What if your home does not fetch the assessed value?

This is a somewhat legal question that you can't afford to be wrong about, so I would see an elder law attorney who's well acquainted with such matters. I am assuming to don't owe Medicaid at present, but the nursing home. So get an updated assessment by someone who understands the structural deficits, sell, and the proceeds will go to the nursing home. If your father is then BROKE they can go after him but cannot touch SS money and retirement funds, so they will place a lien on any other property. If there is nothing, well, you cannot get blood out of a turnip I am thinking.

But, again, you cannot afford to be wrong, so this is an attorney question at this point. Your Dad's funds pay for questions about his estate.

You can pay to get independent appraisals of the house. In our state, the DHHS (which administers Medicaid) will go by the tax assessed value of the property if there is no other valuation. However, they suggested that we get two independent appraisals, and they would be willing to go with the average in determining fair market value. We filed copies of the appraisals with them before it came time for the actual sale. An apparaisal, unlike a tax assessment, will be more detailed and take into account the condition of the property. There are people who are appraisers but who are not realtors, and it might be better to get someone like that.

In my area the county assessed value means nothing. It's not based on the THAT house but is based on a square footage, no of bathrooms, etc algorithm that looks at all similar homes in the area. The real value of a home is what someone, on the open market and with no ties to the seller, is willing to pay for it. Having a good realtor who markets the home appropriately is what matters. In my case my neighbor, whose home was larger than mine, had a much higher county assessed value, but her home had major structural and cosmetic issues. My home was in pristine condition and fully updated. We sold our homes within a year of each other and I got over $200,000 more as a sales price. They both sold for their VALUE regardless of the county assessment. Getting a real estate appraiser to value your home before it goes on the market may be a good idea so that there are no questions afterward

I would not use a realtor. I wish I had used an appraiser. Appraisers should look at everything. You want a Market Value.

Has this Realtor dealt with FMV aspect of LTC Medicaid applicant before? Can pose issues, especially if Realtor does every 3 week price reduction approach.

I’d suggest that you first get a residential inspection done. & by someone who gives you a report with their State license on report and maybe a “seal” as well. Should be 20+ pages with color photos of all spaces…. Like get up into the roof interior and crawl spaces and take fotos on all.

Then with this report in your hands, you contact a residential appraiser. And you give them the inspection report that they can choose to use (if they want to, which they will, but ya don’t force the issue). What you want is a more “conservative” approach to the appraisal. This usually is NOT what a Realtor wants, they will want it to be the highest possible as = higher listing price = higher commission. Title companies and probate attorneys should have names of residential inspectors and appraisers if this does not pan out to get names from a Realtor. The appraiser goes and does their viewing on the house, takes the Inspection report and then gives you back their report on the State residential appraisal form with their signature, state license and seal.

If structural issues are that foundation compromised, you might, MiGHT, want to get a structural engineer report done. I did all 3 for my moms house. Finding residential structural engineer can be tricky in some areas or could have a long wait time. Also $$$. But it could be worthwhile to establish why a property poses issues for comparables or sell-ability. For example if a home has a F grade 2 section foundation pier and beam at the edge of a watershed, this could be important as it may not - to my understanding- ever qualify for FHA lending due to foundation deficiencies. Fwiw FHA loans are about 25/30% of market but tend to be majority for more modest priced homes. & Some conventional lenders won’t lend on F grades. Ask your Realtor if where your dads house is IF buyer will have an issue getting lending on your Dads place that has obvious foundation issues. Cause if so, that means “cash only” offers and those will want it for basically a steal or less than land value.

But I digress, so you have the fresh Appraisal. It is a valid legal document. And if significantly less than current tax assessor value, it is what it is. The new lower value is what you can present to LTC Medicaid for your fathers home FMV aka its Fair Market Value. It is a legal valid document, independently done. But do check with his caseworker if an additional Realtor comps needed as well.

Also when dad gets next tax bill, should he still own the place, you may want to think about doing do a protest & take this Appraisal along with that Inspection report and its photos to get the tax assessor/ collector value reset.

Please realize that if you spend your own funds to make it “market ready” and expecting to be reimbursed from Act of Sale $, that will not be easily accomplished. As home in dads name, all the $ is his; if he gives you any $ it looks like gifting as Medicaid tends to take the viewpoint that what we do for our elders done 100% out of a sense of familial responsibility without expectation of compensation. You need to do some sort of Memo of Understanding or Agreement before any spends as to repayment on Goods and Services to come out of the Act of Sale if dad is still competent and cognitive enough to do this. Or pay what needs to get done & forgetabtit.

Realtors ime tend to want properties spruced up, fresh paint, yard with new plantings, declutter, new hardware & showerheads & faucets. Let the Realtor know if that is absolutely not happening.

If there are serious structural issues, be sure Dads homeowners policy gets a rider to be on Realtor’s MLS and lockbox viewing.