The aftermath of the coronavirus is still being seen on the real estate front. In the first eight months of 2023, almost 139,050 inherited homes have been registered. The INE has never recorded such a high number since 2007, when it began compiling statistics on transfers of property rights. A boom that refers to the increase in deaths caused by the pandemic.
Many of these homes will remain in the hands of one of the heirs, but what happens to the significant percentage that goes on the market for sale?
The sale of an inherited apartment is usually more complicated due to the psychological factors due to the death of a family member, the rush that is usually expected in this type of transaction and possible conflicts between the heirs. “The vast majority of homes from inheritances belong to several heirs and in some cases this entails an added difficulty in agreeing on the conditions of sale,” explains Abel Marín, partner and lawyer at Marín.
Reaching an agreement on the sale or its use is essential, but it is not always so simple. Where to start?
The ideal, says Mercedes Blanco, lawyer and member of the legal advisory committee of the Barcelona Association of Real Estate Agents, would be to start contemplating the final destination of the properties from the beginning of the inheritance process. "If the destination is the sale, because the owners have agreed to it, progress is made in parallel to the inheritance processing in the valuation and marketing of the property." This will save time in the process, so that when there is a buyer interested party will already have the inheritance registered and a mortgage can be formalized, if needed.
When the inheritance is processed, the heirs become owners of the home in the percentage that corresponds to each one, but the weight they have in the sales decisions is the same. “With a NO from one of them, the sale to a buyer can no longer be formalized. That is why consensus is very important and, if it is not possible, mediation by a lawyer,” explains Blanco.
In mediation, judicial means is the last option. Therefore, it is recommended that if there are several heirs involved, one of the owners acts as a spokesperson in decision-making. Blanco recommends that he be “a professional person, who seeks consensus and knows how to manage emotions, listening to the sensitivities of each and every one of the heirs.” Normally, the heirs will already know who the ideal person is, but Marín also recommends that it be the person who has shown the most interest in selling from the beginning, as this will probably facilitate the sales process.
Here, psychological factors are relevant and the spokesperson, as well as the rest of the owners, cannot ignore them. Normally there are many emotions attached to the property and the spokesperson must also be able to manage them, as there may be many memories attached. “Selling means letting go or accepting a loss that implies sadness. It is part of the mourning,” explains Blanco.
Once the destination of the property is clear and a secure communication channel has been opened, it is time to negotiate the price. How much will the home cost on the market? Logically, setting the value requires the consensus of all the heirs and is closely linked to the type of sale that wants to be carried out: do you want to move forward as quickly as possible? Are you looking to maximize profitability?
As with any property that comes on the market, the price of the home will essentially depend on the location, its age, the conditions it offers and the market value it may have at the time of inheritance. At the same time, the condition of the property is an increasingly present issue among buyers, comments Iñaki Unsain, Real Estate Personal Shopper and general director of ACV Gestión Inmobiliaria, because “if a property has not passed the Technical Building Inspection (ITE ) or is not well maintained, it will cost them in future spills.”
It is possible that the inherited home does not offer the best living conditions and you may consider embarking on renovations. Is it appropriate? The truth is that there is no certain answer and it will depend largely on the sales needs of the owners, as well as the condition of the home.
Renovation will always increase its price, but it is not always advisable. In the case of an inherited apartment, Marín advises against it unless the owner is an expert in renovation activity. "It may be that the investment is greater than the revaluation, that the works take time, that they are not executed well and that all of this causes conflicts between the heirs that break the consensus to sell."
Unsain believes that you do have to invest a small (sometimes not so small) amount in your home to leave it in perfect condition, “especially in those that are old, as is often the case in those that are put up for sale after having been inherited.” and that they were built many years ago.” The truth is that a home that has not had any renovations in the last fifty years can be very difficult to sell: the number of potential buyers is much smaller when looking at the condition of the home. “Renovating a home can increase its value by up to 20%.” If you cannot renovate all the rooms, you should at least focus on the essentials: kitchen, repainting the walls and improving lighting.
Buyers usually see a great opportunity in inherited homes because the owners are generally less demanding on the price: since something is received for free, they are more flexible. When a flat is owned by a single owner, any discount sought during negotiation goes directly to that person. On the other hand, “if the apartment is owned by several heirs, and you ask for a discount, it is divided among them: it is much easier to negotiate,” explains Unsain. Furthermore, in the case of inheritances, the apartment “has fallen from the sky”, it is a property that has not been bought or paid for, and, therefore, negotiating a discount is easier.
If you take the appropriate measures and work on open, sincere and effective communication, the sale of an inherited home stops seeming so complicated. It is a procedure that needs to be completed as soon as possible, but that does not have to lead to a bad sale. To save costs, but also for emotional health, it may be worthwhile to be advised by a professional who helps in matters related to inheritance and the sale of a home that houses a large number of memories.
