Guides · Adult family homes
Buying an adult family home business in Washington
When an adult family home sells as a going business, two things change hands on two tracks: the house, through an ordinary real estate purchase, and the business, through its own purchase agreement. The license does not transfer. You apply for your own, the seller owes every resident sixty days of written notice, and each resident decides whether to stay.
Two transactions, aimed at one closing#
The property is a normal Washington real estate purchase: a purchase and sale agreement, inspection, title, escrow, and financing on the house. That is my side of it, and I represent you on it.
The business is a separate agreement covering whatever the seller is actually selling with the home: the name, the phone number, the website, furnishings and equipment, and any goodwill. It is valued separately from the house, and it is drafted by a business broker or an attorney, not on the residential house forms.
The two have to land together, because a house without the operation, or an operation without the house, is not what you set out to buy. My job on the business half is coordination: keeping the two agreements, their deadlines and your license application moving on the same calendar with your business broker and attorney.
Some sales are the house only, with the seller closing their business first. Some are the business only, with the building leased. Knowing which one a listing is comes before anything else.
What does not come with it#
The license. A change of ownership needs a new license application and a new license, and you have to qualify on your own. The sale is only as certain as your application, so your timeline starts with it, not with the offer.
The residents' decision. The seller must give written notice sixty calendar days before the change of ownership date, to the department and to every resident or their representative, and the notice tells each resident they can decide whether to stay. If residents leave during that window, what you are buying has changed between agreement and closing. That belongs in the contract, not in an argument at the end.
The Medicaid contract. It ends with the seller's license. You sign your own. Specialty contracts such as Meaningful Day Activities, Expanded Community Services and Specialized Behavior Support do not transfer either.
Seven and eight bed status, for a new provider. A home licensed for seven or eight can only be taken over by someone who has held an adult family home license for at least 24 months, with 12 months at six or more residents and two clean full inspections. If that is not you yet, the bed count you can operate is not the bed count on the listing.
Sources
- WAC 388-76-10105, change of ownership
- WAC 388-76-10106, notice of change of ownership
- WAC 388-76-10032, seven and eight bed homes
Not sure how this applies to the house you're looking at?
Talk it through before you writeWhere these come up for sale#
There is no adult family home category in the MLS. Some are listed as ordinary residential homes with the use mentioned in the remarks, some as business opportunities, and a good share never reach the MLS at all and sell through business brokers or owner to owner.
Adult family homes for sale shows the listed ones across Washington, and says exactly how that list is built. For the ones that never get listed, the Monday list and telling me what you are after are the only real way in.
What to ask before you offer#
Two lists, because the two halves of the deal fail in different places. The full walk-through, with where to find each answer, is in what to check before buying an adult family home.
The property
- Does the licensed bed count match what the building supports? The state's room and bathroom rules are the test.
- What did the most recent DSHS inspection find? Inspection results are public.
- Sewer or septic, and what is the septic rated for?
- Is there a sprinkler system, if you ever want seven or eight beds?
- Is any of the home leased, or does the operator own it outright?
The business
- Occupancy for the last two years, documented, and how residents pay
- Exactly what is included: name, phone number, website, Google listing, furnishings, equipment
- Which staff intend to stay, and on what terms
- Why the owner is selling, and whether they will help with the handover
- What happens to price if residents move during the sixty-day notice
None of those is a reason to walk away on its own. Each is a number you want before you agree a price rather than after.
Financing is a business loan, not a home loan#
Lenders usually treat a going adult family home as a business acquisition with real estate attached, which underwrites differently from a mortgage on a house you will live in. The business's documented income matters as much as your own.
Talk to a lender who has financed adult family homes before, and do it before you write the offer, not during the contingency. The loan types, from SBA to seller carry, are in financing an adult family home purchase.
What I do, and what I do not#
I represent you on the real estate and coordinate the business side with your business broker and attorney, so the two agreements and your license application move together. My family runs a licensed adult family home in Lynnwood, so I have watched these numbers and rules from the operating side.
I am not a licensing consultant, an accountant, a lender or an attorney. The licensing steps in order are at Full Census, and the department decides the license.
If you are on the other side and selling, selling an adult family home covers the change of ownership from the owner's seat.
Common questions#
Does the license transfer when I buy an adult family home business?
No. A change of ownership requires a new license application and a new license, and you must qualify on your own. The sale depends on your application as well as on price.
Do the residents come with the home?
Not automatically. The seller must give sixty days of written notice to the department and to every resident or their representative, and each resident decides whether to stay or move.
Does the Medicaid contract transfer to the buyer?
No. It ends with the seller's license and the buyer signs their own. Specialty contracts do not transfer either.
Is buying the business and the house one transaction?
Usually two: a real estate purchase for the house and a separate business purchase agreement for the operation, valued separately and timed to close together.
Can a new provider buy a seven or eight bed adult family home?
Not at seven or eight beds. That requires an existing provider licensed for at least 24 months, with 12 months at six or more residents and two full inspections without enforcement action.
