When a parent moves into a nursing home, families are often left facing a difficult decision — what to do with their house. Maintaining two properties is expensive, and paying for long-term care can quickly drain savings.
In many cases, selling the home is the most practical way to fund care and simplify finances. But before listing, there are key legal, tax, and emotional factors to consider — especially in California, where property laws and Medi-Cal recovery rules can affect the outcome.
👉 Related: Read our full guide on selling a parent’s house to pay for care in California.
Step 1: Determine Who Has Legal Authority to Sell
Before taking any action, you must confirm who has the legal right to sell the property.
If your parent still has mental capacity, they can sign the listing agreement or sales documents themselves. However, if they’re in a nursing facility due to dementia, Alzheimer’s, or another condition affecting decision-making, you’ll need legal authority to act on their behalf.
Power of Attorney (POA)
If your parent signed a durable power of attorney before losing capacity, the named agent can manage financial and real-estate matters. Make sure the POA document specifically includes the power to sell or transfer real property.
Conservatorship
If no POA exists, you may need to petition the court for conservatorship. This legal process gives you authority to handle the sale — but it can take several months and requires ongoing court supervision.
Step 2: Consider Medi-Cal Eligibility and Estate Recovery
If your parent receives or plans to apply for Medi-Cal to cover nursing home costs, selling the home could impact eligibility or trigger estate recovery later.
In California, Medi-Cal doesn’t count an occupied primary residence as an asset while your parent is alive — but if the house is sold, the proceeds are considered available resources, which can affect benefits.
Estate Recovery Rules
After your parent passes away, Medi-Cal may attempt to recover costs from their estate, including from home sale proceeds.
However, certain exemptions and protections apply — such as if a surviving spouse or dependent child still lives in the home.
See the California Department of Health Care Services (DHCS) Estate Recovery Guide for details.
Step 3: Evaluate the Home’s Condition and Value
Before selling, get a clear picture of the home’s market value and what (if any) repairs it needs.
- Professional appraisal or CMA (Comparative Market Analysis): Gives you a fair market estimate.
- Home inspection (optional): Identifies major issues that could affect pricing.
If the property hasn’t been updated in decades — or has deferred maintenance — selling as-is may make the most sense.
Step 4: Decide How to Sell
Depending on the home’s condition and your timeline, there are a few ways to handle the sale.
Traditional MLS Listing
If the home is in good shape and you have time to wait for buyers, listing on the MLS can bring the highest sale price.
However, this approach can take months and may require repairs, staging, and showings — which can be overwhelming when juggling your parent’s care.
Selling As-Is to a Cash Buyer
If you need a faster, simpler sale, a cash buyer or investor can purchase the home as-is, without inspections or contingencies.
This is ideal if you’re covering nursing home costs and can’t afford delays.
Example: A Los Angeles family sold their mother’s house as-is to a cash buyer in just 14 days, allowing them to pay her care facility directly without waiting for months of showings.
Renting Temporarily
If your parent might return home, you can rent the property for extra income. Just note that rental income must be reported to Medi-Cal and could affect benefits.
Step 5: Understand the Tax Implications
Selling a parent’s home can trigger capital gains taxes, depending on how long they owned it and whether it was their primary residence.
- If the home was your parent’s principal residence for at least two of the past five years, they may qualify for the $250,000 (single) or $500,000 (married) exclusion.
- If you’ve inherited the home and sell it later, you’ll receive a stepped-up basis — meaning you’re only taxed on the difference between the sale price and the home’s market value at the time of inheritance.
Review the IRS rules on capital gains exclusions for home sales.
Step 6: Use Proceeds Wisely
After selling, families often use proceeds to:
- Pay for nursing home or assisted-living care
- Settle medical or legal expenses
- Fund a Medi-Cal-compliant trust for ongoing care needs
It’s crucial to work with a financial planner or elder-law attorney to ensure the proceeds are handled correctly — especially if your parent receives Medi-Cal.
Step 7: Communicate With All Heirs Early
Even if the home hasn’t been inherited yet, clear communication prevents conflict later.
Discuss how the proceeds will be used, who will manage the sale, and what happens after your parent’s passing.
If there are multiple siblings or heirs, consider documenting agreements in writing to avoid probate disputes.
Step 8: Avoid Common Mistakes
❌ Rushing Into a Sale Without Legal Review
Always confirm your authority (POA or conservatorship) before signing contracts.
❌ Over-Improving an Older Home
Avoid spending tens of thousands on renovations unless you’re sure you’ll recover the cost.
❌ Ignoring Medi-Cal Implications
Selling without understanding how proceeds affect eligibility can lead to costly benefit loss.
❌ Failing to Disclose
Even if you sell as-is, California law requires disclosing known issues like leaks, foundation damage, or code violations.
Review California’s Transfer Disclosure Statement (TDS) requirements.
Example Scenario: Selling a Parent’s Home to Fund Care
A Pasadena family faced $9,000 per month in nursing home costs for their father. The house was outdated, with plumbing issues and peeling paint.
Rather than spending $40,000 on repairs, they sold the property as-is to a reputable cash buyer in under two weeks. The proceeds were placed in a trust to fund two years of care — and the family avoided future Medi-Cal estate recovery.
Key Takeaways
- Confirm legal authority to sell (POA or conservatorship).
- Review how selling affects Medi-Cal eligibility and estate recovery.
- Decide whether to list traditionally or sell as-is based on condition and timeline.
- Understand capital gains and reporting obligations.
- Communicate early with heirs to prevent disputes.
Final Thoughts
Selling a parent’s house when they move into a nursing home is both an emotional and financial decision. But with the right planning — and awareness of Medi-Cal, tax, and legal factors — you can make the process smooth and stress-free.
At Mrs. Property Solutions, we specialize in helping families navigate these transitions with compassion and efficiency. Whether your parent’s home needs repairs, has liens, or you just need to sell quickly, we can help.
👉 Need to sell your parent’s home to pay for care?
Visit Mrs. Property Solutions or call (602) 376-8391 for a fast, fair, no-obligation cash offer today.