Buying a parent’s retirement flat at market value for care fees

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My DF needs to go in a care home. He has limited savings. Certainly less than 23k threshold but some. His retirement home is 'worth' say 100k for example.

I would like to buy it for myself. The proceeds will of course go to the local authority to pay back any fees owed and or due in the future.

It is a retirement home which can be notoriously hard to sell. I understand I have to buy at market value and im fine with that but given the current market how can i know that im not overpaying or indeed underpaying unless perhaps he gets an offer from an unrelated buyer? Someone may think its only worth say 85 to them. I don't really want to pay 100k for it if there's no hope of achieving that on the open market.

Has anyone else been in a similar situation? Will it just come down to a R.I.C.S valuation and hope they're in line with the current downtrend in market values.

Sorry for the long post

If it’s a retirement home - can you buy it?

Yes, im old enough 😉

Why do you have to buy it at all . It’s between your father and the council surely . What would happen if you didn’t have the funds to buy it . Personally I wouldn’t touch a retirement home with a barge pole .

I don't have to buy it but it would suit me to live in it due to its size and location leaving me enough to enjoy retirement and help my ds buy a home.

You’ll be leaving your son an albatross around his neck.

Im fully aware of maintenance fees and included that in my budget and savings if it goes ahead.

I don't think so personally. He will have his own place. Something will always sell if it's the right price and he's not greedy. In the future it may well have to be sold to fund a care home for me, who knows. I hope to have at least another 20 good years in me but again, no one knows! People have to live somewhere and if it sells for 20k in the future then so be it, he'll have his inheritance now when it matters. I just have to live for 7 more years 😄

And what about when you pass away . The burden of maintenance and service charges fall to your son until the property is sold . And if it’s sold it will be for a worthless amount just to offload it . No one wants them .

Not strictly true according to rightmove, there are plenty still being sold. Plenty aren't too but they're priced too high imo....people can be greedy, which is their downfall.

When my parents bought their retirement flat, they have to have an interview with the manager first. I’m not saying you shouldn’t try buy it if you can. But this might be hurdle you need to get over.

Why would it be a hurdle? I don't recall my df having one. Was it to disclose medical history or something 🤔 Thanks for the heads up though, I appreciate it.

Whats the service charges?

Because I have to say flats round here with high charges go for about 30k, people cant get them away.

Does your dad have mental capacity to make his own finance decisions? If so, does he want to sell it to you?
if you’re his power of attorney for finances then you need to be careful of making this decision as it could be a conflict of interests.

Could it be rented out without you needing to buy it, would that work for you?

What kind of retirement flat is it?

My dad lives in an over 55s development but to all intents and purposes it's a normal flat, with normal service charges.

They get snapped up really quickly when they go up for sale.

I think PPs are worried it's a McCarthy and Stone situation

People on here hate retirement flats. We bought one for my Mum. Yes there were service charges but she couldn't live in her 3 bed semi with 200ft garden any more. We paid about 60,000 and sold it for about the same price 5 years later. The 5 years were really happy for mum. According to right move the ones in her block are still about 60,000. Not brilliant financially but Mum loved it there. She was so lonely in her house. She just had to walk up the corridor to the communal lounge and she had company. She made many friends there. Might be an idea to check the price but if you think you'll like it, go for it.

Me and my siblings have p.o.a. All the money will go to the local authority to fund his ongoing care so I don't stand to gain or him to lose at all. Im just trying to establish what the local authority would consider actual market value given the market right now.

You’ll need valuations - a good guide would be to look at whats needed for probate.

If you go the RICS route you can have an honest discussion with the surveyor about the context, and encourage them that you want realistic not optimistic. Estate agents typically round up, although you may get some who’ll do a more realistic valuation for a fee (given that to get realistic you may need to give the context that the’re not quoting for business). Recent sold prices may be useful, particularly if there are any in the same development or similar ones.

Im 100% certain he's happy for me to buy it if I want to.

Currently circa 3500 per annum but its just about to have a 400k investment with new roof and new fire doors, decoration etc but that money is already in the pot so hopefully no mega extra fees foreseeable any time soon.

Probably not as the local authority will want the money.

The same, over 55. It may well be Mccarthy and stone yes, I'll do some more digging, thanks.

To be perfectly honest I don't intend on being there that much, i'd like to travel as much as possible whilst I'm still fit and able. The money left over will more than cover what I want to do. When i'm no longer fit and able, it will be a nice size flat to live in, in a great location.

Resale can definitely be harder. There’s currently a lot of them for sale in my small area, a large chunk of which have been on sale for 6+ months.

If something goes wrong for your DS in future (such as a marriage breakdown for example) he wouldn’t be able to come and live with you.

If your son inherits it and it takes a while to sell he will be liable for all the service charges in the meantime which can become quite costly and would be a big financial burden if he was living paycheck to paycheck at the time of this happening.

Not saying you shouldn’t do it, I think they can work out well for some people, but do think it needs some food for thought.

And the flats currently for sale, don't stay for sale for too long. Some have gone for more than the previous price in the last 5 years, some for a bit less. So as long as its priced right it shouldn't be a problem i don't think. People need somewhere to live and if they factor in maintenance and the fact they're usually half the price or more of similar non retirement flats then it can be a good option. Clearly not for everyone, I get that.