Selling Home To Pay For Care

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Long-term care, whether at your home or elsewhere, is something that you or family members may need to prepare for in old age. The high cost of this care can often lead some people to sell their leasehold or freehold properties in order to raise the necessary funds to pay for it, and this guide explains the various steps involved and how to get fair and fast offers from buyers.

1. What does it mean to sell your home in order to pay for care?
2. Ways to avoid selling a property to pay for long-term care
3. Situations when selling your home to pay for care might be necessary
4. Handling the sale of a flat or house that you jointly own with someone else
5. Four options when selling a property to pay for care
6. Frequently asked questions about selling a home to pay for care

What does it mean to sell your home in order to pay for care?

Many people will need to rely on long-term care when they get older, with nurses and other professionals doing important tasks they can’t manage on their own – everything from bathing to refilling and taking medications to various daily routines and other assistance.
There can be several reasons why someone might need long-term care, including a chronic illness, disability, mental or physical problems associated with old age, and more.
And you can choose from different types of care that can provided, such as having a carer visit someone in their home and providing support at that location, or selling your property and using the funds to pay for a move into a care home, as the independent financial advice guide website MoneyHelper explains. The right choice will depend on your unique circumstances.
But paying for this care can potentially be very expensive, and being able to afford this support might only be possible for some homeowners if they decide to sell their properties, and then use the funds that that can generate from that sale in order to cover their long-term care costs.
Regardless of whether you have recently started your retirement, are nearing retirement age, or are not yet ready to retire, you should be thinking about how to pay for long-term care.
This guide will walk you through the various ways that you might be able to avoid having to sell your freehold or leasehold house or flat to pay for care, along with circumstances in which selling will be required – and what to do if you jointly own a home with someone and they don’t want to sell. It also covers different options for how to sell your property, with important tips on the steps to take in order to boost your chances of receiving a competitive and swift offer.

Ways to avoid selling a property to pay for long-term care

Just because you, or a loved one, needs to have long-term care does not necessarily mean that you will need to sell your property. There are a few different options that might be available, depending on your budget, your needs and other issues, where you can avoid selling, as the charity Independent Age details.
Whether or not any of these potential funding options will work as an alternative to selling your leasehold or freehold flat or house will depend on many factors specific to your situation, including your ability to meet the repayment terms of some of the methods.
Seek equity release: You could consider equity release, which is a way to borrow money against the funds you’ve already paid to your mortgage lender. This can produce a significant amount of funding on a relatively quick schedule, and you could then use this to pay for your long-term care – but there are certain restrictions to obtaining this relief.
Apply for a loan: Another solution could be applying for a personal secured or unsecured loan in order to raise the funds needed to pay for the long-term care you’re seeking, whether for yourself or someone else. But beware that private lenders are likely to charge very high interest rates and have other strict conditions for such a loan, and if you fall behind in the payments then they could eventually try to repossess your home in order to clear the debt.
Defer your payments: Some local authorities might be willing to agree to a situation in which you do not have to pay for long-term care whilst you are alive and you can continue living in your property until your death. At that time, the council would be allowed to sell your property and use however much of the proceeds necessary to pay what you owed for the care. Check with your local authority to see what conditions apply to these deferred payment plans.
Ask for a payment plan: Alternatively, you could establish what it is known as a fee payment plan for immediate but long-term care, wherein you’ll be required to pay a set amount of money upfront, and in exchange you’ll receive a consistent income until you die that you can use toward paying for your care. As with the other options outlined in this section, whether this type of payment plan is suitable for you will be dependent on your budget and needs.

