
“We also know, from experience, that the majority of single elderly people moving in to care are keen to sell their homes, even when they don’t need the proceeds for funding.
“Services like ours give them or their relatives peace of mind that estate agents and solicitors are being professionally appointed and managed - and purchase offers negotiated - with a view to achieving a full market value sale.
“There are times when some homeowners wish to hold onto their property - either leaving it empty or with a view to letting. This is a big decision that should not be taken lightly.”
Considerations for retaining a property following a move into care:
- If the property is to be left vacant there are a number of issues that are not to be underestimated and can be expensive:
- Most insurance policies reduce the level of cover or remove insurance for properties that are vacant after 30 or 60 days. Clearly an unacceptable risk and specialist vacant property insurance will be required but can be hard to obtain
- Properties left vacant over the winter will need to be drained down
- It may well be prudent to change the locks
- Who is going to conduct periodic inspections to make sure everything is in order?
- How will maintenance issues, such as the garden, be dealt with?
- If the property is to be rented this has the obvious attraction of generating some income (notwithstanding tax implications). But becoming a landlord has its challenges. Is remedial work required before the property can be let? Tenants can be demanding, which requires tenant 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 Health & Safety requirements. 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? Do you need financial advice?
- Whether the property is vacant or tenanted the homeowner is effectively exposed to the vagaries of the property market which, as recent history shows, is not guaranteed to only go up.
For more information about time4care, please call 01256 313888 or visit www.time4care.co.uk