By: Emmanuel Ajayi

Tips to Sell Property Inherited with Family Members

Tags: Property Inherited with Family Members

Have you recently inherited a home from a loved one who passed away? It’s not unheard of for the surviving children to be gifted the family home once their parents have died. When you find yourself in this position, hopefully, you’ll already be prepared with some plans for this valuable asset.
If you and your siblings intend to sell the house, here are the steps to take.

Make sure everyone is in agreement

First and foremost, you need to discuss the options again with your family members. You want to be sure that no one has had a change of heart about disposing of the property. The death of a parent, even if it’s anticipated, is an adjustment and some offspring may have difficulty letting a family home go. This is the place of memories and the last connection with the older generation.
In addition, circumstances may have changed for some people. Maybe a brother or sister has lost their employment or is in the market to buy another dwelling. Moving into the parental property, even if it’s temporary, maybe a good decision for one of the inheritors. If there are no complicating factors such as these, ensure that everyone is on board with listing the house for sale.

Find a good realtor

Although one sibling may take the lead to locate a realtor, the choice must be something that all agree with. Look for an agent who has had sufficient experience with selling similar properties and has great client reviews. It’s a good move to pick a few high-performing realtors that family members can consider. This will help you find someone who is a good fit and whom everyone is comfortable with.
Once you come to an agreement, determine which of the offspring will take the lead to interact with the real estate agent. It takes a little work to keep everyone informed about what needs to be done to make the property presentable, potential plans for an open house, the marketing strategy, details of offers received, and the like.

Select a reputable real estate lawyer

A solid real estate lawyer is essential. Selling a property that you inherit when you and your siblings already own your primary residences means that you’ll have to pay the Canada Revenue Agency (CRA) capital gains tax. Chances are when your parents bought the house, they paid a lot less for it than what it’s worth in today’s market.
You can expect to pay taxes based on the amount that the home has appreciated in value. A lawyer who specializes in real estate transactions will have the knowledge to counsel you on this and other legal matters.  

Hire an accountant

Before you firm up the decision to sell the home, talk to a chartered professional accountant (CPA). Someone with this expertise can guide you through the tax implications of inheriting a property and this could influence the timing of when you put the house on the market. Also, your accountant can advise you on matters like your lifetime capital gains exemption.
Maybe real estate conditions are changing and you might anticipate selling the dwelling for a higher price if you wait a few months or more. It may be worth it to rent the home for a short while or to pay for the upkeep a little longer. Be aware that you and your siblings will take a tax hit of 50% of the profit when the property does sell.

Keep communications open

As you’ll understand, selling a property under these conditions can come with a lot of emotions. It’s important to keep the lines of communication open between family members. Real estate transactions can be complicated and when people are in the midst of grief, they can feel easily overwhelmed. Having a clear plan at the outset and the right professionals to assist you through the process will stand you in good stead.

In closing

If you find yourself in this position, it would be my absolute honour to assist you as your real estate agent