It does not count as "income", BUT the moment that money is deposited into the bank, it will automatically become part of their net worth. If plans are to sell the home, it would be best to handle this matter before making application for A&A. It may be advisable to speak with a financial advisor so that they can determine the best way to disperse the money from the sale. Any money that is retained in savings accounts, put into CD's, IRA's etc, will become part of their net worth.
Remember that there is no "look back" period for Aid & Attendance. Assets are counted from the date of application. The VA's income-based programs are intended to give beneficiaries a minimum level of financial security. They are not intended to protect substantial assets or build up the beneficiary's estate for the benefit of their heirs. The purpose of this program is to help those in financial need.