Deciding when to sell a home as you or a loved one age is never easy—emotionally or financially. Whether you’re a senior considering your next steps or an adult child helping a parent, this comprehensive guide walks you through the entire process, from recognizing the right time to sell to understanding legal and financial implications.
Deciding when it’s time for a senior to sell their home is a deeply personal decision – but there are common signs that indicate an elderly person can’t live alone safely. Physical and mental health changes are often the biggest red flags, including:
If you’re noticing several of these signs, it’s probably time to have a serious conversation about safer living arrangements. Many seniors initially resist the idea of moving – which is natural. Home is full of memories, and selling it can feel like a loss.
Approach the topic with empathy and patience. Involve a family doctor or geriatric care manager if needed; sometimes an expert’s input that it’s “no longer safe to live alone” carries weight.
Remember, the goal is to keep your loved one safe, healthy, and cared for, even if that means making a hard choice now to improve their quality of life.
One major decision is when to actually put the house on the market – before your senior loved one moves into senior/assisted living, or after. Each approach has pros and cons, and the best timing depends on your family’s financial needs and your parents’ situation.
| Sell Home Before Move | Sell Home After Move |
| Immediate funds available for care | Address urgent health needs first |
| Avoid double expenses (mortgage, taxes, utilities) | Easier home prep (repairs/staging without senior living there) |
| Streamlined transition (sell and move in one step) | Less stress for the senior (not living through showings) |
| Con: finding senior or assisted living and selling simultaneously can be hectic | Con: carrying costs on an empty home can be expensive and pose risks (burst pipes, squatters, etc.) |
| Home value can be impacted by items in the home or needed repairs | Market conditions may fluctuate while the house remains unsold, affecting sale price. |
Many families on Long Island choose to sell the home before moving so that the home sale proceeds are readily available to pay for care. However, in cases of sudden health crises (like a hospitalization), moving the senior immediately into care takes priority – you deal with the house once your loved one is safely relocated.
Bridge loans: What if you need to move Mom now, but the house might take time to sell? One option is a bridge loan – a short-term loan using the home’s equity as collateral. This can cover assisted living costs for a few months until the house sells.
Emotional readiness: Also consider your parent’s emotional state. Some seniors feel more secure selling the house first so they know exactly how much money they have for their future care. Others handle the move better if they don’t have to watch their longtime home being sold while they’re still living in it. Gauge what will cause less anxiety.
At Leave The Key Homebuyers, we specialize in helping New York homeowners navigate their options. Whether you need a FREE CASH OFFER or guidance from trusted professionals—like organizers, financial planners, or attorneys—we’re here to help. Fill out the form below or call us at 631-430-0783 to get started.
Selling a senior’s home isn’t just another real estate transaction – it comes with unique challenges like decades’ worth of possessions to sort, possible repairs on an older house, and the emotional weight for everyone involved. Here’s an expert-backed step-by-step approach to make the process as smooth as possible:
Throughout this process, keep your parent involved as much as is appropriate. Even a senior with memory issues might have moments of clarity where reminiscing over old photos while packing can be therapeutic. Respect their feelings – it’s normal for an elder to feel grief or anxiety when saying goodbye to a longtime home.
Selling a home that’s been your parents’ primary residence for many years can raise a host of financial questions. Will there be taxes on the sale? Could the cash from the house affect Medicaid or other benefits? How do we budget the proceeds to actually pay for assisted living over time? This section will dive into these concerns one by one.
The good news is that most seniors won’t owe much (if any) capital gains tax when selling their primary home, thanks to an IRS rule called the primary residence exclusion. Currently, the IRS allows individuals to exclude up to $250,000 of profit (capital gain) from the sale of their primary home, or up to $500,000 if married and filing jointly.
To qualify for this home-sale exclusion, your parent must have owned and lived in the home as their principal residence for at least 2 of the last 5 years before the sale.
What if your parent hasn’t lived there 2 years in the past 5 – perhaps because they moved out due to health reasons? The IRS actually provides some relief: seniors who sell their home due to a change in health or moving into care may qualify for a partial exclusion proportional to the time they did live there.
