My grandparents a spacious condo in vail which they sold last year

Assuming the options are have, has, had, and live in, the correct answer is had.

Have and live in cannot be correct answers because they are written in the present form - this would mean that they still have/live in the condo, even though we know that is not true because they sold it. Also, has cannot be correct because my grandparents are plural - it would have to be have.

Therefore, the correct answer is had - it is in the past; they used to have it, but they don't anymore.