Selling an Inherited Home - by Heather Chilvers
One topic real estate professionals routinely have to discuss with sellers, is selling an inherited home when a parent or loved one passes away. It is a situation that is an overwhelming experience, one filled with emotions and many questions. Whilst talking about it is difficult, it is smart to be prepared. This includes having conversations as a family to determine what is best for all concerned. Heather Chilvers from Coldwell Banker Bermuda Realty looks further into this sometimes difficult situation.
After the Estate has been settled and the home received as an inheritance, deciding to sell, rent or keep the home is the first step which will help determine what to do next. For those who decide to sell the home, it is a good idea to work with a team of professionals including a lawyer and a real estate agent who can offer advice and guidance throughout the process. I am of the opinion that properties which are owned by more than two people usually lead to conflict between the owners. It’s hard to achieve unanimity as to what to do with the property visa vis repairs, occupation, rental income, etc. To be honest, less is best.
Although each situation is unique, the following tips will give you a place to start.
If you want to live in it - Property received as an inheritance should be appraised. If the beneficiaries agree, one RICS certified (Royal Institution of Chartered Surveyors) can be jointly instructed. The appraisal should indicate fair market value and is usually a gross figure. However, if the situation is contentious and the matter proceeds to court, the court will appoint a qualified appraiser for you. Should your sibling agree to be bought out, the value of the property is the market value as reported by the chosen appraiser at the date of valuation.
If you want to rent it out - Usually when an older person has inhabited a home, there can be a lot of work to do in order to get it up to a standard that is acceptable in today’s rental market. This will mean spending money, and sorting out and removing all the personal possessions therein. It will also mean that the costs of maintenance and repairs will be borne by all three of you, or come out of the rent. The cost of maintaining an older home particularly a large one can be enormous. Unless you are all three in agreement, this will almost certainly make for a rocky relationship with each other.
If you want to sell it - Assemble a strong team of professionals.Working with a real estate agent, and a lawyer can help make the process of selling an inherited home go more smoothly. They can give the guidance necessary to prepare the home for sale and get all of the affairs in order. A real estate professional can offer crucial, local market information that is especially helpful if any of the heirs do not live nearby. They can also help put all of the processes in order to ensure that selling the home is as easy on you and your family as possible.
Lorren Wilson Lawyer at Cox and Wilkinson advises: “If one of your siblings does not want to sell but the other(s) are adamant that they want a sale then you are at a cross road. The sibling that is adamant to sell can apply to the Courts via the Partitions Act and request that the Court order the property to be sold. These applications are usually successful, but in my view the least desirable or remunerative for family members, plus there are legal costs, which can mount up. If one sibling is determined to sell then the path of least resistance is to either agree to purchase your sibling’s share or list the property with a Realtor for sale.”
If you have decided to list the property for sale, do a walk through and get organized.Going from room to room and looking at everything from the condition of the floors to how fresh the paint looks can help determine what may need to be done to the home to help it sell more quickly. If the inherited home is older, an inspection is important before making any decisions as there may be certain systems that warrant renovations prior to sale. Equally important is to gather all of the necessary paperwork such as the deeds to the home as well as researching whether there are any mortgages on the inherited home that need to be paid. Even if the original mortgage was paid off, a reverse mortgage may have been negotiated to help cover expenses. Also look into local property taxes and/or any other liens against the property. When they were last paid is important.
A real estate agent can also provide counsel on an appropriate listing price to match current market value (like any market, the real estate market is subject to change). Overseas beneficiaries can find it difficult to select competent appraisers, inspectors and other professionals to assist in the home selling process, all of which a real estate professional can assist with.
Consider staging or other cosmetic improvements. Although not necessary in all markets or price ranges, staging can be the difference in getting a home sold in a price-competitive market. An inherited home may not be furnished in the style of other local homes on the market selling at a similar price. A real estate professional can help determine whether or not staging is a good fit for a specific situation. They may also suggest making aesthetic improvements to the home such as repainting rooms and/or landscaping the yard or other parts of the property and removing all personal items. Make sure the lawn and landscaping look good and that the exterior of the house is in good condition. If the house does not have curb appeal it can keep potential buyers from researching a home they may otherwise love. Perhaps most importantly, having an experienced real estate professional to answer questions quickly and accurately frees up time to devote to other activities and events.
Heather Chilvers is amongst Coldwell Banker Bermuda Realty’s Leading Sales Agents. She has been working in Real Estate for nearly 30 years. Follow ‘Ask Heather Chilvers Real Estate’ on Face Book, and ‘heatherrealtorbermuda’ on Instagram.
If you have a question for Heather, please contact her at firstname.lastname@example.org or 332 1793. All questions will be treated confidentially.