Here’s a topic that I don’t think we’ve ever explored before!
Then again, perhaps the reason why we’ve never explored it is because we’ve never needed to?
Sure, people sell their parents’ houses all the time! But to the extent that we’re experiencing today compared to, say, when I started this blog in 2007?
No way. It’s not even close.
It’s no secret that Canada’s population is aging, and as a result, there are likely to be more Canadian seniors selling their homes today than in years’ past.
Just look at the Baby Boomers, for example.
It’s generally accepted that “Boomers” were born between 1946 and 1964.
When I started in real estate in 2004, the youngest Boomers were merely 58-years-old!
Today, those same folks are 78-years-old.
“Yes, that’s how time works. Thanks David for this excellent look at math.”
But you get where I’m coming from. There’s a reason why the word “boom” is in Baby-Boomers, as in there was a massive spike in births and thus the overall population.
Would you believe that from 2019 through 2023, the net number of Canadians age 65+ increased by 15%?
That’s almost one-million more seniors in a period of four years.
And we don’t have the 2024 data yet, otherwise that would be higher.
Now, I realize that not everybody aged sixty-five or higher is going to be selling his or her home, whether that’s today or ever.
But I am trying to show that, as we’ve all been told, Canada does have an aging population, and while many of these folks are deciding to stay put, many are also choosing to move.
Over the last three years, I have assisted more elderly sellers with the sale of their home (and/or with the help of their children) then in the previous seventeen years of my career combined. Perhaps that’s a coincidence, or maybe that’s just a function of my clientele getting older and thus their parents are getting older as well, but either way, I have to think that this is merely a sign of things to come.
Much has been made of the notion of people being “over-housed.” The term, which I hate, comes from the idea that a person who lives alone in a four-bedroom house is “over-housed.” I could write an entire blog on this, and I’m sure I will, but I maintain that it is nobody’s business telling a private citizen that he or she could, should, or must downsize because there are other people who could make use of the home in a more efficient or “better” way.
In any event, the experiences that I’ve had over the past three years have shown me that while no two situations are the same, there are a lot of similarities in terms of the process of a person selling their parents’ home, or the familial situation, or the reasons why the sale is happening in the first place.
Here are the three most common situations:
1) The parent(s) have passed away and the children are selling the home as part of the estate.
2) The parent(s) have moved into some sort of assisted living and the children are selling the home.
3) The parent(s) have downsized into a condominium and the children are selling the home.
Keep in mind, when I say “children,” I’m really saying “offspring.”
These aren’t children with respect to age.
In fact, I recently represented an estate sale where the “children” were aged 81-years-old, 76-years-old, and 71-years-old respectively.
But that was for an estate where the father lived to be 103-years-old. If only we could be so lucky, or our parents!
What I’m primarily dealing with these days is “children” in their 40’s or 50’s who are assisting their parents, who are in their 70’s, 80’s, or even 90’s, sell the family home and move into a condominium or assisted living.
Let me provide you with a brief overview of a few select cases, just to set the scene:
Case #1
As noted above, a gentleman lived to be 103-years-old and passed away.
He left behind the “family home” which had been in that family since the 1950’s.
There were three heirs, aged 81, 76, and 71. The sale proceeds of the home would be split evenly among them.
The house was absolutely full of stuff; some merely weeks or months old, but other items looking like they hadn’t been touched in forty years.
While the home was situated in a fantastic area, the house needed a complete renovation, or could have been torn down entirely to build a new home.
Case #2:
Clients of mine came to and said, “We need your help finding our parents a new place to live.”
They were in their late-80’s, and as is often the case, the family had been talking about making a move, but it wasn’t until a bad accident that they realized, “We need to do this now.”
I found the parents a condominium that was near their children – both my clients, and which was situated on a thriving retail strip where they could walk mere steps to groceries, coffee, and a pharmacy.
We then turned our attention to selling the family home which also was “full” of stuff! Emptying that house was a process, as I’ll explain in a later section.
We sold the house, the transaction closed, and the both the “parents” and “children” are happy to be on to the next stage in their respective lives.
Case #3:
We received a referral to help sell a condominium on behalf of an elderly woman who had moved into assisted living.
She previously downsized from a 5,000 square foot home to a 2,000 square foot condo; about ten years ago.
But now we were asked to help her further downsize by selling the condo, which was a space she didn’t need, couldn’t look after, and didn’t have the conveniences of an assisted living residence that she required.
The condominium itself was turnkey, but the items within the condo became our task. We donated some, auctioned others, and junked a whole lot, as I’ll explain in a further section below.
Case #4:
A long-time client of mine asked me to help his parents downsize from a house they’ve been living in since the early-1980’s into a condo within their community.
His parents were very capable seniors; in their mid-70’s, but they could pack and move boxes like a couple of teenagers!
We found the condo first, removing the risk of becoming homeless, and then prepared the home for sale.
There was a lot of work to be done, and as is often the case, much of it had to do with packing and moving. We upgraded the partially-finished basement to increase the marketability and value of the home, we painted almost the entire house, and eventually, filled a storage locker with boxes.