Situations when selling your home to pay for care might be necessary

Unfortunately, there are often other scenarios where a homeowner is left with no choice but to seek a buyer for their leasehold or freehold property, so that they can raise sufficient funds to cover the expenses of providing long-term care for themselves or a family member.
As part of the long-term care planning process, your local authority will conduct a financial assessment to determine your current care needs, where you are receiving that care, how much you possess in assets such as your property, and other factors. The results of this assessment will determine in part whether you’ll need to sell your home to pay for the care, as explained on the website for the charity Alzheimer’s Society.
Any assessment worth less than a threshold level could mean that you are eligible for some financial support from the local authority, in addition to paying what you are able to for the care.
If you are already receiving long-term care in your own property, the current value of your leasehold or freehold house or flat will be excluded from the financial assessment. But if you’re living in a care home already, the value of your property may be included in the assessment.

Handling the sale of a flat or house that you jointly own with someone else

One potential problem that might arise when planning to sell your home to pay for long-term care is if you jointly own the house or flat with someone who could complicate the sale.
A common situation where this can occur is between a husband and a wife that jointly purchased a home but they are now having an acrimonious divorce, in which one partner wants to sell the property and the other wants to keep it. This can create legal issues and other problems that might complicate the selling process – but theses hurdles are not impossible to overcome.
There are legal steps that the person objecting to the sale might try to pursue, but you also have options available for increasing your prospects of selling the home over their objections. It’s advised that you speak with a legal professional should you find yourself in this situation, because they will be able to tell you whether it will be possible to seek a buyer for the property.
The local authority will still conduct a financial assessment of you, the joint owner and the property, and they are not allowed to work from the assumption that you and the other person hold equal shares in the house or flat. The council must base your financial assessment on the share of the property that you own, but be prepared to have documentation to prove this.

Four options when selling a property to pay for care

Selling your current freehold or leasehold flat, house or other type of residential property in order to adequately fund long-term care might sometimes be the simplest and best option, as the National Health Service notes.
If you have decided that seeking a buyer for your home is how you’d like to proceed, you will need to pick a method for selling it. The typical choices are selling via an estate agent, selling to a quick property buyer, selling without any help or selling at a property auction. Some of these approaches have prominent disadvantages, such as having to pay potentially expensive commission when using an auctioneer or estate agent. Other options come with great benefits, like quick buyers being able to finalise the purchase of most homes in just a few short weeks.
To help you with identifying the potential best match for your situation, you should review the specific details of the four methods below and then compare them against your main aims with selling. This can include important factors such as how much commission you might be willing to spend, the length of time you can wait before selling, and your preferred sale price.

Selling via an estate agent

This can be a low-effort way to sell your leasehold or freehold home, because the estate agent will do the bulk of the work – everything from preparing a listing that describes your property and features photographs of it through to advertising this listing online, in their office and in local newspapers, and from scheduling viewings to give prospective buyers a chance to see the home in person through to fielding buyers’ offers and ideally taking one to completion.
In the event that the estate agent is able to find a buyer for your flat or house, they will charge you commission as a percentage of your property’s final sale price. You can expect this fee to increase your overall selling expenses because the estate agent will subtract their commission immediately from the eventual sale proceeds.
This is far from the quickest method for selling any type of home, and you should anticipate having to wait many months, or even more than a full year, before you are able to sell.
Unfortunately, even if you get a serious offer from a buyer this way, they could cancel the offer and abandon the purchase without any penalty, any time until just before contracts are exchanged. You will need to begin again with trying to find a buyer for your house or flat if this situation were to occur, and that can extend the selling timeline by many months.

