Here at AgingParents.com we see lots of problems. Real estate agents and elder-related issues are among them. This is a real case.
Edward is 80 years of age, living in a senior’s home where he is able to care for his physical needs independently. But his mind is not as healthy as the rest of him. He has very significant short-term memory loss and is also quite paranoid. He is in CA and owns a home worth well over $1M in a heated real estate market.
The value of a home can be more than the parent thinks
His daughter, Dottie has a Durable Power of Attorney and has been handling her father’s financial business for some time. A neighbor of Edward’s called Dottie and told her that she had seen a “for sale” sign outside her Dad’s house for a day and then it was taken down. Dottie was shocked to learn this and immediately checked into the situation. She learned that her father had engaged a realtor who had initiated a sale of Dad’s house for $400K less than it’s fair market value. She sought legal advice.
The attorney arranged for Edward to be evaluated by a psychologist to determine whether he had the capacity to understand his finances or even the value of his home. The psychologist did a lengthy evaluation and assessed Edward’s ability to understand a transaction as important as selling his home and to understand its value. Edward did not have financial capacity. He did not recall that he had placed his home on the market. He had paranoias about his house but had no awareness of what had happened with the realtor. He has hallucinations about seeing a teenager in his room, hearing gunshots inside his apartment, and seeing men crawling out of his jukebox, his prized possession, and staring at him. In other words, he likely has mental illness along with dementia. Dottie’s attorney applied to the court for guardianship over Edward, given how easy it had been for the realtor to grab Edward’s house and attempt to sell it immediately, on the cheap, in a red-hot market.
There is a delay in getting the guardianship (called conservatorship in CA) application before the judge and getting a hearing date. In the interim, the realtor was notified that the transaction which had not closed would need to be stopped, given that Edward did not have the capacity to do it. The realtor argued that Edward was fine and yeah, he was a little paranoid but he could do whatever he wanted with his house. She refused to accept the doctor’s letter informing all that Edward lacked the capacity to understand the consequences of financial transactions. She refused to accept the authority Dottie had with the power of attorney.
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Greed for the real estate commission seemed to dominate any communication about Edward with Dottie’s attorney. When confronted about how the realtor came to get Edward to list the home for sale, she stated that Dottie had signed the listing agreement. Dottie had not done so. Her lawyer asked for a copy of the listing agreement, but the realtor refused to provide it. The truth was about to come out.
This case is not yet resolved but it is likely that the attempted sale of an impaired elder’s home for well below market value will not go through. There was no urgent need for him to sell. He had been previously examined by physicians and diagnosed with dementia long before the more recent evaluation by the psychologist. The legal considerations are as follows:
- For elders with dementia, the capacity to make safe financial decisions is one of the first things to decline. They may seem otherwise “fine” but their money judgment is dangerously impaired, even in the early stages of the disease.
- The realtor’s failure to provide the listing agreement that Dottie had allegedly signed is telling. More likely, they had Edward himself sign it, even knowing that he was easily manipulated and paranoid, among other symptoms. Comparing signatures will be revealing, once the listing agreement is obtained.
- The lawyer can seek a legal remedy from the court for a Restraining Order, to keep the predatory realtor and her c0-conspirators (others in her office, the buyer, etc.) away from Edward. Such a request to the court supports the need for conservatorship, as it proved how vulnerable Edward was to these predatory practices. Conservatorship will end the attempted theft for good, as no one can do business directly with Edward once it is granted.
If your own aging loved one is having memory loss, getting lost and having trouble remembering to pay bills or keep track of money, it is time for family or any other responsible person to step in. You need to take control so that something like what happened to Edward won’t happen to them. Obtaining a signed and notarized Durable Power of Attorney when your aging parent is still “with it” is imperative.
When aging parents are in a setting like a seniors’ home, unscrupulous people on the inside can conspire with crooked realtors to take property, sell it quickly for a low price and keep the valuable commissions. They learn about the vulnerable elders from someone who knows they own a home, as impaired elders generally do not march out to the realtor on their own. (There are exceptions, as some impaired ones do, but most don’t). The real estate industry has plenty of honest folks in it, but it also has thieves like the one in this story.
The lawyer for Dottie is reporting the matter to the Real Estate Board though it seems unlikely that discipline will take place. The real estate industry, as I’ve seen it, has no ethical standards applying to the sale of elders’ homes. Rather, realtors see opportunity in those who must move to seniors’ homes for their own safety, leaving their homes vacant. They are most eager to get those listings. I have asked but found no standards to be used in the industry to establish that an elder selling a home is competent to do so and knows the current market value of the home. “Yeah, he’s forgetful and paranoid but so what?” is not reflective of a standard of any kind, yet that was the crooked realtor’s only consideration.
Here’s the takeaway:
No matter how educated, sophisticated, real estate savvy or smart your aging parent has been in the past, no one is immune from developing dementia or being taken advantage of as we age. An elder’s vacant home is like an invitation for crooked realtors and other predators to get it. If family or other loved ones are paying attention, Edward’s story need not be repeated elsewhere.