If the home sale profit exceeds the $250k/$500k exclusion, the excess gain would be subject to capital gains tax. The tax rate for long-term capital gains is generally 15% for most people, or 20% for higher incomes.
Once the house is sold and you have the proceeds, the next challenge is financial planning for assisted living. Assisted living in New York, and especially on Long Island, is expensive – so you’ll want to budget wisely to ensure the sale proceeds last as long as possible.
First, get a clear picture of costs. In 2024, the average cost of assisted living in New York State is about $5,850 per month, but in the Long Island area, it often ranges higher. Many assisted living communities on Long Island charge between roughly $4,000 on the low end up to $8,000+ per month, depending on the level of care and luxury. In fact, some high-end communities can cost well over $10,000 per month (especially if your loved one needs specialized memory care).
Now, compare that to the home sale proceeds. Suppose your parent’s home sells for $500,000. After paying off any remaining mortgage and fees, maybe they’ll net $350,000. If assisted living is $6,000 a month, that lump sum could theoretically cover around 58 months (4.75 years) of care if that money was not invested and no other savings are available.
Engaging a financial planner who has experience with senior finances can be invaluable. They can help map out how long the proceeds will last, taking into account things like inflation and increasing care needs.
Finally, loop in your elder law or estate planning attorney about the new financial picture. The sale of the home might necessitate updating your parents’ will or trust, since their asset profile changed (for example, the will might have left the house to certain heirs, but now it’s a bank account instead).
Many adult children worry: If we sell Mom’s house to pay for care, are we accidentally messing up her Medicaid or VA benefit eligibility? It’s an important question. In short, yes, selling a home can affect need-based benefits like Medicaid and certain veterans’ pensions – because it converts a non-countable asset (the house) into countable cash. Let’s break it down:
In practical terms, if your parent is already on Medicaid or will need it within a short time (for example, they’re moving to a nursing home and applying for Medicaid coverage), think very carefully before selling the house. It might be better to delay the sale or explore exemptions (like if a spouse or disabled child lives in the home, it can be kept). New York also has a 5-year Medicaid look-back period for nursing home care. This means Medicaid will review any asset transfers (including selling a house for less than fair market value or gifting money) in the 60 months before the application. If they find a transfer that violates rules, they impose a penalty period of ineligibility.
However, selling a home for fair market value and using the money for care is not penalized – the only issue is that money counts as assets until spent down. So, there’s no penalty for selling; the “penalty” is just that Medicaid won’t kick in until the money is mostly gone.
However, if you are concerned about medicaid eligibility, there are often strategies that can be adopted to minimize your exposure and maximize your benefits, so it is worth reaching out to a specialist.
We’ve talked a lot about money and logistics, but equally important is the emotional side of this process. Your parent might be grieving the loss of their home, and you might be feeling guilty or overwhelmed. These feelings are normal.
To help manage the emotional impact:
Take care of yourself: As the adult child managing this, you’re likely juggling a lot – your own household, job, and now your parent’s needs. Caregiver stress is real. Don’t be afraid to seek support, whether it’s a caregiver support group (local senior centers or groups like AARP often host these) or just venting to a friend.
Selling on Long Island comes with its own set of advantages and challenges. Understanding our local market can help you make strategic decisions – and perhaps relieve some worries you have about being able to find a buyer or get a good price.
Home values: Long Island home prices have been strong in recent years. As of early 2025, the median sale price for single-family homes is around $670,000 in Suffolk County and $810,000 in Nassau County. In fact, Suffolk’s median price hit a record high of $680,000 recently. What does this mean for you? If your parent’s house is similar to the median, you might be looking at a substantial amount of equity that can fund many years of care. Though as you are thinking about how much money the sale will generate for care, remember that seniors’ homes are often in below average condition and that is reflected in their sales prices.
Speed of sale: In a hot market, homes—when priced appropriately—can sell within weeks. Work with your realtor or local New York homebuyer to price the home realistically based on comparable sales in the neighborhood. An overpriced home can stagnate on the market (and remember, each month unsold is a month of carrying costs).
If the house is outdated or needs work, consider whether it’s worth investing in minor upgrades or if pricing it lower “as-is” makes more sense. In many cases, as-is sales are fine in our area—there are even local real estate investors and home-buying companies (like Leave the Key Homebuyers in LI) specifically looking for as-is properties to fix up.
