I want to start right out of the gate by making a few statements about a person with dementia selling their house.
- A person with dementia can sell their house.
- A person with dementia can sell their house as long as he or she has the legal capacity to do so.
- If a person with dementia sells a house that sale can be challenged.
- If a person with dementia sells a house and the sale is challenged a lawyer would be used to determine if the seller had the legal capacity to do so.
- Simply put legal capacity is the ability to understand what you are doing. When selling a house does the seller understand everything in the sales agreement?
- A person with dementia can be taken advantage of or “TRICKED” into selling a house for less than market value.
- Family and friends are the most common people to challenge the sale of a house if the seller had dementia.
- If you have a family member with dementia who wants to sell a house the best way to help them (in my humble opinion) is to have them work with a real estate attorney. Not only will this protect them but it will protect you also.
My experience of homeowners with dementia selling houses
I have met a number of people with dementia who wanted to sell their house to me. This is because I am a cash home buyer. Working with a person with dementia can be a tricky situation for several reasons:
- Has the adult with dementia told their family of their plans.
- Does the seller understand the value of their house?
- Can they comprehend all of the documentation?
- Do they understand that if they sell their home they will have to move?
Involving family can be an important step and I will talk about my experience with that shortly.
PROTECT THE PERSON WITH DEMENTIA: REAL ESTATE ATTORNEY
I am not an attorney. But any time a person with dementia wants to sell a house to me it is very important to involve one, or two. One for the buyer (me) and one for the seller. Legal representation ensures that the sale is performed legally. When dementia is involved this includes determining that the seller understands what is happening and has the legal capacity to make the decision to sell.
I use my attorney to guide me through the process. She has enabled me to be involved in several of these transactions. On all occasions, the family has become involved too. This happened because my attorney suggest we reach out to the family. This has always been great. A bond is often formed as we all try to do what is best.
Selling a house can be very stressful. Having a loved one with dementia is very stressful too. Combining the two?!? Well, you get my point.
I consider myself an expert in this space because of my experiences. Today I will share what I have learned so you may help your family member or friend navigate selling a house if they have dementia.
PEOPLE WITH DEMENTIA ARE VULNERABLE AND NEED TRUSTED LOYAL FRIENDS
People with dementia are vulnerable. They are vulnerable because bad people can take advantage of them. If a person with dementia owns a valuable asset like a house there is potential for someone to “trick” them into selling it very cheaply. This is cruel but it does happen.
What to Do When the Home Seller Has Dementia
People with dementia are allowed to sell their house. AND with the rising number of dementia cases, it will become more common. Because of this, it is important to understand everything about how a person with dementia can sell their home. AND when it might be best that someone steps in to make sure the deal is fair.
Today I will cover:
- Dementia and home-ownership
- Dementia and how is legal capacity determined
- How can a person with dementia sell a house if they are legally capable?
- What to do if a person with dementia wants to sell their house and they are not legally capable?
- Power of attorney for a person with dementia.
- How to challenge the sale of a home when the seller had dementia
Dementia and Homeownership
It is thoughts that there are over 6 million people with dementia in the United States. This number is expected to increase to 13 million over the next 20 years. Many of these people are older. Older people also coincide with a higher percentage of homeownership.
Because of these facts, it is becoming increasingly common that people with dementia own houses. Which in turn makes it inevitable that people with dementia will try to sell their houses.
More people with dementia and Alzheimer's selling houses
In the first 10 years of my real estate career, I only met 1 person trying to sell a house that had dementia. She was a dear old lady in Globeville, just north of downtown Denver, CO. Since then I have met almost 20 people with various stages of Alzheimer’s Disease or other forms of dementia needing to sell their homes.
People with dementia can sell their homes and it is becoming more common. Because of this, it’s important to understand all of the details.
Dementia and Legal Capacity
For any real estate transaction to be legally binding the buyer and seller must be legally capable. If you are legally capable it means you understand all the details of the documents you are signing. It is possible that a person with dementia does not understand all the details.
This is a protection mechanism because a person that is not legally capable may be taken advantage of. Selling a house is a prime example of when someone with dementia can be taken advantage of.
HOW IS LEGAL CAPACITY DETERMINED?
If a person with dementia understands the meaning of a document they have legal capacity. It is up to a lawyer to determine if the person with dementia is legally capable. They may need the assistance of specialized doctors to make sure they come to the right conclusion.
DEMENTIA/LEGAL CAPACITY AND REAL ESTATE TRANSACTIONS
A contract to buy and sell real estate is a document that lays out the terms and conditions of a home sale. This document is roughly 20 pages long. It contains a lot of jargon. It is hard to understand even for me! AND I AM A REAL ESTATE EXPERT!
A person with dementia may not understand everything in this document. A simple example of this might be understanding the sales price of the house.
Let me give you an example.
Imagine a person bought a house for $65,000. Over the years the value has gone up and the neighborhood is now very desirable. In today’s housing market the house is now worth $650,000. It is possible that a person with dementia still thinks the house is worth $65,000.
I have seen examples when a person with dementia that was selling a house didn’t understand what the house was currently worth. In these cases, it is very possible they sell their home for pennies on the dollar. They would lose a lot of their hard-earned equity. This would not be fair.
How a Person with Dementia Can Sell a House
A person with dementia can sell a house just like anyone else if they are legally capable. AND the steps for a successful sale are the same. The first thing to do is determine which of the 3 most common paths to take when selling:
- Sell the traditional route using a realtor.
- For Sale By Owner.
- Sell to a real estate investor AKA cash home buyer.
Find a trusted real estate pro
Finding anything you can trust is hard these days. There is so much information out there. And so much of it is not true!
Here is an example. The other day my cat wasn’t eating. He hadn’t for 2 days. Of course, I was very worried. I searched online. The top 20 results stated that if my cat didn’t eat for 3 days he would not survive. Of course, I was mortified, and honestly in tears! This was now Sunday so I called the emergency vet who advised the information was wrong.
HUGE RELIEF.
My point is it is hard to find good information on anything. Therefore how do you find an expert real estate agent or reputable home buyer when you need to sell your house.
THIS IS HOW YOU FIND A GOOD AGENT.
Instead of me writing the same stuff over and over I am giving you 3 articles that I myself have read. The advice in these articles is good. So much so if my mom wanted information on how to find a good agent I would tell her to read these.
- “How to Find the Right Real Estate Agent for You” by NerdWallet.com
- How to find a Real estate Agent” by RamseySolutions.com
How to Contest the Sale of a House When the Seller Has Dementia
How to Buy a House from Someone with Dementia
