I am an SRES, Senior Real Estate Specialist, which means that selling homes for older generations is a specialty of mine. I am now at the age where talk of selling the family home for mom and/or dad is becoming a regular occurrence among my friends and my own family. This is a blog about selling the family home, where my client grew up.
For most of us, our parents’ home holds a lot of memories. If it’s the home you grew up in, you probably remember playing in the neighborhood and where all of your friends lived. If it’s not your childhood home, you probably have memories of celebrating holidays and other special occasions there. You may have struggled for a while to find the next place for mom or dad. You may have had to twist their arm a little to get them to make the change. It makes complete sense that selling the home where you grew up can be very emotional.
I was referred to the seller of 12304 Brookmeadow in the summer of 2021. Her mother had passed in late-2020 and dad had been moved into an assisted living facility in the spring of 2021. It was a lot of change in a short period of time.
What’s my property worth?
The first question any seller asks is, “What’s my property is worth?” Generally speaking, I almost never discuss value when I do the initial viewing of a home. I may have a broad price range in mind but I prefer to assess the floor plan and visual condition before we start talking real numbers. During our initial visit, I learned that her parents had lived there since 1973 along with some other specifics about the house.
It’s pretty normal for people to accumulate stuff when they live in their home for nearly 50 years. I also understand that older generations do not have the throwaway mentality that younger generations sometimes lean toward. It never surprises me to see a lot of personal items in the home of an older person. I can look past it to perform an assessment of market value.
The seller and I met again the following day and reviewed the most recent comparable sales, potential sale price, market conditions, who would likely buy the home, and preparing the home for the market. At this time, buyers were paying a premium for almost any property they could get their hands on. Appreciation was rising rapidly. I knew this home would sell to an investor who would flip it because it was mostly original condition meaning, it needed some updating. My recommendation was to move quickly and take advantage of the red hot seller’s market. I advised my client to take the items that she knew she and other family members wanted from the home, and then to have an estate sale for the remaining items.
A Note About Estate Sales
Estate sales seem to evoke a very strong response from some people. It seems as though people are either all for an estate sale, or totally against it. For the seller of this property, she didn’t like the idea of other people going through her parents’ belongings. I get it but, here are some of the advantages to doing an estate sale. First, it saves the seller time. The estate sale folks literally organize, price and get everything in the house ready for the sale. Second, once the sale is organized, the home owner can go through and make sure they’ve not left anything of value behind. Third, they run the sale. The home owner doesn’t even have to be there. Fourth, after the sale, they will arrange for items that did not sell to be donated to charity. They will even coordinate pick up. Lastly, the homeowner makes a little money and the home is cleared out. Easy peasy!
Since this seller did not want to hold an estate sale, she began the process of clearing out her parents’ belongings while also working full-time, and frequently going back and forth to Houston to help transition her husbands’ parents to assisted living. Did I mention that she had a lot going on?
Moving from Just Listed to Just Sold
I followed up with her every couple of months and kept an eye on market conditions. In the spring of 2022, interest rates started going up. I could literally see buyers exiting the market and prices starting to level off. I told her that we had to move very quickly to get the house on the market and maximize value.
The house was listed June 24. I did not include photos of the interior because the house was not cleared out yet. Showings were limited for the first three weeks while the seller worked to clear out remaining personal belongings. Once it was cleared, interior photos were added to the listing. Showings picked up. The house went under contract to an investor/ flipper on July 21 and closed on August 16 for about 90 percent of the original list price.
Why the difference in list to sale price you ask? Because the buyer’s inspection found some deficiencies that were unknown at the time that the property was listed. This can happen with any home, especially a home that has not been occupied for over a year, and one that’s being sold by a trustee who hasn’t lived in it for over 20 years. Let’s be honest, not that many people get into their crawl space on a regular basis to to check for plumbing leaks or water damage. And, as long as a roof is not leaking or we’ve not had a recent hail storm, most folks aren’t getting up on their roof either. The only things seller and I could have done differently was to have the house inspected prior to listing it, and providing that information to prospective buyers.
Changing market conditions also effected the sale of this property. Specifically, higher interest rates and slowing appreciation. It costs investors and flippers a lot more to borrow money than it does someone financing a home on a 30-year conventional mortgage. And when appreciation starts to slow down, investors get much more conservative about what they think they can sell the house for after it is remodeled. I mention this because I think it’s an important factor for anyone considering selling a home that needs updating.
At the end of the day, my client was pleased with the price that she got for the house and was happy to move on. I told her that we could go and take a look at the finished product when the remodel is completed. It made her feel good to know that a new family who would create their own memories would ultimately end up living there. As Sally Field said at the end of Steel Magnolias, “Life goes on!”
If your parents have been thinking about making a move, or if you’ve been putting off selling the family home, please contact me. I would love the opportunity to speak with you about how to best move forward.