Seasonality: Long Island’s market has a seasonal pattern – spring is traditionally the prime selling season (April through June) when buyers are out in force.
Local resources and senior living communities: Long Island has a rich network of senior living options and elder care resources. As you sell the home and plan the next steps, take advantage of local expertise.
In terms of choosing an assisted living community, Long Island offers everything from luxury retirement communities to smaller family-run residences. A few well-known assisted living communities in our region include The Bristal Assisted Living (multiple locations in Nassau and Suffolk), Sunrise Senior Living communities, Atria Senior Living, and Benchmark Senior Living.
New York-specific laws: When selling real estate in NY, keep in mind:
Lastly, don’t overlook the value of community. Long Islanders tend to have strong neighborhood ties. Neighbors might be interested in buying the home (perhaps to have a family member move in, etc.). Or they might know someone looking. Discreetly letting the word out in the community that the house will be for sale could yield an interested buyer without much marketing needed.
One of the most delicate issues is if your parent has dementia or Alzheimer’s disease. Legally, for a home sale to be valid, the seller must have the mental capacity to understand the transaction. So, can a person with dementia sell their house? The answer is yes – but only under certain conditions.
If your loved one is still in the early stages of dementia and is legally competent, they can sign the sale documents themselves. However, if their cognitive impairment is advanced to the point that they no longer understand what signing a contract means, they cannot legally sell the property on their own . In that case, you’ll need the proper legal authority to handle the sale for them.
Power of Attorney (POA): Ideally, long before reaching a late-stage dementia, your parent would have executed a durable power of attorney document. A power of attorney allows a designated agent (for example, you as the adult child) to act on the senior’s behalf in financial and legal matters, including selling real estate.
Q: How do I know when an elderly person can’t live alone safely?
A: Look for red-flag signs in your loved one’s day-to-day life. Common indicators include trouble navigating stairs, declining personal hygiene, difficulty managing medications or finances, frequent falls or unexplained injuries, and general forgetfulness that poses safety risks (like leaving the stove on).
Q: Should we sell my parents’ home before or after moving them into senior living?
A: It depends on your financial situation and your parents’ urgency of need. Selling before moving provides liquid cash to pay for the assisted living upfront and avoids paying double housing costs (house + facility) simultaneously. However, if your parent needs to move immediately due to health or safety, you might relocate them first and then sell the house in their absence.
Q: Will we have to pay capital gains tax when selling my elderly mom’s house?
A: Probably not, or very little. Thanks to the IRS home sale exclusion, a single homeowner can typically exclude up to $250,000 of profit from taxes (up to $500,000 if married). You are also entitled to add back into your cost basis any costs you’ve incurred for capital improvements like a new roof, siding, flooring, etc. If you have the original receipts in case the IRS ever asks, even better.
Q: Will selling my parents’ home affect their Medicaid or VA benefits?
A: It can. Medicaid (for nursing home or home care) and VA Aid & Attendance are need-based, meaning they have asset limits. A primary home is usually exempt (not counted) for these benefits. But once you sell the home, the proceeds become countable assets, which could make your parent ineligible for Medicaid or VA pension until that money is spent down on care.
Q: Are there alternatives to selling the house to pay for assisted living?
A: Yes, a few alternatives exist, though each has pros and cons. One option is renting out the home instead of selling – the rental income could offset part of the assisted living cost – but remember that this involves becoming a landlord with all the responsibilities that involves. Also, if there are still others living in the home, a loan may be an option to help pay for care.
Q: What’s the fastest way to sell a senior’s home on Long Island if we need cash quickly?
A: If speed and simplicity are top priority, consider selling to a reputable cash home buyer. In Long Island, for example, Leave the Key Homebuyers specializes in senior transition and in purchasing homes directly for cash in as-is condition. This means you don’t have to do repairs, cleaning, or wait for buyer mortgage approvals – the company can close in a matter of weeks, getting you funds fast.
Leave the Key Homebuyers’ Certified Senior Transition Specialists (STS) will provide a fair evaluation of your property and can guide you through a quick sale with compassion and professionalism.
