Selling Your Adult Family Home: Questions & Answers

You must give DSHS and each resident, or their representative, written notice 60 calendar days before the proposed change of ownership. The notice names you and the buyer, the home, the date, the resident's right to decide whether to stay or move, and any change in policies or operations that could affect them, such as whether the new owner will serve Medicaid residents (WAC 388-76-10106).

Possibly. You can ask DSHS in writing for priority processing to avoid disrupting residents. If DSHS grants it, it may waive the 60 days, but notice is still required as early as possible (WAC 388-76-10107). Either way, the buyer cannot operate until DSHS issues the new license, and DSHS will not estimate how long that takes.

Not necessarily. Residents decide whether to stay or move, and the 60-day notice must tell them that right. Medicaid residents who stay need no new assessment, but they need new authorizations under the new owner's ProviderOne number. An Exception to Rule follows the resident. The notice must also flag any policy change that could affect them, such as whether the home will serve Medicaid residents.

Keep the home licensed and running; you keep operating until the change of ownership is approved. Give DSHS and each resident 60 days' written notice, and residents decide whether to stay or move. To avoid disrupting residents, you can ask DSHS in writing for priority processing. Medicaid residents who stay need no new assessment, only new authorizations under the new owner's ProviderOne number, and an Exception to Rule follows the resident.

Longer than a typical home sale, mainly because of the buyer's DSHS license. DSHS will not estimate how long a change-of-ownership license takes. Its posted queue showed applications received in May 2026 being processed in late September 2026, processing can take up to 60 days once an application is complete, and most applicants do not pass the first inspection. Add the 60-day resident notice, and build that into your retirement planning.

Yes. Your buyer cannot take over your license; they apply for their own, and you keep operating until the change of ownership is approved. Your license closes when you relinquish or surrender it, and DSHS starts the buyer's Medicaid contract the day the new license is assigned, the day after your license closes. That makes timing the biggest part of the plan.

Keep it continuous if you can. A home that stays licensed through the sale keeps the building rules it was licensed under. If the home closes and a new home later opens at the same address, it must meet current rules, such as the 27-inch interior doors required of homes licensed after September 20, 2026. For a family selling after a death, a home that stays licensed until a buyer takes over can be worth more than one that has closed.

It does not pass to anyone. Washington AFH licenses are not transferable, so a buyer of your business applies for its own license through a change of ownership, and your license closes when you relinquish or surrender it. To keep ownership instead, a resident manager can run the home day to day while you stay the licensee and responsible. Keeping the license continuous until a buyer takes over preserves the building rules the home was first licensed under.

The license belongs to the operator, not your house, so it does not stay with the property. Another provider can lease the house and run a home there under its own license. Timing matters: a home taken over through a change of ownership keeps the building rules it was first licensed under, but if the home closes and a new home later opens at the same address, it must meet current rules, such as 27-inch interior doors.

Only part of it. A residential appraisal values the real estate only; it does not value the operating business. A licensed, operating AFH can sell for more than the same house as a residence when the buyer is also paying for the business: occupancy, staff, referral relationships and the home's inspection record. Getting both the real estate and the operating business valued gives you a realistic picture of what you are selling.

Value comes from things beyond the property: occupancy history, revenue and profitability, staff retention, the mix of Medicaid and private-pay residents, and the reputation you have built with families and referral sources. The license and contracts are not part of what transfers, since the buyer must obtain their own, so they are not something the buyer receives.

Not automatically, because they don't transfer. ECS and SBS contracts belong to the owner: a buyer must qualify for and hold its own fully executed contract, approved by DSHS program staff, before providing or being paid for those services. Revenue from them cannot be assumed to survive closing, so treat it as at risk in a sale. When selling, know which buyers can keep your contracts and market to them.

It estimates the business by income capitalization, plus the property if it is included. You enter the home's annual net income (after expenses, before the owner's salary), and can add gross revenue, licensed capacity, occupancy, years operating, payer mix, staffing, property value and DSHS license status. It uses Washington AFH market assumptions and is for planning only. It is not an appraisal or a broker opinion of value.

Partly. Without the P&L, the estimator can build gross revenue from market rates: pick the market (King, Snohomish or Pierce County areas), enter how many beds you expect at each care level, and it fills in revenue using per-resident private-pay ranges and the DSHS Medicaid rate for that county, from the schedule effective July 1, 2026. Count only beds with a Medicaid resident today; a Medicaid contract alone is not income. The value estimate itself still needs the home's annual net income.