Selling to a quick property buyer

Often the fastest way to sell any type of property is by contacting a quick home buyer such as LDN Properties. These companies have the funds available to purchase properties right away, with no waiting for weeks or months to get a mortgage that will pay for the transaction. This cuts the timeline for selling to just a handful of weeks, and that includes exchanging contracts.
Another perk of using a quick buyer to sell your home is that you won’t have to pay any commission, which will assist you in reducing your total selling expenses. But if you end up selling through the services of an auctioneer or estate agent, they will charge you fees as a percentage of the home’s sale price and this will increase the cost of selling your property.
Quick buyers are also able to swift and competitive offers to purchase almost any home regardless of its age, condition, location, shape, size or type – even those properties considered to have problems like rot or subsidence. By way of example, since 2003 LDN Properties has made a wide range of property purchases that includes houses with a restrictive covenant, blocks of flats, properties with a septic tank, houses located near to railway lines, flats above commercial premises, properties near a motorway, and a lengthy list of many other property sale scenarios.
For your additional security when selling to a quick buyer, ask them if they are members of The Property Ombudsman (TPO). This is an independent entity that publishes rules for all members to follow that aim to shield homeowners against scams in the quick buying industry. Never sell your home to a non-TPO member because there’s the risk that the company is fraudulent.
Checking the registration status of a quick buyer is fast, free and simple – just visit TPO’s website, click on the "Find a Member" tab and then type in the name of a specific company. If they are truly a TPO member, like LDN Properties, you’ll be shown their registration details. If the company is not registered with the organisation then you will get no results.

Selling without any help

A third choice for selling would be doing so on your own, but this will take up a lot of time and can be very stressful. That’s because you’ll have to handle every step, starting with creating and advertising a listing, then organising and leading viewings around the property and finally hearing various offers from buyers and trying to guide one to exchange of contracts.
It’s a significant amount of work and you won’t be able to simply do this in your spare time. That’s why selling without any help is generally only suggested as a viable option for those people who known a friend or family member skilled in selling homes and who might be willing to help out for free, or for homeowners who have their own success in selling properties.
Without this kind of expertise, you could be looking at more than a year before managing to sell. And echoing one of the drawbacks of selling via an estate agent, when you sell without any help a buyer could make an offer and then take it back without penalty until contracts are exchanged. If this happens, it will prolong the selling timeline even further, because it will mean that the sale has fallen through and you will need to try again with finding a potential buyer.
Possibly the only advantage of this method for selling is that you won’t need to pay an estate agent or auctioneer any fees, but the other costs involved with marketing your property and additional steps involved with selling solo might eliminate any savings that you make.
Instead, think about selling your home to a no-commission quick property buying company, like LDN Properties. They will never charge you any fees, so you’ll get the same reduced expenses as selling on your own, but they can also finalise the process of buying your flat or house within a handful of weeks – a much speedier timeline than you can expect when selling without help.

Selling at a property auction

Yet another option for selling your leasehold or freehold house or flat is doing so at an auction, where you will be asked to select a reserve price – the lowest price at which you can agree to sell your property – and then people will place bids of always increasing value on the home.
Beware that you might only get one bid, at the reserve price, and this would be deemed a binding legal sale that the winning bidder could sue to enforce, if you try to walk away from the sale because of the relatively low price. That’s why it’s crucial for you to choose a reserve price that should hopefully produce a profit from the sale, even after paying the auctioneer’s fees.
And those fees are often charged as a percentage of a property’s final sale price at the auction, with the commission subtracted immediately from the sale proceeds. If you are looking to cut costs when selling your home, you should consider some of the other options.
This is also often a fairly slow well to sell any type of property, as it includes many long periods of waiting. You could have a delay of many weeks or months after you list your home for sale and before the auction takes place. Should you manage to sell the home at the auction, the winning high bidder is then often given about 28 days to finish all of their mandatory actions, which includes signing the relevant legal documents and other important steps.
It’s possible that some auctioneers may be open to setting a shorter deadline for the eventual buyer to complete all of these tasks, so you should make enquiries about this possibility.
You could also ask individual auctioneers if they might be willing to reduce your costs by either having the winning high bidder pay for some of your expenses, or for the auctioneer to reduce the percentage rate of commission they plan on charging you.

Top queries and answers about selling a home to pay for care

Homeowners thinking of selling their home quickly may have a few questions for us, ranging from how fast they can sell through to selling a home in a poor state. Here are some of the main questions we can hear about selling a home to pay for care:

Your top questions when selling a home to pay for care