When you need to sell a property with multiple owners, you need to hire a licensed appraiser to assist you. This is also the case when someone wants to sell their ownership in the property. An appraiser offers many different benefits, in this type of situation.
Handling the sale of a property with multiple owners can become quite an ordeal. It can be a situation where every owner wants to be in control of the situation. If you’re just selling your ownership in the property, it’s a bit different.
Both of these scenarios require the right steps to be followed. Let’s look at both situations to better understand what you should do when selling this type of property in Mississauga, Milton, or anywhere else in the Greater Toronto Area.
Selling a Home with Multiple Property Owners
There are specific steps you want to follow when the property has multiple owners. This type of home sale comes with built-in problems, due to multiple owners being involved. It can be hard to keep everybody on the same page to agreed on a fair value.
In many cases, those that own the property are in different financial situations. Maybe one of the owners really needs to sell for financial gain, while another owner is doing quite well. These two owners might not be on the same page when it comes to the urgency to sell the property.
Some of the things you should do, when selling a property with multiple owners include:
- Hire a Licensed Appraiser – By hiring an appraiser, all owners will have a solid number to work with, when it comes to their own finances. A licensed appraiser will provide the value of the property before it’s listed.
- Follow Your Ownership Agreement – If you have an ownership agreement, make sure to follow it, especially if it outlines what to do to sell the property.
- Choose a Neutral Representative – Allowing one owner to choose the real estate agent they prefer may cause issues. Choosing someone neutral to all parties is usually a better option.
- Lay Out All the Costs with the Sale – It’s important to make sure all parties understand the costs of the sale and what they will need to pay. This can be one of the areas where sellers are not on the same page.
The reason for selling may also determine how you handle the sale. If you haven’t bought the property yet, it’s best to spell out how a sale will be handled, when that day comes. This can be done in an agreement between property owners before the purchase of a sale.
Each situation will be a bit different. A couple under family separation likely doesn’t have an agreement in place for the sale of the property. They probably never planned on getting divorced.
The same goes for multiple heirs of a property. However, if you invest in properties with multiple people, an agreement, upfront, can be very helpful.
When there isn’t an agreement in place, it’s best to come to an agreement before listing the property for sale. This agreement should spell out everything necessary to go through the entire sale, along with the financial responsibility of each owner.
Why Getting the Property Professionally Appraised is Important?
When selling with multiple owners, a professional appraisal can help keep everybody on the same page. Maybe the property has three owners. One might not really want to sell, while the other two do. This can cause a situation where each party is expecting a different sale price out of the property.
Even when it seems like all the owners are on the same page with the value of the property, an appraisal can take the guesswork out. You can avoid future conflicts on the value of the property by getting an appraisal done.
Just like with choosing a neutral real estate agent, a neutral licensed appraiser located in the Greater Toronto area should be chosen, too. While the appraised value might not match the list price or the sale price, perfectly, it gives all parties a solid number to work with.
Selling Your Ownership in a Property
A situation where one property owner wants to sell their ownership is a bit different. When going through this type of situation, you might need a neutral party to help mediate.
Maybe one owner wants to sell and the others don’t. One of the other owners might want to buy out the owner looking to sell, or it could be multiple owners buying someone out. Regardless of the situation, you want to get the property professionally appraised by a neutral party.
An appraisal helps to protect everybody involved. Maybe you have three owners and one wants to sell their ownership to another. This could make one owner the majority owner and the other owner that is left a minority owner. Before going through this process, make sure everybody understands what will happen and how it will impact their ownership in the property.
Choosing a licensed and professional real estate appraiser helps to ensure everything remains fair. They will provide an appraised value to base the buyout on, without one party getting some type of benefit.
Along with getting an appraisal, when it’s a buyout situation, make sure the owner getting bought out takes the right steps to remove their legal obligation to the property. This will help to protect everybody involved.
Avoid Going to Court, When Possible
You can certainly go to court, if necessary, but it should be avoided whenever possible. It’s best to avoid the legal costs and the time it will take to go to court.
If you are struggling to get all the owners of the property to come to an agreement, try mediation. Anytime you can come to an agreement without going to court, it will likely offer a better situation for everybody involved.
Going to court could lead to a partition action. This will divide the property equally between the owners, when possible. If it cannot be divided, a sale may be forced and the proceeds might be split.
Typically, going to court means nobody wins. You will end up spending time and money on the court proceedings. It’s far better to handle the sale of a property with multiple owners on your own. Going to court should always be a last resort.
Regardless of the situation, when multiple owners are involved in a buyout or sale of a property, make sure it’s handled properly. Get a professional real estate appraisal for your property to determine the value and come to an agreement, in writing, between all the owners.