While the “children” were instrumental in the process, “mom and dad” did most of the heavy lifting; metaphorically and literally.
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I have a lot of other cases that I could share, but these are merely meant to serve as a synopsis and introduce a few examples.
To further help describe the “how to help your parents” part of this blog, I think I could provide advice based on the collective experiences that my clients, their parents, and my team had throughout all of these sales.
So first, let me give you some advice on what you’ll undoubtedly need to do…
You need to decide if your parents are signing legal documents or if you’re going to be a Power of Attorney.
Sometimes, this is based on necessity, but other times, it’s based on simplicity!
If your parents are incapacitated, or if you’re already acting as a POA, then you’ll need to make it known that you have the ability to sign on their behalf. For my purposes as a real estate broker, I would need to see a signed POA and keep it on file in order to work with a non-owner (ie. the children) during the sale.
There are other times when it’s simply easier to act as a POA.
Case in point: technology.
In one of the cases described above, Matthew and I went to a retirement residence in person to have our client sign the papers – with a pen. We haven’t done that in a while! But the seller didn’t provide her children with a POA and she didn’t want to use DocuSign. Or she didn’t know how.
In another case, my clients (aka the “children”) were the ones effectively selling the home. Yes, their parents were the legal owners, but the parents wanted nothing to do with the sale process. They simply instructed their children to handle the sale and oversee everything, and thus they signed a POA allowing their children to sign legal documents on their behalf. The parents didn’t want to sign documents, meet with a lawyer, real estate agent, junk removal company, et al. They just wanted the sale done.
In a case where there are two, three, or four “children,” you’ll also want to decide who is acting as the POA. If all four children have a POA, it can get messy and confusing. And in some cases, as I’ll explain later, it can get confrontationial.
You need to decide what to do with all the “stuff.”
Family, donation, auction, and junk. Those are what I call “the big four.”
But first, I should offer a disclaimer: while not EVERYBODY has a house full of crap, most people do.
In my experience, they all do, but maybe your parents live in a pristine environment without a single possession that they won’t bring with them to their new home.
Obviously in the case of an estate, there is no ‘next home,’ so it’s going to mean you have to empty an entire house full of stuff.
But when you have parents moving to assisted living or a condominium, there’s a zero percent chance that their new home will be as large as their old one, and/or that they need everything from the old house in the new one.
But starting from the beginning, why must you empty the home? Two reasons:
1) The buyer is going to want the house empty upon closing.
2) The house looks bigger and better without all the “stuff.”
Again, I’m not going to assume that all the “stuff” is over-sized items from yesteryear, but in my experience, most is.
Picture a dining room, for example.
The “china cabinet” is massive. It takes up the entire wall. And it’s from 1955. Beautiful piece, no doubt, but it doesn’t help the aesthetic of the home.
The dining room table is also a relic, as is all the tarnished silverware that’s stacked four feet high. The stack of newspapers and old letters don’t help either.
Two of the dining chairs are broken. There are two folded lawn chairs leaning against the table, and there’s a child’s high-chair that looks like your Dad used it once upon a time.
There’s a broken wheelchair and a walker leaning against the wall. These don’t make the buyers in their early-30’s feel warm and fuzzy about buying and fixing up this home.
That’s just one room in the house. Now think about the entire house.
What do you do with all this stuff?
We have cleaned out six houses like this in 2024 alone, and we always start the same way: ask the family what, if anything, they want to keep.
I will admit that one of our sellers said, “Junk the entire house,” and hired a company to put everything in a dumpster. EVERYTHING. To each, their own. No judgement there whatsoever, and that’s the easiest path.
Other sellers want to sort through things. Some want to invite their family (cousins, aunts/uncles) and friends to come see if there’s anything they need. Maybe there’s a couch that’s in fair shape. Perhaps there are books that somebody wants. Maybe there are family heirlooms or items that extended family remember from years past, and might want to have in their homes.
We had one listing where we got different colour stickers printed with family members’ names on them. Various family members came through the house and put their sticker on anything they wanted to take. Then we set one day, and one day only, for the family members to come buy and pick everything up. Everybody came – except for one causing, who we knew wouldn’t come. And I guess he called our bluff, because we kept everything for him to come pick up the following weekend.
After family and friends have taken what they want, there are three other resources:
- Donation
- Auction
- Junk removal
There are all kinds of companies you can donate to, such as Furniture Bank, Salvation Army, Red Door Family Shelter, Habitat for Humanity, Diabetes Association, etc.
But every company is different. Some want you to send them an itemized list with measurements and photos, and some will only take specific items and not others.
Unfortunately, more of our clients have been disappointed than enthused with these experiences, but that’s because our clients assume that these companies will take anything. But some companies will even show up on site to pick up a dozen items they agreed to take, then decide on the spot that they’re only taking half of them.
So if you’re donating, you need a backup plan. You need to assume that some of these items won’t be removed.
