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Read Full Bio >If you or a loved one are likely to require care in a residential facility in the near future, or if you are considering the hire of live-in or visiting carers, you may be concerned about the expenses involved.
After all, care is often prohibitively costly – and, in some cases, it can seem as if the only way forward is to sell your property and downsize, or even to move into rental accommodation in order to access the lump sum required.
This is invariably a tough decision to make, and the resulting stress can be significant. However, there may be no reason to worry about having to part with your property. There may be other ways to access the funds you need to pay for care without having to sell your home.
Here, we explore your options, discuss how you may avoid selling property to manage care costs.
If, however, you have planned to use your home for this purpose, or if you find you have no other option, you should still read on. We will also go through the best ways to sell fast that will ensure you have access to the resulting funds in good time.
Is Selling the Only Option?
Your home may well be your most valuable asset. If so, should you decide to sell it to access funds fast, it is possible that you will regret losing your place on the property ladder further down the line.
For this reason, it is definitely worth doing some research to check whether you may be eligible for government-funded support, or whether there are other routes you can take, before you decide to sell.
Funded Care
It is a good idea to contact the Citizens Advice Bureau as well as exploring the options available via your local area authority for funded or subsidised care.
If you do not qualify for local authority funding – and are therefore considered a “self-funder” – you may still be able to access certain other benefits, such as tax-free Attendance Allowance. You must be over 65 to qualify for this.
This is not means-tested and is available at different rates depending on the type of care you require, and when you are likely to need it (for example, whether you will require it at night as well as during the day).
Those under 65 requiring care may apply for Personal Independence Payments (PIP).
You should also explore Continuing Healthcare Funding (CHC) or Funded Nursing Care (FNC), as these avenues may offer you some financial relief, too, if you are eligible.
You or your loved one may feel that residential care is the only recourse due to the current unsuitability of the property in which you or they live. However, there might well be a way around this challenge, too.
Your local council could be able to provide a grant to help you adapt your property so that you do not have to move. Not only may this help you to avoid costly care fees, but it can also keep you in comfort as you are not forced to leave those familiar surroundings behind.
Rent Out Your Home
If you wish to retain your property as an asset to leave to loved ones, or if you intend to return to your home after spending time in care, you might consider renting it out.
The rental income you receive can be used to pay for your care. Remember, you will have to pay tax as a “landlord”, and you need to be able to properly manage the property in order to adhere to legislation.
If you cannot do this yourself, you will need to employ someone else to do it for you – or even to hire a property management company. This will naturally occur additional expenses, so it’s important to budget carefully in order to decide whether this is a viable option.
Deferred Payment Schemes
Individuals who own their home may also be eligible for a “deferred payment scheme”.
This method sees the relevant local area authority paying for the individual’s care, then, after that person passes away, the council is authorised to sell the person’s property to recoup the amount.
Equity Release
It is also possible to release equity from your property in order to cover the costs of your care, or that of a loved one.
You can either do this via a lifetime house repayment or a home reversion plan, though you will need to be at least 55 to qualify for the former or 65 for the latter.
Your home will also need to be in good condition and worth over a certain amount.
What’s more, equity release will likely result in you having to pay additional interest on your mortgage, so it is important that you budget carefully and make sure that you will be able to afford this route before you take any definite steps.
What if I Have to Sell My House to Pay for Care?
If you cannot find any way around selling property to pay for residential or long term care, there are a number of options available to make the process quick, straightforward and as stress-free as possible.
Estate agent sales can really lumber on, becoming complex and stressful as a result of chains falling through and buyers dragging their feet or dropping out at the last minute. It’s hard to predict whether a property will sell fast or whether it will sit on the market for months or years.
This method can also prove expensive, with the seller having to keep up with ongoing maintenance and mortgage payments as well as agency and legal costs the longer the sale goes on.
However, there are methods that are quicker, more secure and less stressful – ideal for individuals who wish to receive the proceeds from their sale as swiftly and efficiently as possible.
Auction Sale
Selling via auction is a great alternative to the estate agency process.
You can now opt for the traditional or “unconditional” method, which involves all of the bidding taking place on a single day and the eventual buyer automatically entering a legally binding contract to complete the transaction, or the modern “conditional” method.
Via the conditional method, the property is listed online for a period of time, which can be up to a month or even more in certain cases. As long as the property is listed and “live”, potential buyers can place bids.
Once bidding closes, the person who placed the highest acceptable offer must pay a 5% reservation fee. This holds the property for them while they instruct a solicitor, arrange valuations, apply for a mortgage and undertake any other required duties.
They usually have around 28 days to do this, by the end of which time they will be expected to have paid a 10% deposit. Typically, they will then have another 28 days to complete the transaction.