Buyers price an operating home on its records: census, contracts, inspection history and the house itself. They will ask for your records whichever exit you choose, whether you sell everything together, sell the business and lease the house, or lease to another operator. Whichever way you go, you also give DSHS and every resident 60 days' written notice before the change of ownership.

Expect to be asked, and answer in writing. Limits on the type of residents the home can accept, or on who can provide care, must be posted in the home. DSHS tells buyers to ask the current owner about ongoing limits or exemptions and outstanding enforcement. The DSHS AFH Locator shows limits and enforcements issued in the previous three years, and the new owner must correct every deficiency that exists at the change of ownership.

Start with what a buyer's lender will underwrite: two years of tax returns and the resident roster with payer types. Careful buyers also ask for profit and loss statements and bank deposits, each Medicaid resident's current classification and last assessment date on a de-identified schedule matched to deposits, and the last three years of inspections, complaints and enforcement. State the price split between house and business in the listing.

Anything that won't survive the sale or hides a real cost. Unpaid owner hours: a buyer who won't work them pays someone who will, and a lender subtracts those wages. ECS and SBS income, since those contracts don't transfer. Meaningful Day, which has not been available since July 1, 2025. Annualized CBHS deposits, which overstate what a buyer can count on. And income that depends on one or two high-paying residents, which is fragile.

You collect rent instead of a lump sum, and the lease needs to allow adult family home use for the length of the buyer's plans. The buyer of the business still applies for its own license through a change of ownership, and you give DSHS and every resident 60 days' written notice first.

Yes. Another provider can lease the house and run a home there under its own license. Timing matters: DSHS confirmed that a home taken over through a change of ownership keeps the building rules it was first licensed under, while a home whose license lapsed must meet current rules, including 27-inch interior doors. Ask DSHS how your plan will be treated before you close your license.

Yes. Some owners hand over in stages: they reduce their own hours first, build a staff that can run the home without them, then sell. A home that runs without its owner is easier for a buyer and a lender to value. Another option is a resident manager running the home day to day, though you stay the licensee and responsible, and the manager must meet the same experience and training rules, including 1,000 hours of direct care.

It can be. A new owner of the business, including a new partner or an LLC you form, applies for its own license through a change of ownership, and you give DSHS and every resident 60 days' written notice first (WAC 388-76-10106). For a home licensed to an entity, the rule is specific: forming an LLC or corporation to take over the home, a merger, or a transfer of 50 percent or more of the entity's shares is a change of ownership; replacing the entity representative is not (WAC 388-76-10105).

Many retiring owners sell both together, because a buyer can step into an operating home with residents and staff rather than assembling those pieces separately. The license is the exception: it never transfers, so the buyer still needs a new license of their own. A single transaction is usually simpler. There are situations, like keeping the real estate as an investment while transferring just the operations, where separating them makes sense. It depends on your goals for retirement.

It depends on what changes hands. For a home licensed to an entity, a transfer of 50 percent or more of its shares counts as a change of ownership, which means a new license application, and the current owner gives DSHS and every resident 60 days' written notice first. Replacing the entity representative is not a change of ownership, but the new representative must meet every qualification an individual provider must meet.

The license belongs to the provider and does not pass to the family or the estate. DSHS handles each home case by case, depending on how well it planned ahead and how the business is set up. A resident who has to move gets 30 days' written notice, unless staying would endanger their health or safety. For a family selling, a home that stays licensed until a buyer takes over can be worth more than one that has closed.

Possibly, through a provisional license. When an emergency forces a change of ownership because the provider cannot continue, a person who qualifies to be a provider can apply for a provisional license that lets the home keep operating while the change of ownership goes through. Who can serve as provider, entity representative or resident manager is set out in WAC 388-76-10130. DSHS handles each case individually.

Yes. Every adult family home must keep a written succession plan: how the home will keep meeting the licensing rules and caring for residents if the provider, or an LLC's entity representative, can no longer do the job. DSHS can ask to see it at any time (WAC 388-76-10201). A plan that names who would step in, and how, is what the family and DSHS will work from, so it is worth writing carefully.

It generally helps. An AFH sale involves real estate valuation, business valuation, DSHS licensing logistics and resident-transition considerations at once. A broker without AFH experience may handle the real estate side competently but miss the licensing and operational pieces that decide whether the sale closes smoothly. The role includes coordinating the closing with the buyer's DSHS change of ownership, valuing both the real estate and the operating business, and preparing for buyer questions about specialty contracts, which do not transfer, and the home's DSHS record. See Find a Professional.