The next option is to auction off items in the home, and obviously these items need to have value.
I’ve alluded to some houses we cleaned out that had relatively nothing of value, but another house we sold had a lot of antiques!
Not to plug any one company here, but we used Max Sold for two auctions this year and they were great.
Again, consider that you’re not necessarily doing this to make money, but rather you do this because you want somebody to take these items without you having to pay for junk removal, but also because you don’t want these items going in the trash.
For our large estate, Max Sold sent four people over to the house one day and they spent eight hours on site.
They will list anything you tell them to list. After all, every auction starts at $1.
Silverware, China, paintings, Royal Dauton figurines, accessories, kitchen appliances, furniture, old electronics, even a stair glide!
They took photos of and measurements of every single item, labelled them, and catalogued them.
Then they sent a database to my clients to “approve,” and the auction began.
These clients made about $20,000 from that auction, but it wasn’t so much the money that made them feel good. It was the fact that these items, which belonged to their parents, weren’t going in a landfill. Maybe somebody bought a full set of dinnerware for $15, and maybe that dinnerware cost $250 in 1978, but it didn’t matter. Those items were going into somebody else’s home and that’s what mattered.
After the auction is over, a date is set for pickup. This means that all the bidders show up to the property to fetch their items, and it also means that somebody needs to be home and babysit all day.
We did another Max Sold auction for a large condo and Matthew had to sit in the condo all day and wait for people to show up. We had to book the moving elevator all day, and Matthew ran interference with the concierge, helping the buyers get in and out of the building with their purchases, some of which were huge pieces of furniture!
After you’ve exhausted the family and friends, donation, and auction, you’re likely going to have a lot to throw away.
Enter one of the fastest-growing industries in the country: junk removal.
We all know the radio ads for companies like 1-800-GOT-JUNK and while they’re reputable and professional, they’re also among the most expensive.
For certain properties, my advice is to get a bin from a company like Waste Management and have it placed on the driveway. A standard rental period is one week but you can have it as long as you’d like.
We cleared out a massive house earlier this year and hired some kids from the Leaside High School football team to help out. While I was busy telling them, “My first job paid me $6.40 per hour,” they were tossing the contents of this house into a 40-cubic-yard bin for $50 per hour.
The entire bin was filled before the job was finished, but overnight, the scavengers and scrappers took about one-third of the items out of the bin, meaning we could fit the rest of the junk the next day.
When in doubt, put something on the curb and there’s a good chance that a scavenger will take it.
In the end, junk removal isn’t nearly as expensive as it could be, so long as you think outside the box a little bit. Get a bin, get some labour, and cut the cost by 75%.
In a perfect world, we would have friends and family take a lot of items, then be able to donate everything else to somebody in need. But it doesn’t always work that way, and junk removal is a necessary tasks for all of these houses.
You need to decide if the home is being sold in “as is condition” or not.
Once again, I don’t want to suggest that every home being sold as an estate is going to be in miserable shape, but in my experience, some of these houses haven’t been taken care of in years.
The funny thing is, I often typecast the older demographic as being so house-proud and having so much time to “putter around” that their homes are in impeccable shape! They fix everything, no matter how small! But on the flip side, there are situations where older home-owners don’t have the physical or mental capacity to look after a home.
We’ve talked about what it means to sell a home in “as is condition” on TRB before. You’re not just offering the home without a pre-inspection, and you’re not just saying, “We won’t answer any questions about the state of the home,” but rather you’re ensuring that the buyer cannot and will not have a legal objection to anything before closing.
Think of a house that’s being sold as part of an estate, where nobody has resided there for a year.
Now think about this house being sold with a closing date that’s four months away, and remaining empty during that time.
The seller remains responsible for that home until closing and the home must be delivered in the same condition upon closing that it was purchased in four months earlier. This means that the seller would be required to fix or repair any damage or deficiencies, even if the house is derelict and/or represents land value.
Not only that, if the buyer discovers undisclosed defects (they would have to be fraudulent or at least negligent in order for them to have a claim), then they can object before closing.
A scratch on the hardwood doesn’t need to be disclosed, but if the buyer discovers asbestos in the house, even though the courts hold “buyer beware,” they could attempt to hold up the closing and look for an abatement on price.
Several of the houses that we sold this year were so old and hadn’t been updated in so long that we feared what could happen between the sale and the closing date. If the furnace is 30-years-old but still worked when the sale agreement was written, but stops working a week before closing, then the seller would be liable for a new furnace!
Think about how many problems could arise in a house that’s been poorly cared for over the years, and then ask yourself if you need the potential headaches associated with it.
Selling a home in “as is condition” could decrease the marketability of the home, lower the buyer pool, and thus result in a lower sale price, but it doesn’t always. As I wrote in that infamous blog post, many buyers and agents have no idea what this even means! And if the house looks like it needs major renovations, many buyers won’t care regardless.
Alright, well this post is getting a little long in the tooth and I still have a lot more to say.
Let me pick this back up on Thursday!