Modern method auctions allow the buyer to drop out if they find themselves unable to continue with the process. The whole system is much more flexible and accessible for buyers, but as there is less certainty that the property will change hands, it is a greater risk for the seller.
Traditional auction, however, allows sellers to plan around a set sale date with some certainty.
While there is still the chance that bids will not reach the reserve price agreed between the seller and the auction house, auction is usually still less risky – and much quicker – than an estate agency sale.
What’s more, the seller will receive the 10% deposit up front via traditional auction, which means that some money from the sale will be accessible almost immediately.
“We Buy Any House” Companies
If auctions are still a little too risky or long-winded for your requirements (after all, even via a traditional auction, a sale can take a couple of months or more to complete), a good alternative is to request the services of a fast home buying company.
These organisations, also known as “we buy any house” companies, will purchase property directly from the vendor for cash, which means there is no reliance on third parties, no need to host viewings and no need to wait for a chain to complete.
Can I trust “fast sale” companies?
The quick home buying industry is not subject to any government regulation and, in the past, this facilitated the rise of a number of unscrupulous companies set up to scam vulnerable sellers.
Instances of gazundering, duping vendors into option contracts and undervaluing led to a culture of mistrust, which is why, even to this day, people are cautious to approach a “we buy any house” company.
However, in 2013, a number of companies in the sector clubbed together to tackle the culprits undermining the industry, forming the NAPB (National Association of Property Buyers).
This organisation developed a code of practice, promising to uphold excellent standards and working to prevent unscrupulous activity in the sector.
If you find that a “we buy any house” company is a member of the NAPB, you can rest assured that they are a trustworthy company run by conscientious individuals.
It’s also a good idea to make sure the company you choose is a member of the Property Ombudsman Scheme (TPOS).
They may also be part of the NAEA (National Association of Estate Agents” and the FSB (the Federation of Small Businesses), along with a number of other regulatory bodies.
Looking into a company’s online reviews on sites like Trustpilot, allAgents, Reviews.io, Feefo and more will give you a clear insight into their standard of customer service and the overall ease and transparency of the process.
Why use a fast sale company to sell my property to pay for care?
Most people who choose to use “we buy any house” companies for their sale do so because organisations of this kind work quickly and often waive or cover most fees. They also pay directly into the vendor’s bank account as soon as the sale is complete.
The process is often much more secure and streamlined than other options.
If you are in need of a lump sum of cash fast, with minimal stress and risk, these benefits will surely be among your priorities. That is what makes this approach a great option for those who are planning to sell their property to pay for care.
The process
The “we buy any house” process usually starts with the vendor approaching the organisation and requesting a no obligation cash offer for their property.
The company responds, usually within 24 hours, and provides an estimated quote of the amount they would be willing to pay.
It is important to note that genuine cash buying companies are not able to offer 100% of a property’s market value, as they make money by buying at a discounted rate and selling on the open market.
You are most likely to be offered between 70 and 85% of your home’s value. This is why fast home buying companies usually attract clients who have prioritised speed over profit.
If the vendor is happy to move forward with the provisional offer provided by the company, they will then arrange a valuation of the property. Once this is complete, they will then make a firm offer based on the findings, which the vendor may then accept or decline.
If the vendor accepts, conveyancers are then instructed. Usually, fast home buying companies will have their own pool of solicitors whom they trust to work swiftly and efficiently to meet the client’s required timescales. However, others permit vendors to choose their own conveyancer.
The process is completed as quickly as possible, and the property changes hands, moving from the buyer’s possession directly into the company’s without the need for third party buyer involvement.
Many “we buy any house” companies will cover all expenses arising from the legal process, and may also waive agency and valuation fees.
The process is taken care of almost entirely in-house, with just a few items of paperwork for the client to sign.
Drawbacks
As we have mentioned, you will not receive 100% of your property’s market value from a “we buy any house” company.
For that reason, you will need to work to determine whether selling your property at between 70 and 85% of its value will provide you with sufficient funds to make the required payments.
In Conclusion
If you or someone you love is likely to be taken into care soon, it is important that you look into a range of payment options and research available financial aid before you opt to sell a valuable asset such as your home.
However, if you have been planning to use your property in this way, or if you find that there is no other option available, the use of a trustworthy fast home buying company may well be your best course of action.
For further information about organisations of this kind, or to receive a no obligation cash offer for your home, simply get in touch with our knowledgeable property buying specialists today. They will be happy to provide you with the guidance and information you require.
If you decide to move forward with a quote from our team, we may be able to purchase your property directly in as few as seven days, with all legal expenses covered and all agency fees waived.
