Most clients realize that when they sell their seniors housing or long term care asset, they will incur a number of transaction-related closing costs. Having a good understanding of these costs up front through a dialogue with your broker, attorney, and accountant, can help you calculate the net proceeds upon a sale, and ensure it makes sense to go out to the market. The last thing any party to the transaction wants is an unexpected expense that jeopardizes the viability of the deal. Here are some closing costs and credits that often figure into the equation:
-Pre-payment penalties on loans (confirm the loan is not in a lockout period).
-Accrued Paid Time Off (“PTO”) – Buyer is typically credited accrued employee benefits at the time of sale
-Property Tax – All property taxes need to be brought current
-Escrow Basket – It is not uncommon for Buyers to set aside an Indemnification Escrow Holdback for a period of time (range from 6 months to 3 years) and depends largely on the perceived potential liability.
-Refundable resident deposits
-Prepaid items: RE taxes, insurances, benefits, leases, P&I (credits)
Each State is different, so it is important to also talk to your legal and tax advisors. To discuss the value of your community in today’s market so you have a baseline gross figure to work from, please contact Toby Siefert at 630-858-2501 ext. 235 or firstname.lastname@example.org